Spotlight On Jobs Report, U.S. Auto Sales, Dollar Store Drama, And Citi TMT Conference

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The economic calendar in the U.S. for the holiday-shortened week is headlined by the August Jobs report, which is forecast to show more strength than what was seen in July, but not dramatic enough to knock the Federal Reserve off course for interest rate cuts at the September and November meetings. Even though investors continue to bid up equities on the view that coming rate cuts from the Federal Reserve will be some sort of panacea for the economy, Seeking Alpha Investing Group Leader Bret Jensen had a recent breakdown of why investors should be wary. In the energy market, key OPEC+ nations may finalize a decision next week on whether to revive oil production in Q4. Oil futures have been volatile as traders have weighed potential supply disruptions in the Middle East, particularly from Libya and Iraq. The corporate calendar includes trips into the earnings confessional by Zscaler (NASDAQ:ZS) (recent analyst breakdowns), Broadcom (AVGO) (preview), and DICK’S Sporting Goods (DKS) (analysis). Dollar Tree (DLTR) will also report earnings with tensions high in the discounter sector after Dollar General’s 30% post-earnings swoon. Corporate events of note in the week ahead, include an Intel (NASDAQ:INTC) event to discuss the tech company’s Lunar Lake chips, the Roblox (RBLX) developers conference, and the highly anticipated Citi Global Technology, Media and Telecom Conference.

Earnings spotlight: Tuesday, September 3 – Zscaler (ZS), GitLab (GTLB), and PagerDuty (PD). See the full earnings calendar.

Earnings spotlight: Wednesday, September 4 – Hewlett Packard Enterprise (HPE), Dollar Tree (DLTR), Dick’s Sporting Good (DKS), Casey’s General Stores (CASY), C3.ai (AI) and ChargePoint Holdings (CHPT). See the full earnings calendar.

Earnings spotlight: Thursday, September 5 – Broadcom (AVGO), DocuSign (DOCU), Samsara (IOT), NIO (NIO), Rent the Runway (RENT) and Planet Labs (PL). See the full earnings calendar.

Volatility watch: Options trading volume is elevated on Terns Pharmaceuticals (TERN) and Canoo (GOEV). The most overbought stocks per their 14-day relative strength index include G1 Therapeutics (GTHX), Elite Pharmaceuticals (OTCQB:ELTP), and FreightCar America (RAIL). The most oversold stocks per their 14-day Relative Strength Index include Bolt Projects (BSLK), Verrica Pharma (VRCA), and Red Robin (RRGB). Short interest has moved higher on Kura Sushi (KRUS) and Crown LNG (CGBS). VIZIO (NYSE:VZIO) will be watched closely during the week, with Walmart management presenting at two conferences. Shares of VIZIO traded about 2.6% below the acquisition offer from Walmart at the time of publication as the regulatory review process continue to play out.

IPO watch: Powell Max Limited (NASDAQ:PMAX) is the only IPO expected to price next week and begin to trade. The Hong Kong-based financial communications service firm plans to raise as much as $9.9 million by offering 1.65 million shares at a price range of $4 to $6. At the midpoint of the proposed range, Powell Max would have a market value of $71 million. The IPO lockup period expires for blocks of shares of Lucas GC Limited (NASDAQ:LGCL).

Dividend watch: Companies that have an ex-dividend date coming next week include McDonald’s (MCD), Lockheed Martin (LMT), NIKE (NKE), and Cigna (CI). Companies forecast to increase their quarterly dividend payouts include VICI Properties (NYSE:VICI) to $0.44 from $0.415, Stewart Information (STC) to $0.50 from $0.475, and Brady (BRC) to $0.24 from $0.235. Read through some of the dividend stock picks from Seeking Alpha analysts.

August Jobs Report preview: The August U.S. Jobs report will be released on September 6. Economists expect nonfarm payroll addition of 163K for the month, vs. 114K in July. The unemployment rate is expected to drop to 4.2% from 4.3% and average hourly earnings are forecast to be up 0.2% month-over-month. Nomura said underlying employment growth is cooling, but the weakness seen in July appeared was exaggerated by a temporary weather impact, which should normalize in August. “Hiring is slowing, which should put upward pressure on the unemployment rate in the medium term, but without widespread layoffs the rise should be gradual,” noted the firm. Nomura has a forecast for three 25-point interest rate cuts by the Federal Reserve. BNP Paribas thinks payrolls growth will surprise to the upside. The investment firm also expects 25-point rate cuts in September, November and December.

Investor events: Intel (INTC) will host an event in Berlin to launch the next generation of Intel Core Ultra processors, code-named Lunar Lake. During the livestreamed event, the company will reveal details on the new processors’ x86 power efficiency, core performance, graphics performance and AI computing power. Keynote addresses from Roblox’s (RBLX) Developers Conference could also capture the attention of investors. The Citi Global Technology, Media and Telecom Conference will include participation from Microsoft (MSFT), Super Micro Computer (SMCI), Dell Technologies (DELL), Intel (INTC), MongoDB (MDB), and Etsy (ETSY). The Citi TMT conference has led to share price moves in the past based off management updates. Other notable conferences on the schedule include the UBS Global Materials Conference, the Morgan Stanley Industrial CEOs Unplugged, the Morgan Stanley 22nd Annual Global Healthcare Conference, and the Goldman Sachs 31st Annual Global Retail Conference. The Bloomberg Edge Summit conference will include speakers from Google Cloud and Nvidia (NVDA) on turning the potential of AI into actionable strategies.

U.S. auto sales: Sales volume in August, which will include deals completed during the Labor Day holiday weekend, is forecast By Cox Automotive to rise more than 8% from last year and increase 12% from last month. Following the disruption of software outages in June and recovery in July, new-vehicle inventory was expected to normalize throughout August. “Historically, the Labor Day timeframe has been one of the larger sales promotion periods for the industry – and that should boost volume this year. However, this monthly report will also benefit from 28 selling days, more than any other month this year, and the long holiday weekend, so higher volume is expected,” updated Cox Automotive Senior Economist Charlie Chesbrough. One of the bigger trends in the automobile sector is expected to continue, with growth in hybrid sales outpacing electric vehicle sales. For investors, Gabelli Funds portfolio manager Brian Sponheimer thinks what the automakers say as it relates to incentive levels and average monthly payments will be crucial in determining if profitability can rise during a flat-production period. On a year-to-date basis, auto manufacturer stocks with share price gains include Ferrari (RACE) +44%, General Motors (GM) +37%, Honda Motor (HMC) +6%, and Toyota Motor (TM) +3%.

Dollar store drama: Dollar Tree (DLTR) will report earnings next week, with tension running high in the discounter sector after Dollar General (DG) saw a 30% earnings decline. The stock had its worst trading day ever after the company warned on “financially constrained” customers. The view from Wells Fargo is that the Dollar General (DG) turnaround efforts have clearly run into problems. “We believe the macro, competition, and underinvestment are taking a toll,” noted analyst Edward Kelly. While Dollar General (DG) management seems prepared to take more aggressive action, Kelly warned that the challenges remain. Specifically, Kelly thinks the retailer needs to make a large investment in labor (hours/rate) to restore confidence in the chain. Clearly, the macroeconomic backdrop and pressure on lower-income consumers has been a factor in DG’s tough stretch, but Kelly also highlighted that intensified competition, especially from Walmart (WMT), is also a consideration. Evercore ISI analyst Michael Montano also said Dollar General’s (DG) results show the challenge of maintaining market share with Walmart (WMT) winning in a slower growth environment. On Seeking Alpha, Investing Group Leader Leo Nelissen said Walmart, Aldi, and ultra-low-cost brands such as Temu are all disrupting Dollar General’s (DG) business model by providing even more lower-priced items to consumers and value at scale. Amid the spotlight on Dollar General (DG), Dollar Tree (DLTR) shed 14% during the week.