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The energy sector will be tuned into the delayed OPEC+ meeting next week amid reports of disagreements among members over how much production to cut. Crude oil futures have steadied over the last week in front of the OPEC meeting, but are down more than 10% over the last six weeks. Underlining the high stakes of the meeting, Seeking Alpha analyst Zoltan Ban called crude oil prices the key to interest rates and market performance next year. Key economic reports in the week ahead include updates on new home sales, consumer confidence, construction spending, and the latest reading on the Federal Reserve’s favorite inflation gauge. The PCE reading on core inflation is expected to show a 0.2% month-over-month and 3.5% year-over-year increase. On the corporate calendar, Amazon’s (NASDAQ:AMZN) re:Invent conference is anticipated to create some AI buzz for the Seattle-based company. Tesla (TSLA) will also hold an event at the Gigafactory in Austin to mark the first official deliveries of the long-awaited Cybertruck. Tesla (TSLA) is targeting production of 200,000 Cybertrucks per year, according to CEO Elon Musk. “I can’t emphasize enough that manufacturing is much much harder than the initial design,” noted Musk on the challenges of ramping up production. The end of the week will also see the first batch of November deliveries reports arrive from automakers. The earnings calendar is heavily tilted to the tech sector, with Zscaler (ZS), Salesforce (CRM), Dell Technologies (DELL), and Snowflake (SNOW) some of the notables lined up to report.
Earnings spotlight: Monday, November 27 – Zscaler (ZS) and Seadrill Limited (SDRL).
Earnings spotlight: Tuesday, November 28 – Intuit (INTU), Workday (WDAY), Splunk (SPLK), NetApp (NTAP), Hewlett Packard Enterprise (HPE), and CrowdStrike (CRWD).
Earnings spotlight: Wednesday, November 29 – Salesforce (CRM), Snowflake (SNOW), Dollar Tree (DLTR), Hormel Foods (HRL), and Five Below (FIVE).
Earnings spotlight: Thursday, November 30 – Royal Bank of Canada (RY), Toronto-Dominion Bank (TD), Dell Technologies (DELL), and Kroger (KR).
Earnings spotlight: Friday, December 1 – Bank of Montreal (BMO).
Volatility watch: Short interest levels are elevated on Dutch Bros. (BROS) and Luminar Technologies (LAZR). Options trading volume has moved higher on DISH Network (DISH) and EyePoint Pharmaceuticals (EYPT). The most overbought stocks per their 14-day relative strengh index are Anghami (ANGH), Safety Shot (SHOT), and Bluegreen Vacations Hold (BVH). The most oversold stocks per their 14-day Relative Strength Index are ReAlpha Tech (AIRE), Oportun (OPRT), and Fisker (FSR).
Dividend watch: Companies projected to boost their quarterly dividend payouts include La-Z-Boy (LZB) to $0.20 from $0.185, Graco (GGG) to $0.2525 to $0.235, Morningstar (MORN) to $0.40 from $0.375, and Merck (MRK) to $0.77 from $0.73. See Seeking Alpha’s list of Quick Dividend Stock Picks.
IPO watch: Only one very small IPO is expected to launch next week. Personal care electric appliances seller Fenbo Holdings (FEBO) is looking to raise $5M with its offering. The quiet period ends on Alpha Technology Group (NASDAQ:ATGL), Pineapple Financial (NYSE:PAPL), and Lexeo Therapeutics (NASDAQ:LXEO) to free up analysts to post ratings. Of the three, Alpha Technology has seen the strongest post-IPO performance, with shares more than tripling from the IPO pricing level.
Spinoff watch: Worthington Industries (WOR) will split into two companies on December 1. Worthington Enterprises will include the company’s building products, consumer products, and sustainable energy solutions business, while Worthington Steel (WS) will be the company’s steel processing business. Geoff Gilmore, Chief Operating Officer and Executive Vice President, Worthington Industries, will become President and Chief Executive Officer of Worthington Steel.
Spotlight on AWS: The AWS re:Invent conference in Las Vegas next week will feature keynote addresses, innovation talks by top executives at Amazon (AMZN), and boot camps for developers. AI-related announcements for AWS are anticipated this year. Other companies due to participate at re:Invent include Rackspace Technology (RXT), Commvault (CVLT), privately-held Aviatrix, and Alteryx (AYX). Wall Street analysts have watched re:Invent closely in the past, and in some years, pushed their AWS revenue estimates higher. Monness, Crespi, Hardt analyst Brian White thinks the AI announcements at this year’s event could boost sentiment on the stock. He also noted that as for the financial strength of the unit, it looks as if AWS has stabilized, based off the previous quarter, with profitability improved. AWS’s operating margins in the most recent quarter rose to 30.3%, up from 24.2% in the second-quarter and 26.3% in the year-ago period, due in large part to layoffs.
Auto sales: The auto sector will be in focus at the end of the week when updates on November deliveries begin pouring in from Chinese automakers NIO (NIO), XPeng (XPEV), and Li Auto (LI). In the U.S., J.D. Power forecast that total new-vehicle sales for November will be 10.2% year-over-year to 1,236,000 units. The seasonally-adjusted annualized rate for total new-vehicle sales is expected to be 15.5 million units, up 1.4 million units from a year ago. The November prediction was noted to include a record consumer expenditure mark for the month due to strong sales growth, which outweighed an expected 1.9% decline in transaction prices. “Sales growth is being enabled by improving vehicle availability. Despite the nearly six-week UAW work stoppage, retail inventory levels in November are expected to finish around 1.6 million units, a 7.5% increase from last month and a 43.7% increase compared with November 2022, but still over 40% below pre-pandemic levels,” noted the research firm. Sales to fleet customers are still expected to be relatively elevated given the level of inventory, however, fleet sales are projected to decrease 2.4% from last year. Of note for investors, the increase in new-vehicle supply and higher interest rates are resulting in falling per-unit dealer profits, but those profits continue to exceed pre-pandemic levels. The total retailer profit per unit – which includes gross sales, finance and insurance income – is expected to be down 28.7% year-over-year to $3,002 in November, per J.D. Power.
Conference schedule: The conference schedule picks back up after the holiday-shortened week. The closely-watched UBS Global Technology Conference will feature a long list of participants – including Upwork (UPWK), Xerox (XRX), Qorvo (QRVO), Texas (TXN), Vivid Seats (SEAT), and Seagate Technology (STX). Meanwhile, in the consumer sector, the Barclays Eat, Sleep, Play Conference will include Dutch Bros (BROS), First Watch (FWRG), Travel + Leisure (TNL), Marriott Vacations (VAC), BJ’s Restaurants (BJRI), and US Foods (USFD). The Piper Sandler Healthcare Conference includes ANI Pharmaceuticals (ANIP), BioCryst Pharmaceuticals (BCRX), Neogen (NEOG), Zoetis (ZTS), and Axsome Therapeutics (AXSM).
Box Office preview: The extended Thanksgiving weekend has some high drama at the U.S. box office as Lions Gate’s (NYSE:LGF.A) The Hunger Games: The Ballad of Songbirds & Snakes is estimated to be running slightly ahead of Disney’s (DIS) Wish. If Disney’s animated film does not win the weekend, it would be considered a major upset due to the House of Mouse’s strong tradition of dominating the holiday weekend. Sony/Apple’s biopic Napoleon is also playing at 3,500 locations in the U.S. over the weekend and is forecast to see strong interest in global markets. Also going wide for the holiday, though with modest expectations, are a pair of smaller films set at fancy schools: Oxford drama Saltburn (WBD) and prep-school story The Holdovers (CMCSA). It all adds up to a potentially strong weekend for AMC Entertainment (NYSE:AMC), Cineworld (OTCPK:CNNWQ), Cinemark (CNK), IMAX (IMAX), Marcus Corporation (MCS), Reading International (RDI), Cineplex (CGX:CA), and National CineMedia (NCMI).
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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