Stocks To Watch: Time To Connect The Dots
Welcome to Seeking Alpha’s Stocks to Watch – a preview of key events scheduled for the next week. Follow this account and turn the e-mail alert on to receive this article in your inbox every Saturday morning.
There are two monster meetings on the agenda next week that could shake things up for investors now officially stuck in a stock market correction. The Federal Reserve’s policy makers meet from December 18-19 in the U.S., while China’s leaders are expected to gather December 19-21 to hold their annual economic policy-setting meeting. The overwhelming consensus of economists is that the Fed is likely to raise its benchmark interest rate by a quarter-point to a range of between 2.25% and 2.50% and that the closely-watched dot plot will indicate two rate hikes in 2019. If there is going to be any sort of drama out of the Fed event, it will probably occur during Fed Chairman Jerome Powell’s last presser of the year. Meanwhile, the word from Beijing is that pro-growth measures will be fired off during the economic meeting and more signs of “opening up” markets will be showcased. It’s possible that the two events could cool off anxiety over global growth, interest rates and tariffs – but in a year of wildcards we’re not taking any bets. There is also the matter of that little government shutdown that could arrive next week, although it’s being categorized in large part as political theater more than an actionable trading event.
Notable earnings reports: Oracle (NYSE:ORCL) and Red Hat (NYSE:RHT) on December 17; Micron (NASDAQ:MU), Carnival (NYSE:CCL), Darden Restaurants (NYSE:DRI), FedEx (NYSE:FDX) and Navistar (NYSE:NAV) on December 18; General Mills (NYSE:GIS), Pier 1 Imports (NYSE:PIR), Paychex (NASDAQ:PAYX) and Winnebago (NYSE:WGO) on December 19; Nike (NYSE:NKE) and BlackBerry (NYSE:BB) on December 20; CarMax (NYSE:KMX) on December 21. See Seeking Alpha’s Earnings Calendar for the complete list of earnings reporters.
IPOs expected to begin trading: Aptorum on December 18.
IPO lockup expirations: Eidos Therapeutics (NASDAQ:EIDX) on December 17; I3 Verticals (NASDAQ:IIIV), Magenta Therapeutics (NASDAQ:MGTA), Avrobio (NASDAQ:AVRO), Essential Properties Realty Trust (NYSE:EPRT), Kezar Life Sciences (NASDAQ:KZR) and Xeris Pharmaceuticals (NASDAQ:XERS)on December 18.
Projected dividend changes (quarterly): Fifth Third (NASDAQ:FITB) to $ 0.22 from $ 0.18, Lamb Weston (NYSE:LW) to $ 0.195 from $ 0.1913, Pfizer (NYSE:PFE) to $ 0.36 from $ 0.34, ABM Industries (NYSE:ABM) to $ 0.180 from $ 0.175, Andersons (NASDAQ:ANDE) to $ 0.170 from $ 0.165, Cantel Medical (NYSE:CMD) to $ 0.10 from $ 0.085.
60 Minutes: CBS (NYSE:CBS) says the news show will broadcast a report on Sunday night about opioid makers, distributors and manufacturers. Keep an eye on McKesson (NYSE:MCK), AmerisourceBergen (NYSE:ABC), Cardinal Health (NYSE:CAH), Mallinckrodt (NYSE:MNK), TEVA Pharmaceuticals (NYSE:TEVA), AbbVie (NYSE:ABBV), Dr. Reddy’s Laboratories (NYSE:RDY), Insys Therapeutics (NASDAQ:INSY), Endo International (NASDAQ:ENDP), Reckitt Benckiser Group (OTCPK:RBGLY) among others if any sharp elbows are thrown.
Capitol Hill watch: An early test of Senate Republicans’ desire to talk about marijuana reform arrives next week when Senator Cory Gardner attempts to attach the States Act to the criminal justice reform bill. It’s possible some marijuana-related names such Cronos Group (NASDAQ:CRON), Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) could be active if the GOP senators tip their hands.
GM pressure cooker: While shares of General Motors (NYSE:GM) continue to sputter along on headline risk, analysts see upside down the road. There’s Deutsche Bank pointing to deep corporate restructuring and industry consolidation as potential GM catalysts, as well as Bank of America Merrill Lynch saying the current dividend is likely safe. If the automaker can turn around the political broadsides it’s taking on the focus could turn to long-term initiatives such as the autonomous EV fleet (Cruise Automation + Bolts), car sharing (Maven) and connectivity (OnStar).
M&A tidbits: First-round bids are due in on Campbell Soup’s (NYSE:CPB) Arnott’s business before Christmas. Kraft Heinz (NASDAQ:KHC), Mondelez International (NASDAQ:MDLZ) and Ferrero are reported to be interested in the biscuits brand. Shareholders at Enbridge Energy Partners (NYSE:EEP) and Enbridge Energy Management (NYSE:EEQ) will vote on the merger on December 17. The $ 2.1B acquisition of Endocyte (NASDAQ:ECYT) by Novartis (NYSE:NVS) goes to a vote on December 20. Medtronic’s (NYSE:MDT) acquisition of Mazor Robotics (NASDAQ:MZOR) is expected to close on December 21. Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) expect to land U.S. security clearance approval next week for their planned combination.
Strategic update: Achillion Pharmaceuticals (NASDAQ:ACHN) is hosting a live webcast and conference call on December 17. CEO Joseph Truitt and Chief Medical Officer Dr. Stephen Zelenkofske will present the company’s 2019 development plans along with interim data on Phase 2 clinical trials in PNH and C3G as well as initial Phase 1 data on Achillion’s next generation factor D inhibitors.
Guidance update: Eli Lilly (NYSE:LLY) has an investor community meeting set for December 19. The company will update its 2019 guidance expectations during the meeting. Shares of Eli Lilly are up 36% YTD.
JV talk: Albemarle (NYSE:ALB) is scheduled to discuss its agreement to form the Wodgina Lithium joint venture in Western Australia during a webcast presentation on December 17.
Strategy talk: Cisco (NASDAQ:CSCO) is scheduled to host an Enterprise Strategy conference call on December 17.
Banking updates: Credit card charge-offs and delinquencies reports are due in on December 17 from Alliance Data Systems (NYSE:ADS), American Express (NYSE:AXP), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Capital One Financial (NYSE:COF), Discover Financial (NYSE:DFS), JPMorgan (NYSE:JPM) and Synchrony Financial (NYSE:SYF).
Box office: Sony (NYSE:SNE)/Marvel feature Spider-Man: Into the Spider-Verse is expected to dominate the weekend box with a projected haul of $ 40M, while Warner Brothers’ The Mule is forecast to bring in $ 17M. At the end of next week, the Christmas/New Year’s rush launches with Aquaman (Warner Bros.), Bumblebee (Paramount), Second Act (STX Entertainment), Welcome to Marwen (Universal) and Cold War (Amazon Studios) arriving in theaters. The U.S. box office is up 10.1% YTD through December 12.
Barron’s mentions: The publication compiles a list of its top ten stock picks for 2019. Alphabet (GOOG, GOOGL), Apple (NASDAQ:AAPL), Bank of America (BAC), BlackRock (NYSE:BLK), Caterpillar (NYSE:CAT), Chevron (NYSE:CVX), Daimler (OTCPK:DDAIF), and Delta Air Lines (NYSE:DAL), Energy Transfer (NYSE:ET) and Toll Brothers (NYSE:TOL) all make the list. Other stocks singled out as potential market outperformers next year include PayPal (NASDAQ:PYPL), Visa (NYSE:V), Mastercard (NYSE:MA), NextEra (NYSE:NEE) and Applied Materials (NASDAQ:AMAT). Overall, the market strategists interviewed by Barron’s see a +10% return for the major stock indexes.
Stocks to Watch: Our publication is taking a short break for the holidays. We will be back on January 5 to help get you ready for the first full trading week of 2019. In the meantime, if you have any suggestions for our weekly preview of the market, please add them to the comment stream below or e-mail us at [email protected]
Sources: Nasdaq, EDGAR, Bloomberg, CNBC
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.