There is a distinct end-of- feel about the economics calendar. Thanksgiving has come and gone. Black Friday in the US has come and gone, which means that many people will be winding down for the start of the festive season.
That said, a few Fed officials will give their two-pennies worth about where they think interest rates should be heading. They include Christopher Waller, John Williams, Adriana Kugler, Austan Golsbee, Alberto Musalem, Michelle Bowman, Beth Hammack, and the big kahuna himself, Fed chair J Powell.
Staying in the US, the November non-farm payroll could have rebounded strongly to 183,000 last month from the shocking below-forecast number of just 12,000 in an October. A healthy labour market could make the Fed think twice about cutting rates anytime soon.
Staying with interest rates, the Reserve Bank of India will announce its latest benchmark policy repo rate. The central bank has left the cost of money unchanged for 10 consecutive meeting. But a slowdown in economic growth could prompt a loosening of monetary policy.
Corporate Events
Salesforce (NYSE: CRM) is expected to report revenue growth for the third quarter in the high single digits. So, gone are the days of double-digit expansion. Problem is that Salesforce’s customers may have been cutting back on IT spending in the face of economic uncertainty. Thankfully, CRM has been focussing on margin expansion. In other words, cost cutting. Consequently, earnings growth could still be in the mid to high teens.
Staying in the software sector, Okta (Nasdaq: OKTA) is forecast to post a creditable low-teens rise in earnings for the third quarter. But the cyber security specialist could be a victim of cutbacks in investments by customers in the face of macroeconomic challenges. Sounds remarkably similar to the headwinds that Salesforce is experiencing.
Campbell Soup (NYSE: CPB) is in a transition phase. It wants to become a more efficient business by optimising its portfolio. It will even drop “soup” from its name. Following an 11% increase in fourth-quarter revenue, the company is expected to report a similar increase in revenue in its new fiscal first quarter. Earnings before exceptional items could be down a smidgen, though.
Turning to fashion, American Eagle Outfitters (NYSE: AEO) disappointed investors when it provided a soft outlook for the third quarter. The young-adult clothing retailer said revenue growth could be flat because its smaller brands were struggling.
Foot Locker (NYSE: FL) expects revenue for the year to be in the in the range of a 1% decline to a 1% growth from the previous year. In August, the sneaker retailer said same-store sales grew for the first time in six quarters. It has been a hard slog for CEO Mary Dillon who was poached from Ulta Beauty (Nasdaq: ULTA) two years ago. But her strategy to turnaround the company appears to be working.
Meanwhile, Ulta Beauty has been under the cosh after CEO Dave Kimbell warned that the company was suffering from consumers who are increasingly cautious with their spending and from heightened competition in the beauty industry. At the time of its second-quarter earnings, the cosmetics company said same-store sales for the full year could be flat to down 2%.
Other companies pencilled in for earnings include Lululemon Athletica (Nasdaq: LULU) and Victoria’s Secret Co (NYSE: VSCO). Lululemon appears to be suffering from a botched product launch when its Breezethrough leggings were criticised by customers for having an unflattering fit. But there were no problems at intimate-apparel retailer Victoria’s Secret, where customers have responded well to its Victoria’s Secret Dream lingerie collection.
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