Traders Market Weekly: Big Tech Earnings and Global PMI

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    Monday – January 16

    All day – The U.S. stocks markets are closed for observance of the Martin Luther King holiday.


    Tuesday – January 17

    Earnings watch – Notable companies due to report include Goldman Sachs (GS), Morgan Stanley (MS), and United Airlines (UAL). Options trading implies a double-digit swing up or down for Silvergate Capital (SI) when it reports reports.

    All day – Roblox (RBLX) is due to report on monthly bookings. Shares of RBLX have moved an average of 5% over the last six metrics reports from the gaming platform company.
    All day – The IPO lockup periods expire for blocks of shares of WeTrade Group (WETG) and Cerberus Cyber Sentinel (CISO).
    All day – OPEC will publish its monthly oil market report.

    All day – The World Economic Forum in Davos, Switzerland will run all week. Chinese Vice Premier Liu He, U.S. Trade Representative Katherine Tai, BlackRock (BLK) CEO Larry Fink, Salesforce (CRM) Co-CEO Marc Benioff, and JPMorgan Chase (JPM) CEO Jamie Dimon are some off the notable people planning to attend. Last year, European bank stocks Deutsche Bank (DB), Banco Santander (SAN), ING Group (ING), Credit Suisse (CS), Barclays (BCS), UBS (UBS), and Lloyds Banking Group (LYG) all swung lower after a talk by European Central Bank President Christine Lagarde rattled investors.
    All day – The Washington State Supreme Court holds a hearing on the proposed $4B Albertsons (ACI) dividend.

    4:15 p.m. SRAX (SRAX) will hold a business update conference call. Shares have been moving higher in advance of the event.

    4:30 p.m. Monster Beverage (MNST) will host a virtual investor day meeting. The event has been circled by analysts as a potential share price catalyst for the beverage seller.

    4:30 p.m. PAVmed (PAVM) and Lucid Diagnostics Inc. (LUCD) will hold a joint conference call to provide a strategic business update.


    Wednesday – January 18

    Earnings watch – Notable companies due to report include Charles Schwab (SCHW), PNC Financial (PNC), Discover Financial (DFS), and Kinder Morgan (KMI). Options trading implies a 8% swing up or down when Alcoa (AA) reports.

    All day – The list of Federal Reserve speakers includes Bostic, Harker, and Logan. The central bank will also release its Beige Book report.

    All day – F5 (FFIV) will hold a Solution Day event in Berlin, Germany to show off its products.
    All day – Shareholders with Adara Acquisition Corp. (ADRA) will meet to vote on the SPAC deal to take Alliance Entertainment public. Alliance Entertainment is a distributor and wholesaler of what it says is the world’s largest in stock selection of music, movies, video games, electronics, arcades, and collectibles.
    All day – Newtek Business Services Corp. (NEWT) will hold an investor conference call to discuss the company’s NewtekOne rebranding strategy and the relaunch and redesign of its website.

    8:30 a.m. The producer price index for December will be released. The inflation measure is expected to show a 0.1% month-over-month drop with the year-over-year rate going to +6.8% from +7.3% in November. Core PPI (ex-food, energy, services) is forecast to rise 0.3%.

    8:30 a.m. The retail sales report for December will be released. The headline reading is forecast to be +0.1% month-over-month and core retail sales are expected to drop 0.2%.


    Thursday – January 19

    Earnings watch – Notable companies due to report include Fastenal (FAST), Procter & Gamble (PG),and Netflix (NFLX) . Options trading implies a double-digit swing up or down when Tal Education (TAL) reports. Shares of TAL gained 10% the last time the company reported earnings.

    All day – Compass Diversified Holdings (CODI) will host an Investor Day event in New York City.

    All day – The FDA action date arrives for Seagen’s (SGEN) Tukysa in combination with Trastuzumab for metastatic colorectal cancer. Merck (MRK) has rights to Tukysa outside of the U.S., Canada, and Europe. The FDA is also expected to act on BeiGene’s (BGNE) Brukinsa (zanubrutinib) for chronic and small lymphocytic leukemia. Shares of BGNE have been active after Brukinsa developments.

    All day – Procter & Gamble (PG) holds its earnings call. Household personal care stocks that have a 98% or higher trading correlation with P&G include Unilever (UL), Kimberly-Clark (KMB), and Colgate-Palmolive (CL). Retailer e.lf. Beauty (ELF) has a 94% trading correlation and Walmart (WMT) has a 78% trading correlation.

    All day – ARK Invest will hold its Q4 fund webinar. Cathie Wood has been a continual buyer of Coinbase Global (COIN) amid the sell-off.


    Friday – January 20

    Earnings watch – Notable companies due to report include Ally Financial (ALLY) and Regions Financial (RF).

    All day – The 2023 Montreal International Auto Show begins with most of the major brands expected to show off their 2023 models. Tesla (TSLA) will make a rare auto show appearance and Vietnamese electric vehicle startup Vinfast will also be featured.

    All day – Zymeworks (ZYME) is scheduled to present Phase 2 data at the ASCO Gastrointestinal Cancers Symposium.


    AMD, Nvidia among Wells Fargo’s top chip stocks for 2023

    Wells Fargo has selected Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) among its top chip stocks for 2023 amid pockets of optimism in certain areas of the sector.

    “We enter 2023 with an ongoing cautious view on the overall semiconductor cycle,” Wells Fargo analysts wrote in a note to clients, who added that expectations going forward haven’t been “adequately de-risked.”

    “That said, we do believe a down-cycle bottom can be established as we move through [the first-half of 2023],” Wells Fargo’s analysts wrote.

    The analysts see overly negative investor sentiment on AMD (AMD) as investors underestimate CPU market share gains in the server space, and AMD’s (AMD) 96-core Genoa EPYC product cycle ramps up and its 128-core Bergamo EPYC products come in the first half of this year.

    “We model AMD to gain [five percentage points] of incremental server CPU share through 2023” with more gains expected than declines, the analysts wrote of the firm’s top overall pick.

    They also noted that estimates for AMD (AMD), which generates a significant portion of its sales from the PC space, have been “adequately de-risked,” as investors expect its PC-related revenue to decline 43% year-over-year in the first-half of the year and 16% throughout 2023.

    Nvidia (NVDA) is also seen in a positive light, Wells Fargo said, largely due to its data center product cycle getting better this year and the overly negative investor sentiment surrounding the “strategic/platform importance” of its 144-core Arm-based Grace/Grace Hopper superchips launching in the first half of the year.

    The Wells Fargo team said that with Nvidia’s (NVDA) Lovelace GeForce RTX-4xxx series product cycle, “We think Nvidia can continue to provide investors with confidence of a bottoming gaming segment” and that potential for product channel restocking to kick in during the first half of this year.”

    They added that Nvidia’s (NVDA) ability to generate revenue from software is likely to be further on display this year, while the company’s automotive business could see an inflection point.

    The analysts also highlighted Micron Technology (NASDAQ:MU), but said it is more of a story for the second half of the year, given how weak the memory industry is currently.

    “We continue to see data center and automotive as key long-term secular growth drivers in memory,” Wells Fargo analysts wrote, adding that bit production cuts and the depletion of inventories “still have some way to go.”


    Other names that Wells Fargo viewed favorably were Marvell Technology (NASDAQ:MRVL), Cadence Design Systems (CDNS), Synopsys (SNPS), NXP Semiconductors (NXPI), Wolfspeed (WOLF), Ambarella (AMBA), Allegro MicroSystems (ALGM) and Rambus (RMBS).

    Semiconductor companies that are tied to the smartphone space will likely underperform in a “risk-on type market,” with the firm reiterating its underweight rating on Qualcomm (QCOM).


    First cannabis bill introduced in new Congress

    A group of GOP lawmakers in the U.S. House of Representatives has put forward the first marijuana bill for the newly formed 118th Congress, seeking to amend federal law related to firearm sales to medical cannabis users.

    The bill sponsored by Rep. Alex Mooney (R-WV) proposes reforms on the “sale, purchase, shipment, receipt, or possession of a firearm or ammunition by a user of medical marijuana, and for other purposes.”

    The proposed legislation introduced in the House on Friday is being cosponsored by Rep. Thomas Massie (R-KY) and Rep. Brian Mast (R-FL), who serves as a co-chair of the Congressional Cannabis Caucus.

    While further details of the measure are not yet available, cannabis publication Marijuana Moment said it appears to resemble a previous bill introduced in 2019, which did not clear the legislature.

    U.S. MSOs: MedMen Enterprises (OTCQB:MMNFF), Curaleaf Holdings (OTCPK:CURLF), Acreage Holdings (OTCQX:ACRHF), Cresco Labs (OTCQX:CRLBF), Green Thumb Industries (OTCQX:GTBIF), Trulieve Cannabis (OTCQX:TCNNF), Ayr Wellness (OTCQX:AYRWF), Columbia Care (OTCQX:CCHWF), TerrAscend (OTCQX:TRSSF), Clever Leaves Holdings (CLVR)

    Canadian Licensed Producers: Canopy Growth (NASDAQ:CGC), Tilray (NASDAQ:TLRY), Cronos (NASDAQ:CRON), Aurora Cannabis (NASDAQ:ACB), Sundial Growers (SNDL), OrganiGram Holdings (OGI), HEXO Corp (HEXO)

    Cannabis-focused ETFs: AdvisorShares Pure Cannabis ETF (YOLO), Global X Cannabis ETF (POTX), ETFMG Alternative Harvest ETF(MJ). Amplify Seymour Cannabis ETF (CNBS), AdvisorShares Pure US Cannabis ETF (MSOS)


    Barron’s mentions:

    Endava (DAVA) is singled out by the publication this week as an attractive stock. Despite corporate spending on software and tech decelerating due to recession concerns, Endava is said to be well positioned in 2023.

    The expectation for lower growth rates for Salesforce (CRM) and ServiceNow (NOW) has weighed on shares of London-based Endava (DAVA), with share down 39% over the last 52 weeks. However, Barron’s pointed out that companies are always looking to get more efficient by cutting costs and replacing old software with newer tech. In addition, Endava’s relatively small size is noted to allow it to work more closely with customers.

    Endava has seen revenue grow at a 29% annual clip over the past three years and is forecast to see sales compound annually at a 28% pace to $1.44B over the next two years. That means shares currently trade with an attractive PEG ratio of under 1X.


    I have a Dream…


    Nina Simone: Why (The King Of Love Is Dead) (1968)

    “We want to do a tune written for today, for this hour, for Dr. Martin Luther King. This tune is written about him and for him,” said Nina Simone as she introduced one of the best Martin Luther King songs in history, “Why (The King Of Love Is Dead),” to the audience at The Westbury Music Fair in Long Island, New York, just three days after King was murdered.

    The song, honoring the courage and compassion of “this great man,” was written by Simone’s bassist Gene Taylor.

    Even quicker to emerge was the tribute from Otis Spann. On the day after King’s assassination, the blues pianist, a member of Muddy Waters’ band, performed two newly composed blues for the fallen civil-rights leader: “Blues For Martin Luther King” and “Hotel Lorraine.”


    Neil Diamond: Dry Your Eyes (1976)

    Neil Diamond and Robbie Robertson of The Band wrote “Dry Your Eyes” for the album Beautiful Noise. Robertson said the song was inspired by “how many people felt after the assassination of Martin Luther King Jr.”


    U2: Pride (In The Name Of Love) (1984)

    Bono was inspired to write “Pride (In The Name of Love)” after reading Stephen B Oates’ biography of King, Let The Trumpet Sound. Chrissie Hynde of Pretenders sings backing vocals.

    The lyrics contain one factual error. Bono wrote, “Early morning, April four/Shot rings out in the Memphis sky,” though the assassination actually took place at 6.01pm.


    Patty Griffin: Up To The Mountain (MLK Song) (2007)

    Patty Griffin’s “Up To The Mountain,” from the album Children Running Through. Griffin takes the title from King’s 1968 “I’ve been to the mountaintop” speech, delivered the day before he was killed. It is a moving and soulful 21st-century tribute from the singer-songwriter, who was only four when King was assassinated.


    Paul Simon: So Beautiful Or So What (2011)

    Paul Simon in “So Beautiful Or So What” tackles the subject of despair and the “sirens’ long melody” after the killing of King.

    The song was hailed as one of the best Martin Luther King songs by Elvis Costello, who said that Simon’s song “rejects the allure of fashionable darkness” and instead “celebrates the endurance of the spirit and the persistence of love.”

    • This reply was modified 1 year, 4 months ago by ClemSnide.
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