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The core PCE price index for April arrives on Friday. (0:14) Salesforce, Best Buy, and Chewy highlight earnings. (0:55) GameStop is benefiting from the resurgence of memes. (3:02)
The short holiday week will have a familiar theme: inflation. The fixed vs. non-fixed (or is it smooth) camps will have their eyes on the Fed’s preferred measure of inflation.
The April PCE deflator excluding food and energy – or the core PCE index – will be released on Friday, along with consumption and income figures. Economists expect the index to rise by 0.2% last month.
Economists at Citi say their team “looks for consumption to continue to slow, with PCE growth remaining below the pre-Covid 2.5 trend due to rising interest rates, tight lending standards, and a cold labor market.”
Along with income and spending, a second measure of first-quarter GDP will be released on Thursday, with the Fed’s Beige Book due Wednesday.
Among the notable gains this week
On Tuesday, BOX, CAVA and Bank of Nova Scotia (BNS) reported.
Salesforce (CRM), DICK’S Sporting Goods (DKS), Agilent (A), Chewy (CHWY), HP (HPQ), Pure Storage (PSTG), Capri Holdings (CPRI), Okta (OKTA), C3.ai (AI) And the findings of the Abercrombie & Fitch (ANF) report.
Thursday features Best Buy (BBY), Birkenstock (BIRK), Royal Bank of Canada (RY), Dollar General (DG), Foot Locker (FL), Costco (COST), Gap (GPS), Marvell (MRVL), Dell ( DELL ), NetApp ( NTAP ) and Nordstrom ( JWN ) are on the calendar.
Genesco (GCO) and Frontline (FRO) wrap things up on Friday.
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In the news this weekend
Influential dealer advisory firm Glass Lewis has urged Tesla (TSLA) shareholders to reject a proposed $56 billion compensation package for Chairman Elon Musk that was invalidated by a US court earlier this year.
The electric car giant is scheduled to hold its annual shareholder meeting on June 13, where participants will get a chance to vote on a compensation package that includes stock option awards.
Glass Lewis made its recommendation in a report published on Saturday and seen by Seeking Alpha. The consulting firm cited the “excessive” dilutive effect of the package.
Musk’s pay package was invalidated by Delaware Judge Kathleen McCormick in late January after a shareholder lawsuit claimed the package was unjustifiably approved.
GameStop (GME) said it raised $933.4 million through a stock offering, capitalizing on last week’s epic short squeeze.
The video game retailer said it sold 45 million shares of its common stock through a go-to-market program, and sold the maximum number of registered shares under an ATM program.
Last week, the company revealed that it had concluded an open market sales agreement with Jefferies to offer and sell up to 45 million shares.
GameStop expects first-quarter net sales to range from $872 million to $892 million, compared to the consensus forecast of $1.05 billion (and that’s based on just three estimates). That would be less than $1.237 billion a year ago.
The surge in GameStop (GME) shares early last week brought memories of 2021 back into the spotlight. The action was sparked by none other than retail investor Keith Gill, known online as Roaring Kitty, who was one of the key players in the saga three years ago.
And in the Wall Street research corner,
Cathie Wood, the fund’s activist manager, says the overweight stock market has prompted investors to seek safety similar to what happened during the worst of the US economic crisis.
“In our view, the search for cash and safety in stock markets today is as intense as it was during the Great Depression of the early 1930s,” Wood said. “When the fear dissipated, the market expanded and risk was rewarded again.”
Her comment appeared above a video in which she discusses Goldman Sachs’ “astonishing” chart of periods over the past century when the stock market was driven by a small number of stocks. Market capitalization concentration in the largest US stocks is currently the highest in decades, at 33%.
“In 1932, the peak, there was already tremendous fear and crowding into the same stocks just because they looked so safe.” From 1939 to 1946, stocks with the largest market caps underperformed compared to gains in the broader market, she said.
