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Investors are not likely to get a break from the recent market volatility, with action next week set to be dictated by the Fed's battle to combat inflation and supply chain issues still being seen in nearly every sector. Headlining the action, economic reports on producer prices, retail sales, and manufacturing all drop on the lap of investors ahead of the FOMC rate announcement on June 15 and subsequent press conference with Fed Chairman Jerome Powell. Following a hot CPI report, the odds for a 75-point rate hike jumped to 20% from 5% to add some intrigue to the meeting. Cisco (NASDAQ:CSCO), New York Times (NYSE:NYT), and Splunk (SPLK) hold big investor events next week, while the Kroger (NYSE:KR) earnings report has the potential to either rattle or soothe the jittery retail sector. In the crypto world, Ethereum (ETH-USD) could make some news as it continues to work to shift from the energy-intensive proof-of-work method for securing the network to a proof-of-stake model with lower transactions costs. If cryptocurrencies are lined up to make a comeback, the ETH shift could be the catalyst.
Earnings spotlight: Monday, June 13 - Oracle (NYSE:ORCL).
Earnings spotlight: Wednesday, June 15 - John Wiley & Sons (WLY).
IPO watch: Connexa Sports Technologies is expected to start trading on June 14. The connected sports company aims to build a direct connection to consumers with products and technologies, while also building out the infrastructure to enhance automated production live-streaming, fan engagement and monetization opportunities. Also, next week, watch for the quiet period expirations for Visionary Education Technology Holdings Group (VEDU) and Okyo Pharma (OKYO) on June 13 to free up analysts to post ratings. There are also IPO lockup periods expirations for blocks of shares of Samsara (NYSE:IOT), Arena Group (AREN), Genenta Science S.P.A (GNTA), and Fresh Vine Wine (VINE). Of the group, only AREN trades above its IPO pricing level.
Dividend watch: There are no notable dividend increases forecast for next week.
FOMC preview: The Federal Reserve is expected to raise interest rates by 50 points as it continues to try to stem rising inflation, although the odds for a 75-point rate hike jumped to 20% following the blistering CPI report. Traders also boosted the odds for a 125-point increase over the June and July FOMC meetings to over 50%. Beyond looking at the two summer meeting of the Fed's policymaking committee, the update Summary of Economic Projections and dot plot will be looked at closely to see how the Fed views the inflation battle progressing into 2023. Notably, the meeting will mark the first for newly confirmed Fed Governors Cook and Jefferson, who Bank of America expects to lean dovish and potentially tilt the hawk-dove spectrum. Fed Chairman Jerome Powell's press conference will also be a major highlight for any indications that the inflation battle may be ramped up more than anticipated.
Kroger earnings preview: Kroger (KR) is due to report earnings on June 16. While the string of recent guidance lowerings in the retail sector has investors edgy, Oppenheimer thinks Kroger (KR) management still has the ability to re-affirm full year guidance. The firm thinks inflation benefits net of volume losses could more than offset higher LIFO charges and supply chain expenses. Kroger's domestic positioning, strong cash generation, and limited discretionary exposure are also called positives in the current backdrop.
Corporate events: Cisco (CSCO) holds its Cisco Live IT event all week, and Splunk (SPLK) execs will be making appearances at the company's '.conf22' event. Other key investor events to watch will be the New York Times Company (NYT) Investor Day on June 13 and BRP Inc. (NASDAQ:DOOO) Investor Day on June 15. On the SPAC calendar, shareholders with Virgin Group Acquisition Corp. II (VGII) will meet to vote on approve the business combination with Grove Collaborative. Meanwhile, shareholders with Corner Growth Acquisition Corp. 2 (TRON), Dune Acquisition Corporation (DUNE), Americas Technology Acquisition Corp. (ATA), and PMV Consumer Acquisition Corp. (OTCPK:PMVC) all meet to vote on extending their deadlines for a business combination. Read more about the events next week that could impact shares prices in Seeking Alpha's Catalyst Watch.
Conference spotlight: The Oppenheimer Consumer Conference may be the most intriguing item on the conference schedule next week. Companies due to present include Albertsons Companies (ACI), BJ's Wholesale (BJ), Dollar General (DG), Ulta Beauty (ULTA), and Walmart (WMT). Analysts will be looking to see if recent data points suggesting some weakness at the lower end of the consumer spending matrix are being seen widely. There will also be a sharp focus on if inflation costs are being passed on to consumers, as well as the updates on the promotional backdrop, supply chain issues, and inventory management. The consumer packaged goods sector will also be represented at the conference with execs from Cal-Maine Foods (CALM), J&J Snack Foods Corp. (JJSF), SunOpta (STKL), Hostesss Brands (TWNK), and Utz Brands (UTZ). As part of its conference preview, Oppenheimer said the updates from leading retailers such as Ulta Beauty (ULTA) and Dollar General (DG) on efforts to drive alternative revenue streams will be watched closely.
Annual meetings: Notable annual meetings next week include Blue Apron (NYSE:APRN) and SeaWorld Entertainment (SEAS) on June 13, Caesars Entertainment (CZR) on June 14, Dick's Sporting Goods (DKS), Fastly (FSLY), Shake Shack (SHAK), and Etsy (ETSY) on June 15, AMC Entertainment (AMC) and Norwegian Cruise Line Holdings (NCLH) on June 16, as well as Marriott International (MAR) on June 17.
Box office preview: Universal (CMCSA) jumps to the forefront of the summer box office battle with Jurassic World Dominion opening in more than 4,600 theaters across North America. The summer tent pole is expected to easily knock off Top Gun: Maverick from the box office leader position in the U.S. and could top $125M for the opening weekend. The film has already churned up more than $55M internationally across 15 markets after strong openings in South Korea and part of Latin America,
Barron's mentions: The publication makes the case that energy stocks have more room to rise, especially for investors willing to mix it up with renewables-focused companies. Energy is noted to still be the cheapest sector in the S&P 500, trading at 9.8X expected earnings over the next year. Another positive identified is that balance sheets in the sector are healthier than they’ve been in years. Politics are also working in favor of energy stocks, with the reality of soaring gasoline prices increasing tolerance for traditional energy sources. Energy is also seen as due for a major investment cycle. Goldman Sachs noted that capital expenditure in oil and gas production has fallen 61% since peaking in 2014, and overall primary energy investment has dropped 35%. That means the three years could see a major rebound as producers ramp up supply to meet demand, and companies in sectors facing severe capacity constraints could see a boost. The six energy stocks that made the cut were EOG Resource (EOG), Enel (OTCPK:ENLAY), Phillips 66 (PSX), Sunrun (RUN), Shell plc (SHEL), Liberty Energy (LBRT).
Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital
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