The week ahead 04/17/2023
Key Earnings Announcements:
A crowded week of earnings is headlined by Tesla, Netflix, Taiwan Semiconductor, P&G, J&J, and more.
Monday (4/17): Charles Schwab, J.B. Hunt, M&T Bank, Pinnacle Financial, State Street Corp
Tuesday (4/18): Bank of America, BNY Mellon, Ericsson, Goldman Sachs, Intuitive Surgical, Johnson & Johnson, Lockheed Martin, Netflix, Prologis, United Airlines, Western Alliance Bancorp
Wednesday (4/19): Abbott, Alcoa, Ally Financial, ASML, Baker Hughes, Citizens Financial Group, Discover, IBM, Lam Research, Morgan Stanley, Nasdaq, Tesla, U.S. Bancorp
Thursday (4/20): American Express, AT&T, Blackstone, CSX, DR Horton, Philip Morris, PPG Industries, Rite Aid, Seagate Technology, TSMC, Union Pacific
Friday (4/21): Autoliv, HCA Healthcare, P&G, Regions Bank, SAP, Schlumberger,
What We’re Watching:
Financials Sector Continued
Below is an excerpt from Jamie Dimon during the JPMorgan Chase (JPM) earnings call last week. You may need to click the picture to read it clearly, but we encourage trying to keep tabs on what titans of the industry are saying.
Pinnacle, Bank of America, BNY Mellon, U.S. Bancorp, Morgan Stanley, and many more will give us a better overall outlook of the financials sector.
Warren Buffett’s Berkshire Hathaway (BRK) Indicates Concern for Taiwan Semiconductor (TSM) Shareholders
We’re excited to see the earnings of one of the world’s most important companies — Taiwan Semiconductor. Warren Buffett expressed a “danger of seismic action” for the company in an interview… and then seemed to try and back off from his original thought.
Buffett has recently sold billions in TSM stock and elected officials have been betting against the stock.
Check out this video from our friends at Quiver Quantitative.
Blackstone (BX) Announces Largest Global Real Estate Fund
Housing is a key theme for this week as you’ll read below in the Major Economic Events section. We look forward to Blackstone hopefully speaking more about their newest real estate fund.
“Blackstone said that, anticipating changing macro trends, it has been shifting its portfolio away from assets facing “headwinds” such as traditional office and malls and is now approximately 80% concentrated in logistics, rental housing, hospitality, lab office and data hubs.
It said it is ready to take advantage of opportunities in its highest conviction sectors across the globe.” — CoStar
Keep in mind — Blackstone is the largest property owner in the world.
Investor Events / Global Affairs:
China could be the new top dog, Crypto “Alt Coins” look ready to make a move, and BlackRock has absurdly high expectations.
IMF Projects China as Top World Growth Source
We mentioned yesterday that the International Monetary Fund has a rather bleak outlook for the world economy. However, what could be more concerning is the high expectations they have for Chinese excellence.
China is projected to be the top contributor to global growth over the next five years — with an expected growth contribution that is double the percentage of the United States.
The reason for concern is, of course, the rise of ‘BRICS’ nations (Brazil, Russia, India, China, & South Africa) over the G-7. There is currently a war going on for energy and currency domination. ‘BRICS’ is trending upward.
Crypto “Alt Season” Call?
Nothing too big to report here, but one of our favorite follows in the crypto space — Pentoshi — believes an “Alt Season” could be arriving for crypto.
We may look to use a big move in crypto as an opportunity to reduce some exposure to the space. More to come on this in one of the upcoming Week in Review editions.
BlackRock (BLK) Seen Topping $15 Trillion in Five Years Time
We intentionally included an outdated chart above. This is from 2022, and it’s lauding the fact that BlackRock surpassed $10 TRILLION in AUM during 2021.
It’s now 2023 — and we have Morgan Stanley saying that BlackRock could hit $15 trillion in assets under management by 2028.
“BlackRock’s scale, diversification, disciplined investments made across market cycles and efficient operations with focus on expenses should support continued organic growth and margin expansion.” — Michael Cyprys, Morgan Stanley Analyst
Major Economic Events:
Housing is in focus — the Leading Economic Indicators and flash S&P PMI results rounding out the week.
Monday (4/17): Empire State Manufacturing, Home Builder Confidence Index, Speech by Richmond Fed President Barkin
Tuesday (4/18): Building Permits, Housing Starts, Speech by Fed Gov. Bowman
Wednesday (4/19): Fed Beige Book, Speech by NY Fed President Williams
Thursday (4/20): Existing Home Sales, Philadelphia Fed Manufacturing Survey, Speeches by Fed Gov. Bowman, Fed Gov. Waller, Atlanta Fed President Bostic, Cleveland Fed President Mester, & Dallas Fed President Logan, U.S. Leading Economic Index
Friday (4/21): S&P Manufacturing PMI (flash), S&P Services PMI (flash), Speech by Fed Gov. Cook
What We’re Watching:
Pivotal Housing Data
Michael Gayed of the Lead-Lag Report thinks that housing is about to become a major deflationary force. Here’s a link to his thread about why the data this week is so important.
The picture shown above is a critical piece to his theory — the number of homes for sale is significantly up from a year ago.
Housing prices have soared over the last 10 years or so because demand has far outweighed supply. Supply could be catching up now. Demand continues to fall with rising interest rates.
All else equal — housing prices should begin to decline more across the country.
U.S. Leading Economic Index
The Conference Board’s primary recession indicator continues to be firing warning shots. We find out if there’s a rebound in sight this week.
S&P Purchasing Managers’ Indices (PMIs)
Below are the results from the most recent S&P Global Services and Manufacturing PMI releases”:
SERVICES — “Renewed rise in service sector new orders, but selling price inflation quickens again.”
MANUFACTURING — “Manufacturing decline eased amid renewed rise in output in March.”
Let’s see where things land for the initial releases this week!
Which stocks moved the most last week.
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