FTNT - Stocks To Watch: Eyes On CPI New iPhones And Google Vs. U.S. Trial

2023-09-09 10:30:00 ET

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The August Consumer Price Index report could put some meat back on the bones for inflation hawks looking for a vigilant Federal Reserve. While the Fed is largely considered to be nearing the end of its hiking cycle, the terminal rate is still up for debate. The economic calendar next week will also feature updates on retail sales, producer prices, and jobless claims. Federal Reserve speakers are in a blackout period ahead of the FOMC meeting scheduled for September 19-20, which could give the economic reports extra weight. On Seeking Alpha, analyst Victor Dergunov thinks the Fed should support markets and may move to an easier monetary stance as the calendar moves into the new year. However, he noted that the economic image may need to worsen before the Federal Reserve shows more apparent signs that the pivot is near.

Oracle (ORCL) and Adobe (ADBE) are the most notable earnings reports next week. Key events include Apple's (AAPL) Wonderlust iPhone reveal, the Salesforce (CRM) Dreamforce Conference, and the Senate's first AI Insight Forum. The start of the Google (GOOG) monopoly trial will also capture plenty of headlines. The trial marks the first major tech antimonopoly case in the U.S. in several decades.

Earnings spotlight: Monday, September 11 - Oracle (ORCL), Casey's General Stores (CASY), and Bowlero (BOWL).

Earnings spotlight: Tuesday, September 12 - Cognyte Software (CGNT) and InnovAge Holding (INNV).

Earnings spotlight: Wednesday, September 13 - Cracker Barrel Old Country Store (CBRL) and REV Group (REVG).

Earnings spotlight: Thursday, September 14 - Adobe (ADBE) and Lennar (LEN).

IPO and spinoff watch: Chip designer Arm (ARM) is expected to price its IPO and start trading next week. The IPO could be the largest since Rivian Automotive's (RIVN) $13.7B offering in November. Stem cell upstart Vitro Biopharma (VTRO) is also scheduled to start trading.

Apple watching: Apple (AAPL) will hold a product event on September 12 at its headquarters in Cupertino, California. The tech giant is expected to showcase new iPhone 15 models at the Wonderlust event, including 6.1-inch versions of the iPhone 15 and iPhone Pro, as well as 6.7-inch versions of the iPhone 15 Plus, and iPhone 15 Pro Max. The new phone models are expected to feature the Dynamic Island 5G chip from Qualcomm (QCOM) and have a USB-C port instead of a Lightning port. Some reports suggest that Apple is changing the material of the iPhone's chassis to brushed titanium from shiny stainless steel. Pricing on the iPhone 15 Pro is expected to come in at $1,099 and the iPhone Pro Max is being listed at $1,199. Both those models will likely include Apple's (AAPL) first 3-nanometer chip, the A17, which could improve battery performance dramatically. Outside of new iPhones, Apple (AAPL) is also expected to unveil the Apple Watch Series 9 and a new version of the Apple Watch Ultra. The company could also unveil new AirPods. While the Apple Vision Pro isn't expected to debut until next year, Apple could provide some new details about the computing headset or run a demo. Ahead of the Apple event, Wedbush Securities noted that the new iPhone will arrive with an estimated ~25% of its 1.2 billion installed base having not upgraded their iPhone in the last four years. Analyst Dan Ives also believes that average iPhone selling prices are bumping up towards a roughly $900 to $925 range, setting up for a new "mini super cycle" despite the choppy macro. As for the stock price reaction, Apple has outperformed the tech sector in the three trading days ahead of a product event over the last five years and then underperformed in the three days following. Stocks of interest around the Apple product event include Skyworks Solutions (SWKS), Qorvo (QRVO), QUALCOMM (QCOM), Cirrus Logic (CRUS), Micron (MU), and Lumentum Holdings (LITE).

CPI preview: The August inflation report is anticipated to be closely watched by traders. Headline CPI is forecast to rise 0.5% month-over-month, and the 12-month headline CPI rate is seen jumping to a +3.7% pace from +3.2% in July. The projected 62-basis point seasonally-adjusted headline CPI increase in August would be the largest increase in more than a year. The acceleration in inflation is due largely to an 11% increase in prices for gasoline and other energy goods. Meanwhile, core CPI is expected to show a more moderate acceleration, moving up 0.2% month-over-month. Airfares are expected to show a reversal from the drops seen in June and July. Used vehicle prices, household furnishing prices, and education costs are seen moving lower again. Medical care service prices are also projected to fall for the 10th time in the 11 months since CPI medical insurance prices started what should be a 12-month tumble in October. Looking ahead, UBS said the recent surge in crude oil prices is an upside risk to the headline CPI rate for September, although other factors could offset. "Nonetheless, the general path is toward easing inflation as the downtrend in rents, falling used vehicle prices, easing supply conditions, and slower wage growth put downward pressure on price increases," previewed the firm.

Online sports betting: The opening weekend of the NFL season will bring sports betting spots back into the focus of investors. Ahead of the launch of the new NFL season, an annual survey released by the American Gaming Association forecasted a notable increase in the number of adults who will place bets during the 2023 NFL season. The AGA survey indicated that 73.5M adults in the United States will place wagers this fall and winter on the NFL vs. 27M adults from 2022. The new season begins with FanDuel (DUEL) and DraftKings (DKNG) holding the top spots for sports betting market share. BetMGM (GMVHF) (MGM), Caesars Entertainment (CZR), and Bet365 are still scrapping to nab market share, but some operators such as fuboTV (FUBO), MaximBet, and the online sports betting arm of Churchill Downs (CHDN) have ceased operations or cut down dramatically on their reach. Meanwhile, PointsBet (PBTHF) agreed to sell its U.S. business to Fanatics (FANA). This year's NFL season arrives with sports betting operators focused on profitability ahead of market share at all costs. Crucially, Needham tipped that promotional activity in the sector is relatively benign at the moment. The biggest wildcard to watch this NFL season could be Disney's (DIS) ESPN Bet entering the sports betting scene through a deal with PENN Entertainment (PENN). The Roundhill Sports Betting & iGaming ETF (BETZ) is up 19% on a year-to-date basis. DraftKings (DKNG) and PENN Entertainment (PENN) are the two top holdings in the ETF.

Key events: Fortinet (FTNT) will hold its third annual Security Summit in Napa, California. The tech event has been cited in the past by analysts when they boosted their outlook for Fortinet. The three-day Salesforce (CRM) Dreamforce Conference will begin. Notable speakers include Salesforce (CRM) CEO Marc Benioff, OpenAI CEO Sam Altman, and Salesforce AI CEO Clara Shih. Nike (NKE) will hold its annual meeting. Proxy firm ISS has recommended that Nike investors vote for the resolution calling on the company to disclose more data on pay equity for female and minority employees. A similar resolution was voted down in 2021. A separate resolution calls on Nike to offer more transparency on supply chain working conditions. The U.S. Senate will hold its first AI Insight Forum. The list of participants who will discuss AI topics include OpenAI CEO Sam Altman, Nvidia (NVDA) CEO Jensen Huang, IBM (IBM) CEO Arvind Krishna, Microsoft (MSFT) CEO Satya Nadella, Microsoft co-founder Bill Gates, Meta Platforms (META) CEO Mark Zuckerberg, and Tesla (TSLA) CEO Elon Musk. Other events of interest include Yum China's (YUMC) Investor Day, Moderna's (MRNA) R&D Day, Bristol Myers Squibb's (BMY) R&D Day 2023, Labcorp's (LH) Investor Day, Bitfarms' (BITF) Analyst & Investor Day, and Bullfrog AI Holdings' (BFRG) Webinar. Check out Seeking Alpha's Catalyst Watch for a full preview of the key events.

Conference schedule: The week ahead is also one of the busiest of the year for conferences. The marquee gathering could be the Morgan Stanley Global Healthcare Conference, which will feature participation by Merck (MRK), Biogen (BIIB), Roche Holding AG (RHHBY), and Gilead Sciences (GILD) to name just a few. Other notable conferences that could lead to share price jolts include the Morgan Stanley Laguna Conference, the Barclays Global Financial Services Conference, the Piper Sandler Growth Frontiers Conference, the Barclays Global Financial Services Conference, the Goldman Sachs Global Retailing Conference, the Baird Global Healthcare Conference, the UBS Global Energy Transition Conference, and the BofA Securities Media, Communications and Entertainment Conference.

Quant ratings: Stocks with recent quant rating changes include Jabil (JBL) to Strong Buy from Hold, Humana (HUM) to Buy from Hold, and Trinity Biotech (TRIB) to Strong Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.

Stock splits: The Ampio Pharmaceuticals (AMPE) 20-to-1 reverse stock split of the company's common stock will become effective on September 11. The Altisource Asset Management Corporation (AAMC) two-for-one split will become effective when trading begins on September 14.

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