Stocks To Watch: Investors Strap In For U.S. Jobs Report, Auto Numbers, And Conference Season

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Investors will come back from the holiday break in the U.S. to a heavy economic calendar that includes updates on consumer confidence on November 29, the second estimate on Q3 GDP on November 30, a report on construction spending on December 1, and the highly-anticipated employment report on December 2. Economists expected 200K payroll additions in November and for the unemployment rate to hold steady at 3.7%. Hourly earnings are seen decelerating to +0.3% growth from +0.4% in October. The jobs report will be crucial in setting rate hike expectations and terminal rate forecasts just ahead of the next FOMC meeting. The general line of thinking is that if the employment report is stronger than anticipated, the market could take a dip on concerns the Federal Reserve will be more aggressive with rate hikes, while a weak print could raise hopes the interest rate cycle will be more favorable. Outside of the macro focus, the earnings slate in the week ahead includes Intuit (INTU), Salesforce (NYSE:CRM), Dollar General (DG), and XPeng (NYSE:XPEV) – while a heavy schedule of conferences runs across all sectors.

Earnings spotlight: Monday, November 28 Pinduoduo (PDD).

Earnings spotlight: Tuesday, November 29 Intuit (INTU), Workday (WDAY), CrowdStrike (CRWD), Hewlett Packard Enterprise (NYSE:HPE), and NetApp (NTAP).

Earnings spotlight: Wednesday, November 30 – Salesforce (CRM), Royal Bank of Canada (RY), Splunk (SPLK), XPeng (XPEV), Snowflake (SNOW), and Five Below (FIVE).

Earnings spotlight: Thursday, December 1 – Toronto-Dominion Bank (TD), Dollar General (DG), Ulta Beauty (ULTA), Marvell Technology (MRVL) and Kroger (KR).

Earnings spotlight: Friday, December 2 – Cracker Barrel (CBRL) and Genesco (NYSE:GCO).

IPO watch: Adamas One (OTC:JEWL), Erayak Power Solution (RAYA) and Curative Biotechnology (OTCPK:CUBT) could price their IPOs and begin trading during the week. The IPO lockup period on TOP Financial Group (NASDAQ:TOP) expires for a block of shares. The stock is up slightly from its IPO price.

Salesforce earnings preview: Salesforce (CRM) will report results on November 30 to expectations for revenue of $7.8B and EPS of $1.22 to be disclosed. On the conference call, analysts will be looking for the assumptions around the new guidance and color on the company’s M&A strategy. Wedbush Securities said its checks for the quarter were generally positive with some weak spots around lengthening sales cycles and isolated deal slippage seen in the U.S. and Europe. As anticipated, the softer macro backdrop is noted to be at play with a number of deals taking longer to get completed. “We believe overall CRM should be able at least hit and slightly exceed Street estimates for the quarter and will be a key step in the right direction for the Street’s confidence in the CRM story through this near-term macro storm,” previewed analyst Dan Ives. Elsewhere on Wall Street, Deutsche Bank cut estimates on CRM ahead of the report due to the macro uncertainty but stayed generally bullish on the stock, while Jefferies warned on order delays and slow Slack integration in setting its estimates below the consensus marks. For its part, Morgan Stanley said it favors the risk/reward at CRM, with low investor sentiment, favorable positioning, and attractive valuation at less than 4X CY24 sales, 15X CY24 free cash flow and 22X CY24 EPS.

Automobile sales/deliveries preview: Chinese electric vehicle makers NIO (NIO), XPeng (XPEV) and Li Auto (LI) will post their monthly deliveries reports on December 1. The last several months have seen share price jolts for the three EV upstarts after the updates came in. Some updates on U.S. auto sales are also anticipated. S&P Global Mobility forecast U.S. light vehicle sales will increase 11% year-over-year in November to 1,122,300 units. That tally will represent a SAAR level of 14.2M. Bank of America’s forecast calls for a higher SAAR level of 14.5M. The firm noted sales at that level would follow the trend of recession-level SAARs reported this year, which has largely been a function of curbed supply and limited inventory. BofA did point to some early signs of price moderation and mix normalization. “Despite apparent supply challenges, concerns of underlying demand weakness are emerging because of persistent high inflation, weak consumer confidence, and increasing risks of a US recession,” warned BofA. As far as pricing, new vehicle transaction prices continue to rise but at slower pace than earlier this year. The average new car price in November is estimated by J.D. Power/LMC Automotive to be up 3.1% to set a record for the month at $45,872. Looking ahead, industry watchers think sales should continue to improve with overall production and inventory trends improved. However, any signals of faster-than-expected growth in inventory could mean that auto consumers are feeling the pressure of the current economic headwinds and retreating from the market, which could impact pricing and margins in the sector in 2023. Share prices in the auto sector have fallen off dramatically in 202, including a 71% decline in Rivian Automotive (RIVN) and 48% slide for Tesla (TSLA). The two automaker stocks that have held up the best in 2022 are Honda (HMC) with a 14% drop and Ferrari (RACE) with a 16% decline.

Corporate events: Amazon’s (AMZN) four-day AWS re:Invent 2022 event will begin from Las Vegas. The company typically highlights AWS products and services at the event and provides time slots for other companies to showcase their products. Sumo Logic (SUMO), Rackspace Technology (RXT), and Satellogic (SATL) are some of the companies that are participating this year. In the past, Datadog (DDOG), NetApp (NTAP) and C3.ai (NYSE:AI) have seen share price jolts around developments at re:Invent. This year’s event will take place with AWS reportedly stretching a hiring freeze until the first quarter of 2023. Companies holding investor events during the week include Nestle (OTCPK:NSRGY), Macerich Company (NYSE:MAC), Cerence (NASDAQ:CRNC) and Emerson (NYSE:EMR). The New York Times DealBook Summit on November 30 will include interviews or talks with BlackRock (BLK) CEO Larry Fink, Amazon (AMZN) CEO Andy Jassy, and Meta (META) CEO Mark Zuckerberg. The most attention may be on Andrew Ross Sorkin’s interview with FTX’s Sam Bankman-Friedman in what is being previewed as a “nothing off limits” talk. Also of note, Farfetch (FTCH) will host its first-ever Capital Markets Day on November 30. Check out Seeking Alpha’s Catalyst Watch for more on the events scheduled for next week that could impact shares prices.

Notable conferences: Notable gatherings scheduled for the week ahead include the Credit Suisse Technology Conference, the Citi Basic Materials Conference, the Credit Suisse Global Industrials Conference, the Barclays Eat, Sleep, Play Conference, the Evercore ISI HealthCONx Conference, the Piper Sandler Healthcare Conference, and the Canaccord Defensive Technology Conference.

Barron’s mentions: Quantum computing is the topic of the cover story this week. While publicly traded quantum computing companies have suffered substantial losses this year after investors fled high-risk bets in general, the point is drilled home that quantum computing still has enormous upside by solving computationally intensive problems with huge numbers of variables. Quantum computing is seen having the potential to speed up drug development, improve financial modeling, as well as boost the efficiency of electric batteries. Apart from the hundreds of quantum startups looking to break out, there are public-traded quantum plays such as Rigetti Computing (NASDAQ:RGTI), IonQ (IONQ), Arqit Quantum (NASDAQ:ARQQ), D-Wave Quantum (NYSE:QBTS), and Quantum Computing (NASDAQ:QUBT) to consider. A catch-all quantum investment is the Defiance Quantum ETF (QTUM), which includes some well-known stocks like Texas Instruments (TXN) and Honeywell International (HON).

Sources: EDGAR, Bloomberg, CNBC, Reuters