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The week begins with a focus on the energy sector as the OPEC Joint Ministerial Monitoring Committee meets to discuss oil production. The committee pledged to cut overall output by two million barrels per day at its last meeting in February and is largely expected to hold that line. Seeking Alpha analyst Andrew Hecht reminded in his preview of the meeting that the JMMC is largely an advisory committee that makes recommendations to OPEC+, and the main cartel members will not meet again until June. SA’s Daniel Jones thinks the oil picture tilts bullish for prices in the back half of the year.
The earnings slate is razor thin in the week ahead, with only reports from Constellation Brands (STZ), Conagra Brands (CAG), and Levi Strauss (LEVI) standing out. However, Walmart’s (NYSE:WMT) annual investor community meeting and a flurry of auto sales and delivery reports from Tesla (NASDAQ:TSLA), Rivian Automotive (NASDAQ:RIVN), General Motors (NYSE:GM) and Chinese electric vehicle makers NIO (NYSE:NIO), XPeng (XPEV), and Li Auto (LI) others have the potential to create some sparks as investors weigh the impact of price cuts and rising competition. Cavenagh Research thinks the price cuts by Tesla should be considered a sign of leadership. On the economic calendar, the March jobs report will be the most watched report of the week. The non-farm payroll numbers will arrive on Good Friday when the market is closed.
Earnings spotlight: Monday, April 3 – Science Applications (SAIC) and Digital Ally (NASDAQ:DGLY).
Earnings spotlight: Tuesday, April 4 – MSC Industrial (MSM), DLocal Limited (DLO), SMART Global (SGH), and Lindsay (LNN).
Earnings spotlight: Wednesday, April 5 – Conagra Brands (CAG), Simply Good Foods (SMPL), and Seadrill Limited (SDRL). Read a breakdown on Simply Good Foods from Seeking Alpha Contributor GS Analytics.
Earnings spotlight: Thursday, April 6 – Constellation Brands (STZ), Lamb Weston (LW), and Levi Strauss (LEVI). Read the Lamb Weston earnings preview from Seeking alpha contributor Daniel Jones.
Volatility watch: Short interest on World Wrestling Entertainment (WWE) is elevated even with the company seeing strong interest from suitors. C3.ai (AI) has also seen short bets pile up higher following the recent ChatGPT-inspired rally. Options trading has spiked over the last week again on Metropolitan Bank Holding (MCB) and Chicken Soup for the Soul Entertainment (CSSE).
Dividend watch: The list of expected dividend changes is short again with the earnings season wound down. EMCOR (NYSE:EME) is forecast to boost its quarterly payout to $0.18 from $0.15, H.B. Fuller Company (FUL) is seen boosting its dividend to $0.21 from $0.19, and Constellation Brands (STZ) is seen boosting its payout to $0.84 from $0.80. See Seeking Alpha’s list of Quick Dividend Stock Picks.
Jobs report preview: The March jobs report will be released on April 6 with the U.S. stock markets closed for the day. Nonfarm payrolls are expected to rise by 240K after a 311K increase in February and the 517K (revised) jump in January. BofA forecasts a 265K increase in nonfarm payrolls to mark a deceleration from the first two months of the year, but at a level that would still be considered historically high and suggest excess labor demand remains elevated. The report is not expected to capture fallback from the failure of Silicon Valley Bank and resulting banking panic, but elevated uncertainty is anticipated to lead to more businesses being cautious moving forward and contribute to slowing payroll growth.
Counting cars: The first few day of April will see major focus on auto sales and deliveries numbers. Edmunds forecast that U.S sales rose 5.2% year-over in Q1 to 3,502,324 new cars and trucks, but fell 1.8% from the Q4 mark. General Motors (GM) is forecast to have been the market share leader at 17.2% after seeing a 15.9% Y/Y gain. Ford (F) +8.5% and Volkswagen/Audi (OTCPK:VWAGY) +16.4% are also forecast to have had strong months, while Stellantis (STLA) is expected to see a 10.2% decline and Toyota (TM) a 10.1% drop with a slip to a 13.3% market share from 15.5% a year ago. Globally, Tesla (TSLA) is expected to report on Q1 deliveries during the first few days of April in what will be a closely watched development for the electric vehicle sector as a whole amid concerns over demand and pricing. The consensus estimate is that Tesla will report deliveries of 420K to bump up from the 405K deliveries in the last quarter. Barclays expects that a minor beat of 425K deliveries could be a positive catalyst for shares with some demand being pulled forward due to the Inflation Reduction Act. Meanwhile, Wedbush Securities forecasts an in-line deliveries tally of 402K Model Y/3 and 18K Model S/X for the quarter with the mix likely skewed on the upside for Model Y post price cuts in China and U.S. “We believe given the scale and scope of Tesla’s production capacity that margins will not be sacrificed at the expense of volumes in 1Q with Auto GM that should be able to meet expectations,” noted analyst Dan Ives. Deliveries reports from Rivian Automotive (RIVN), NIO (NIO), XPeng (XPEV), and Li Auto (LI) could also jolt shares prices.
Corporate events: The World Vaccine Congress will run during the week and feature appearances by a large number of healthcare companies, including Vaxart (VXRT), Tonix Pharmaceuticals (TNXP), Vaxxinity (VAXX), Sanofi (SNY), Johnson & Johnson (JNJ), Moderna (MRNA), Zoetis (ZTS), and Oragenics (OGEN). Academy Sports and Outdoors (ASO) will host its first-ever Analyst + Investor Event on April 4. The Academy management team will present and discuss the retailers’ new long-range strategy plan. Walmart (WMT) will host its 2023 Investment Community Meeting with presentations being webcast from CEO Doug McMillon, CFO John David Rainey, and the company’s business unit CEOs for Walmart U.S., Walmart International and Sam’s Club. Shares of Walmart have rallied in the past when new product and service initiatives were announced at the annual investor event. Check out Seeking Alpha’s Catalyst Watch for more events scheduled for next week.
Quant ratings: Stocks with recent quant rating changes include Yamana Gold (NYSE:AUY) to Strong Buy from Hold, Genuine Parts Company (GPC) to Strong Buy from Hold, and Conn’s (CONN) to Sell from Hold. See the stocks with the very highest rated Seeking Alpha Quant Ratings.
Notable conferences: The B. Riley Securities’ Life Sciences Tools Conference will include appearances from Absci Corporation (NASDAQ:ABSI), Nautilus Biotechnology (NASDAQ:NAUT), and Quantum-Si incorporated (QSI). The event will include panel discussions covering insights from proteomics and advances in AI into drug discovery and innovation. Also watch for news from the Guggenheim Healthcare Talks Conference and the Cantor Future of Oncology Virtual Symposium.
Box office: Paramount’s (PARA) Dungeons & Dragons: Honor Among Thieves will battle Lions Gate Entertainment’s (LGF.A) John Wick: Chapter 4 for the top spot at the weekend box office. The movie is based on Hasbro’s (NASDAQ:HAS) role-playing game that has fascinated for decades. The all-star includes Chris Pine, Michelle Rodriguez, Justice Smith, Sophia Lillis, and Hugh Grant. A successful box office tally could launch a new movie franchise for Paramount and create all sorts of new selling opportunities for Hasbro (HAS). Read a detailed box office preview.
Barron’s mentions: The cover story dives into the potential impact of a ban or sale of TikTok in the U.S. The +50B hours per year that Americans spent on the social media site is seen going primarily to Meta Platforms’ (META) Instagram, Google’s (GOOG) YouTube, and Snap’s (SNAP) Snapchat if it was banned outright. A sale of TikTok is seen as a more logical outcome, although many tech giants would face regulatory roadblocks and others might balk at such a hefty deal price. Microsoft (MSFT) and Oracle (ORCL) top the short list of companies that might be able to pull off an acquisition. A third option laid out by the publication is that the whole TikTok ban question is kicked down the road for the next President to address. Zoetis (ZTS) was also mentioned favorably this week. The world’s only pure-play global animal-health company is tipped to rally as much as 30% with pet spending trends expected to stay strong,
Sources: EDGAR, Bloomberg, CNBC, Reuters
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.