Investors head into next week positioned as if the U.S. debt ceiling crisis will be resolved one way or another. If that is the case, the tech sector could be a major focus after Nvidia (NVDA) recorded the single biggest one-day market cap rise in the history of the market with its post-earnings surge in share price of more than 25%. It is likely the debate on Nvidia to ratchet up following the AI-inspired rally. Seeking Alpha analyst Dominic Rinaldi thinks the bull investment thesis on Nvidia is based on the view that we are at the beginning stages of what could be considered the fourth industrial revolution, while The Asian Investor warned investors may want to consider selling shares due to the expensive price-to-sales ratio now in play.
The major economic release of the week will be the May jobs report on June 2. A drop in monthly payroll additions to 180K from 253K in April is anticipated and the unemployment rate is seen inching up to 3.5% from 3.4%. Average hourly earnings are forecast to decline to a +0.3% pace from +0.5% in April. The jobs report will arrive less than weeks before the next FOMC meeting and is likely to kick off more debate on if the Fed will raise rates again. Seeking Alpha Investing Group Leader Lawrence Fuller thinks the central bank is likely to stand pat with rates based on the incoming economic data over the next two weeks. “Labor market strength is not disrupting the disinflationary trend or the gradual decline in wage growth. It is the best of both worlds, which is how we arrive at a soft landing,” predicted Fuller.
Earnings spotlight: Tuesday, May 30 – HP (HPQ), Hewlett Packard Enterprise (HPE), Ambarella (AMBA), and Box (BOX).
Earnings spotlight: Wednesday, May 31 – Salesforce (CRM), CrowdStrike (CRWD), Chewy (CHWY), and NetApp (NTAP). Seeking Alpha analyst Vlad Deshkovich stated: “Estimates for Salesforce earnings have been revised upwards significantly (22.9%) in response to its most recent quarter but are still not too aggressive in terms of their assumptions.”
Earnings spotlight: Thursday, June 1 – Broadcom (AVGO), Dollar General (DG), Lululemon Athletica (LULU), Dell Technologies (DELL), Macy’s (M), and Zscaler (ZS). Seeking Alpha analyst Albert Anthony noted: “Today I am giving this stock a buy rating due to it being a leading brand in its sector, its stable and growing dividends, its success as a provider of infrastructure solutions for enterprises even as sale of consumer products experience headwinds.”
IPO and spinoff watch: The quiet periods expire on Kenvue (NYSE:KVUE) and Acelyrin (SLRN) will end to open analysts up to post ratings on the stocks. On the spinoff front, Knife River Corporation (KNF) will start trading after being spun off from MDU Resources (NYSE:MDU). The spinoff of the construction materials and contracting business will occur by means of a pro rata distribution of approximately 90% of the outstanding shares of Knife River common stock to MDU Resources stockholders of record as of the close of business on May 22. Knife River will be added to the S&P MidCap 400 prior to the open of trading on June 1. MDU Resources Group will remain in the S&P MidCap 400 as well.
Dividend watch: Companies forecast to boost their quarterly payouts include NetApp (NTAP) to $0.52 from $0.50, Ralph Lauren (RL) to $0.775 from $0.75, and Alexandria Real Estate (ARE) to $1.24 from $1.21. See Seeking Alpha’s list of Quick Dividend Stock Picks.
Corporate events: Arcimoto (FUV) will host an Analyst and Investor Day on May 30 with the theme “Driving the Future Forward.” United Rentals (URI) will host an Investor Day in New York City on May 31. Management is scheduled to provide an in-depth review of the company’s strategy, key initiatives, and financial performance. Nikola (NKLA) CEO Michael Lohscheller will participate in a CEO Fireside Chat and Q&A Platform being held for stockholders on June 1. Arrowhead Pharmaceuticals (NASDAQ:ARWR) will host a Research & Development Day in New York City on June 1 to discuss progress towards the company’s “20 in 25” goal to grow its pipeline of RNAi therapeutics that leverage the proprietary Targeted RNAi Molecule platform to a total of 20 clinical stage or marketed products in the year 2025. Also on June 2, Walmart (WMT) will hold its Associate Celebration and host a Question-and-Answer session with the investment community to be led by CEO Doug McMillon. See a detailed list of key events for next week in Seeking Alpha’s Catalyst Watch.
Investor conferences: The conference schedule heats up next week, led by the COMPUTEX conference in Taipei with this year’s main themes including HPC, Artificial Intelligence Application, Next-Gen Connectivity, Hyperreality, Innovations & Startups, and Sustainability. Nvidia (NVDA) CEO Jensen Huang and Super Micro Computer (SMCI) CEO Charles Liang are two of the COMPUTEX keynote speakers. Other notable conferences on the schedule include KeyBanc Industrials & Basic Materials Conference, TD Cowen Technology, Media & Telecom Conference, Bernstein 39th Annual Strategic Decisions Conference, Evercore Diamonds in the Rough SMID-Cap Conference, Jefferies Software Conference, and Mizuho Auto Technology Conference. The Bernstein conference stands out as one that has led to some share price moves in the past from presenting companies. This year’s slate includes Rivian Automotive (RIVN), Union Pacific (UNP), Restaurant Brands International (QSR), Estee Lauder (EL), Kraft Heinz (KHC), Rent the Runway (RENT), eBay (EBAY), and Yum! Brands (YUM).
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