COUR - Stocks To Watch: Jobs Report Drama Could Flip The Script For Investors

2023-03-04 10:00:00 ET

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The jobs report could be the biggest talking point of next week after Federal Reserve governor Christopher Waller warned interest rates may have to be raised more than expected if economic data comes in hot. Investors will also be paying close attention to Treasury yields, especially the 10-year Treasury note after its flirtation with the 4% level. On the political front, the White House is expected to release a proposed budget on March 9. The proposal could have implications for some defense stocks depending on the funding levels that are eventually worked out with Congress. Meanwhile, earnings reports slow down quite a bit in the week ahead, although updates from DICK'S Sporting Goods (DKS) and Oracle (ORCL) could rattle their respective sectors. Seeking Alpha contributor Geoffrey Seiler has his eyes on the earnings reports, including Allbirds (BIRD), and in his view the retailer needs a change in management. Meanwhile, Mike Zaccardi thinks Buckle (BKE) is undervalued even if the upcoming earnings report shows some weakness. The calendar next week also includes a large number of corporate events with the potential to move share prices. Apple's (AAPL) annual meeting, a General Electric (GE) event, and Mattel's (MAT) Investor Day are some of the headliners.

Earnings spotlight: Monday, March 6 - Trip.com (TCOM), Guidewire Software (GWRE), and Lordstown Motors (RIDE).

Earnings spotlight: Tuesday, March 7 - DICK'S Sporting Goods (DKS), CrowdStrike (CRWD), Sea Limited (SE).

Earnings spotlight: Wednesday, March 8 -United Natural Foods (UNFI), Campbell Soup (CPB), and MongoDB (MDB).

Earnings spotlight: Thursday, March 9 - JD.com (JD), Gap (GPS), Ulta Beauty (ULTA), DocuSign (DOCU), and Oracle (ORCL).

Earnings spotlight: Friday, March 10 - Buckle (BKE).

Volatility watch: Silvergate Capital (SI) and Bed Bath & Beyond (BBBY) are once again at the top of the list of stocks with the highest percentage of short interest outstanding. Options trading has spiked over the last week on Genius Group Limited (GNS). In the cryptocurrency market, Ethereum (ETH-USD) could see some swings as tests are run ahead of the Shanghai hard fork. Following the major network upgrade, 16M staked ether will become withdrawable by validators that help operate and secure the network.

IPO watch: Health and wellness provider Nava Health (NAVA) and fracking material provider Atlas Energy Solutions (AESI) are expected to start trading next week. The quiet periods expire on Nextracker (NXT), Hesai Group (HSAI), Enlight Renewable Energy (ENLT), and Mineralys Therapeutics (MLYS) to open up analysts to post ratings. Of the group, Nextracker has seen the biggest post-IPO rally. Another major private company appears to be pushing off an IPO, with Impossible Foods (IMPF) saying a 2024 public launch is more likely than a trading debut this year.

Dividend watch: Companies forecast to boost their quarterly dividend payouts include Oracle (ORCL) to $0.38 from $0.32, DICK'S Sporting Goods (DKS) to $0.5375 from $0.4875, Qualcomm (QCOM) to $0.81 from $0.75, General Dynamics (GD) to $1.36 from $1.26, and American Tower (AMT) to $1.58 from $1.56.

Jobs report preview: The February jobs report could have huge significance following the January blowout number of 517K job additions. The consensus estimate is for 215K new jobs to have been added to the economy, but a lower number could shift the narrative on if the January print was a one-off. The unemployment rate is expected to hold steady at 3.4% and a 0.3% month-to-month bump in average hourly earnings is anticipated. Average weekly hours are expected to dip to 34.6 from 34.7. Bank of America thinks a deceleration from January will be tied largely to weather shifts and a general mean-reverting nature of NFP prints. "Typically, when payroll growth records a sizable increase or decrease, we see a reversal in the following month" noted the firm.

Corporate events: Oatly (OTLY) will hold an extraordinary general meeting on March 7 to vote on a proposal to increase the limits in the number of shares to increase the room for issuance of additional shares without the need for further shareholder approval. Shares of Oatly fell sharply when the capital raise plan was first announced. Dover (DOV), Mattel (MAT), and Coherent (COHR) all have investor events scheduled for March 8 with the potential to jolt shares. In the tech sector, Apple (AAPL) will hold its annual meeting on March 9. Proxy advisory firm Institutional Shareholder Services has urged AAPL investors to vote for the company's director nominees and the pay packages for top executives, including Chief Executive Tim Cook. The proxy advisory firm also recommended investors vote for proposals including a resolution demanding a report on median gender and racial pay gaps, and an amendment of proxy access right, both of which were opposed by AAPL management. BJ's Wholesale Club Holdings (BJ), General Electric (GE), and Coursera (COUR) will also hold investor events on March 9. Check out Seeking Alpha's Catalyst Watch for more events scheduled for next week.

Eyes on energy: One of the biggest energy conferences of the year takes place next week with CERAWeek running from March 6-10 in Houston, Texas. Notable speakers include Occidental Petroleum (OXY) CEO Vicki Hollub, Shell (SHEL) CEO Wael Sawan, TotalEnergies (TTE) CEO Patrick Pouyanne, BP (BP) CEO Bernard Looney, Exxon Mobil (XOM) CEO Darren Woods, ConocoPhillips (COP) CEO Ryan Lance, Enbridge (ENB) CEO Greg Ebel, and Plug Power (PLUG) CEO Andy Marsh. There will also be 225 start-ups on the scene at CERAWeek, with representation across digitalization, AI, cybersecurity, analytics and connectivity, robotics, blockchain, additive manufacturing, mobility and decarbonization technologies.

Quant ratings: Stocks with recent quant rating upgrades include Transocean (RIG) and MasterCraft Boat (MCFT) to Strong Buy from Hold, Vroom (VRM) to Hold from Sell, and Ocugen (OCGN) to Strong Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.

Notable conferences: The Morgan Stanley Technology, Media & Telecom Conference is likely to turn the most heads next week. Companies participating include Peloton Interactive (PTON), Etsy (ETSY), Dell Technologies (DELL), Fortinet (FTNT), Airbnb (ABNB) and IBM (IBM). Other notable conferences running during the week the Loop Capital Investor Conference, Oppenheimer 33rd Annual Healthcare Conference, BofA 2023 Asia Pacific Telecom, Media and Technology Conference, Bank of America Consumer & Retail Conference, Barclays Global Healthcare Conference, J.P. Morgan’s Industrials Conference, William Blair 7th Annual Tech Innovators Conference, Citi Global Consumer Conference, and UBS Global Consumer and Retail Conference.

Barron's mentions: The cover story this week breaks down how a major tech upgrade in the agriculture sector could lead to a breakout for farming stocks. Powerful new software is helping hold down pesticide, fertilizer, and seed costs, while raising crop output. In the future, artificial intelligence and software could help planters, sprayers, and combine harvesters run themselves more efficiently. The Department of Agriculture forecasts net cash farm income will be $150.6B last year, which adjusted for inflation is well above the 20-year average of $130.5B. The publication thinks the recent trends do not signal a peak of a cycle, but are indicative of the most rapid change in food production since the rise of mechanized farming. Deere (DE), AGCO (AGCO ), Titan Machinery (TITN), Corteva (CTVA), Farmland Partners (FPI), and CNH Industrial (CNH) are some of the stocks seen reaping benefits if there is a long-lasting farming boom.

Sources: EDGAR, Bloomberg, CNBC, Reuters

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