Wall Street Breakfast: The Week Ahead

Economic reports in the week ahead - Strap in. The S&P 500 Index is down 8% from its all-time high and is off 7% for the month of January in a market buzzing with volatility. Investors head into next week facing the reality that a poor performance by the stock market in January is typically a warning sign for a more sluggish year. Over the last 50 years, a negative S&P 500 Index return in January was followed by an average return for the next 11 months of 6.7% vs. the average rest-of-the-year return of 14.0% when January saw a gain. Big earnings reports are due in from Alphabet (NASDAQ:GOOG), AbbVie (NYSE:ABBV), Amazon (NASDAQ:AMZN), Ford Motors (NYSE:F), Amazon (AMZN) and Starbucks (NASDAQ:SBUX). The economic calendar includes the January jobs report, which could surprise due to the large number of hourly workers who were caught up by Omicron quarantines during the month. The unemployment rate is expected to hold steady at 3.9%. In the energy market, the OPEC+ meeting will be watched closely with supply and demand factors in the spotlight. At the very end of the week, the Winter Olympics in Beijing begin.

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Welcome to the Sunday edition of Wall Street Breakfast, which previews events for investors to watch during the upcoming week. If you want to receive this a day earlier, follow Stocks to Watch and select the option to receive email notifications. Outlook Economic reports in the week ahead Strap in. The S&P 500 Index is down 8% from its all-time high and is off 7% for the month of January in a market buzzing with volatility. Investors head into next week facing the reality that a poor performance by the stock market in January is typically a warning sign for a more sluggish year. Over the last 50 years, a negative S&P 500 Index return in January was followed by an average return for the next 11 months of 6.7% vs. the average rest-of-the-year return of 14.0% when January saw a gain. Big earnings reports are due in from Alphabet (NASDAQ:GOOG), AbbVie (NYSE:ABBV), Amazon (NASDAQ:AMZN), Ford Motors (NYSE:F), Amazon (AMZN) and Starbucks (NASDAQ:SBUX). The economic calendar includes the January jobs report, which could surprise due to the large number of hourly workers who were caught up by Omicron quarantines during the month. The unemployment rate is expected to hold steady at 3.9%. In the energy market, the OPEC+ meeting will be watched closely with supply and demand factors in the spotlight. At the very end of the week, the Winter Olympics in Beijing begin. Earnings Earnings spotlight: Monday, January 31 NXP Semiconductors (NASDAQ:NXPI), Cirrus Logic (NASDAQ:CRUS) and Harmonic (NASDAQ:HLIT). Earnings spotlight: Tuesday, February 1 Exxon Mobil (NYSE:XOM), UBS (NYSE:UBS), UPS (NYSE:UPS), Sirius XM (NASDAQ:SIRI), Alphabet (GOOG), General Motors (NYSE:GM), Starbucks (SBUX), AMD (NASDAQ:AMD), PayPal Holdings (NASDAQ:PYPL), Match Group (NASDAQ:MTCH) and Electronic Arts (NASDAQ:EA). Earnings spotlight: Wednesday, February 2 AmerisourceBergen (NYSE:ABC), Humana (NYSE:HUM), AbbVie (ABBV), Meta Platforms (NASDAQ:FB) T-Mobile US (NASDAQ:TMUS), Spotify (NYSE:SPOT), Facebook (FB), Qualcomm (NASDAQ:QCOM), Spotify (SPOT) and Qualcomm (QCOM). Earnings spotlight: Thursday, February 3 Shell plc (NYSE:RDS.A), Cardinal Health (NYSE:CAH), Cigna (NYSE:CI), Honeywell (NASDAQ:HON), Penn National Gaming (NASDAQ:PENN), Amazon (AMZN), Ford Motor (F), Pinterest (NYSE:PINS), Wynn Resorts (NASDAQ:WYNN), Fortinet (NASDAQ:FTNT), News Corp. (NASDAQ:NWSA), Unity Software (NYSE:U) and Activision Blizzard (NASDAQ:ATVI). Earnings spotlight: Friday, February 4 Bristol-Myers (NYSE:BMY), Eaton (NYSE:ETN) and CBOE Global Markets (BATS:CBOE). Featured Get to know 'inverse bubble' stocks While growth stocks sputter, a select group of stocks is looking very compelling. Louis Stevens and the team at Beating the Market believe the best is yet to come for a small group of companies forming what he calls 'inverse bubbles'. These stocks are set to disrupt a host of key industries, handing them the chance of seeing significant gains over the next few years. Check out this free webinar to hear Louis discuss his research and present two stocks worth putting on your watchlist right away.

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IPOs

IPO watch: No IPOs are on the calendar for next week as the market cools off a bit. Analyst research will open up on Amylyx Pharmaceuticals (NASDAQ:AMLX), CinCor Pharma (NASDAQ:CINC), Hour Loop(NASDAQ:HOUR) and Vigil Neuroscience (NASDAQ:VIGL) on February 1. IPO lockup expirations of note this week include Compass Therapeutics (NASDAQ:CMPX) and IDW Media Holdings (NYSE:IDW) on January 31; Weber (NYSE:WEBR), European Wax Center (NASDAQ:EWCZ) and Orange County (NASDAQ:OBT) on February 1; as well as Evotec (NASDAQ:EVO) and Adagio Therapeutics (NASDAQ:ADGI) on February 2.

Dividends

Projected dividend increases: Companies expected to boost their quarterly dividend payouts include Old Dominion Freight Line (NASDAQ:ODFL) to $0.25 from $0.20, Cigna Corporation (CI) to $1.20 from $1.00, L3Harris Technologies (NYSE:LHX) to $1.21 from $1.02, Exponent (NASDAQ:EXPO) to $0.23 from $0.20, New York Times (NYSE:NYT) to $0.08 from $0.07, Air Products and Chemicals (NYSE:APD) to $1.68 from $1.50, Trane Technologies (NYSE:TT) to $0.66 from $0.59, Allegion (NYSE:ALLE) to $0.40 from $0.36, Walker & Dunlop (NYSE:WD) to $0.55 from $0.50, Intercontinental (NYSE:ICE) to $0.36 from $0.33 and Corning (NYSE:GLW) to $0.26 from $0.24.

Analysis

Alphabet earnings preview: Analysts expect Alphabet (GOOG) to report revenue of $71.9B for Q4 to mark a 36% jump from last year's level. EPS is seen coming at $27.19. Earnings day risks for Alphabet include the potential for cautious guidance indicating a Q1 revenue deceleration or higher investment spending than anticipated on Cloud, Waymo and AR/VR projects. Bank of America says it is constructive on Alphabet even if there are some guidance hiccups. The firm point to a "reasonable" 13X 2023 core earnings trading multiple looks attractive amid the value bias in the market. The long-term for growing Cloud profits is also highlighted.

Meta Platforms earnings preview: Analysts expect Meta Platforms (FB) to report revenue of $33.4B (+19% Y/Y)for Q4 and EPS of $3.83B (-1.0%). The company will divide its results into its Facebook Reality Labs and Family of Apps segments. Earnings day arrives with Meta shares in a slump after underperforming the S&P 500 Index by a wide margin since Q3 results were spilled. Recent SensorTower data indicates some pressure on Facebook users, but strong growth for Instagram. JPMorgan is positive on FB overall and has it slotted as a top pick for 2022 even with revenue growth forecast to decelerate against tough comparables. "We believe FB is making solid progress against Apple's iOS changes as its tools evolve, strengthen, & gain broader adoption. Our checks suggest FB's efforts to improve performance are gaining traction, particularly around measurement in which FB expected to recover 50%+ of the impact in 4Q," advises the firm. JPMorgan also believe Oculus sales were strong during the holiday season and expects the company to pass its goal of more than ten million active virtual reality units.

MicroStrategy event: The MicroStrategy (NASDAQ:MSTR) World 2022 event next week will include a large focus on Bitcoin use cases for corporations. MicroStrategy (MSTR) CEO Michael Saylor, Block (NYSE:SQ) Jack Dorsey and Silvergate Capital (NYSE:SI) CEO Alan Lane are a few of the notable speakers. Cryptocurrencies have been a slump to begin the year. YTD returns are negative for Bitcoin (BTC-USD) -20.7%, Ethereum (ETH-USD) -31.9%, Cardano (ADA-USD) -22.5%, XRP (XRP-USD) -27.4%, Solana (SOL-USD) -45.9%, Terra (LUNA-USD) -42.9%, Avalanche (AVAX-USD) -38.6% and Polygon (MATIC-USD) -33.4%.

Energy

Eyes on oil: The OPEC+ group meets on February 2 to wide expectations that a decision will be made to stick to a plan to raise output by 400,000 barrels a day in monthly increments. A larger increase is not anticipated because some OPEC members have struggled to increase production due to local capacity issues. On the demand side of the equation, crude oil imports in China are forecast to increase by a much as 7% this year. Oil prices ran up to their highest levels in over seven years on Friday as geopolitical turmoil continues to bubble under the surface.

Events

Corporate events:  CITIC Capital Acquisition Corp. (NYSE:CCAC) shareholders will meet to vote on the SPAC deal to take lidar specialist Quanergy public on January 31. Ocuphire Pharma (NASDAQ:OCUP) will hold its Investor R&D Day 2022 event on the same day. On February 2, LendingTree (NASDAQ:TREE) will hold a virtual analyst and investor event with senior management scheduled to introduce the company's outlook for fiscal year 2022 and update the investment community on the business performance and key strategic priorities. A10 Networks (NYSE:ATEN) will also hold an Investor Day event to discuss long-term strategy. Gain Therapeutics (NASDAQ:GANX) will hold its R&D Day 2022 event on February 4. Also watch Boeing (NYSE:BA) this week with the company in talks with Qatar Airways for a proposed new freighter. A visit to the U.S. by Qatar's Emir could spark an announcement

M&A

M&A tidbits: The walk date for the Nuance Communications (NASDAQ:NUAN)-Microsoft (NASDAQ:MSFT) combination is February 1 with expectations high the deadline will be extended. Shareholders with CyrusOne (NASDAQ:CONE) vote on the KKR buyout on February 2 and NeoPhotonics Corporation (NYSE:NPTN) shareholders vote on the Lumentum (NASDAQ:LITE) acquisition. Playtech (OTC:PYTCF) will be watched closely with the company evaluating a potential breakup plan if shareholders vote down a deal to be sold to Australian rival Aristocrat. Playtech board members are reportedly concerned that a block of Asian investors may vote to stop the sale.

Outlook

Annual meetings: Notable annual general meetings are scheduled for Energizer (NYSE:ENR) on January 31, Aramark (NYSE:ARMK) on February 1, Cerence (NASDAQ:CRNC) on February 2 and Edgewell Personal Care Company (NYSE:EPC) on February 4.

Stocks

Barron's mentions: Wesco International (NYSE:WCC) is profiled favorably as the publication observes that demand for cloud computing, power from renewable sources and electric vehicles, along with more extreme weather events, mean that electrical infrastructure will need extensive investment for years to come. Shares are of Wesco noted to only trade at 11X the consensus 2022 earnings per share mark. Moderna (NASDAQ:MRNA) is also recommended as the company sets up to face down four big pharma giants in the post-pandemic vaccine market. Moderna is expected to have $27.4B in cash by the end of the year that it can use to beef itself up and make up a gap with rivals in infrastructure, personnel, relationships and organizational maturity. A Barron's Rountable of investment managers gathered to talk shop. Some of the stock picks that were mentioned were Dollar Tree (NASDAQ:DLTR), Raytheon Technologies (NYSE:RTX) and Credicorp (NYSE:BAP) and Hercules Capital (NYSE:HTGC).

Sources: EDGAR, Bloomberg, CNBC, Reuters, Renaissance Capital

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