What to Expect in the Week Ahead (GME and JEF Earnings; PCE, Personal Income and Personal Spending Data)

Moomoo Breakfast US joined discussion · Mar 24 02:23

What to Expect in the Week Ahead (GME and JEF Earnings; PCE, Personal Income and Personal Spending Data)

After another busy week for the FOMC, the upcoming week seems to have settled down a bit. Only a few companies will be releasing their earnings, and the market anticipates the release of the Fed's preferred gauge on Friday, the core PCE inflation data.

Earnings for $McCormick & Co(MKC.US)$ and $GameStop(GME.US)$ will be released on Tuesday, followed by $Carnival(CCL.US)$ and $Jefferies Financial(JEF.US)$ on Wednesday, with $Walgreens Boots Alliance(WBA.US)$ and $Hut 8(HUT.US)$ rounding out the week on Thursday.

Earnings Preview

Sales for $GameStop(GME.US)$ likely experienced another decline in the previous quarter, despite an 84% surge in earnings, driven by a focus on reducing costs, according to estimates. The upcoming report is expected to shed light on the company's unique strategy, which includes permitting Chief Executive Officer Ryan Cohen to invest the company's cash reserves in the stock market.

$McCormick & Co(MKC.US)$ sales are expected to have declined, with a 2.4% decrease in its consumer business offsetting a modest 0.6% growth in the flavor solutions division. The consumer sector's performance has been tepid, with a slow recovery in volume. Bloomberg Intelligence predicts that, although the flavor solutions sector is poised for faster growth, the pace of this expansion will likely be more gradual moving forward.

$Jefferies Financial(JEF.US)$ is expected to see its adjusted earnings grow, breaking a streak of eight consecutive quarters of decline. According to Bloomberg Intelligence, the institutional brokerage, alongside Goldman Sachs, may benefit from increased revenue, particularly from a resurgence in debt-related fees this year.

$Walgreens Boots Alliance(WBA.US)$ is on track to achieve a modest sales increase of 2.9%, amid its transition into a more comprehensive health-care services provider. Analysts are particularly interested in insights regarding the company's strategic review, focusing on three key areas: the future role of its retail operations, asset evaluation, and the expansion of pharmacy services, according to Cowen.

The Forth-Quarter GDP Final Result

The third estimate for the 4Q GDP of 2023 is expected to hold steady at a 3.2% annualized rate, although there's a possibility it might adjust downward due to an expanding trade deficit and larger inventory reductions. While consumer spending has been the primary growth engine in the last quarter, its momentum is anticipated to decelerate this year. Consequently, the US economy will likely depend more on other GDP components, including investment, government expenditure, and net exports, to maintain its growth trajectory.

PCE, Personal Income, and Personal Spending

The robust jobs report and a surge in retail sales for February indicate a likely increase in the upcoming personal income and outlays report. Enhanced by hiring, wage gains, and more hours worked, personal income is set to rise, with spending growth primarily fueled by auto sales, despite other sectors showing weaker performance. This scenario is expected to push the monthly PCE inflation to 0.4%, with annual headline inflation climbing slightly to 2.5% from January's 2.4%. Core inflation's monthly increase is anticipated to slow to 0.3%, maintaining the annual rate at 2.8%. The inflationary pressure in February is attributed mainly to transportation services, including airfare and car rentals, even as 'supercore' PCE inflation, which excludes housing rents, is predicted to decelerate to 0.3%, with a noticeable slowdown in financial services inflation from the previous month.

Sectors Performance