Event Highlights: Week of August 17, 2020

This Week’s Major Events

• On Wall Street, the American consumer will be focused on earnings from Home Depot and Walmart on Tuesday and Lowe’s on Wednesday 
• Alibaba earnings on Thursday will provide insights into the Chinese consumer 
• Tesla investors look forward to Friday’s 5:1 split-record date 

Corporate Highlights

Monday, August 17

Earnings season is tapering off as investors look ahead to the fall and back-to-school season in North America, but several key reports take place the week of August 17.

• The week kicks off with international earnings from the Australian commodities juggernaut BHP. BHP’s 2H earnings report should provide insights into the global economy – commodities have surged recently on the heels of rampant central bank stimulus. Gold prices neared $2,100 per ounce of late, a new record. Copper has climbed this year, too. Unfortunately for BHP, coal has still been a weak spot. BHP’s stock price has increased substantially from its March multi-year low, however. 
• From Australia to Israel, three more earnings reports occur Monday. Bezeq, the Israeli Telecom company, Mizrahi in the Financials sector, and the food and beverage company Strauss Group all provide earnings for its second quarter. 
• In the USA, Abbott Labs, Procter & Gamble, and Texas Instruments have dividend payables. 

Tuesday, August 18

• Earnings continue on Tuesday with the Australian biotech company CSL Ltd reporting. CSL is engaged in treating people with rare diseases. Any color on COVID-19 will be interesting to look out for as Australia is seeing a small second wave of cases this month, though the firm has not had major news on a vaccine. 
• Israeli textile manufacturer Delta Galil Industries provides earnings on Tuesday as well. Delta makes undergarments, so this business should be weathering the COVID storm fairly well in the Consumer Staples space. Delta also plans to hold its Board of Directors meeting on Tuesday. 
• On Wall Street, two Dow Jones Industrials blue chips report earnings before the bell. Home Depot and Walmart. Together, these two reports will provide insight into the state of the US consumer ahead of the school year.  
  • Consumer spending on home improvement projects has been very high due to the pandemic – American homeowners have been taking on do-it-yourself projects. Walmart was a beneficiary of lockdown orders with its massive grocery business and significant online presence.. The earnings season beat rate has been tremendous in the USA this quarter – the best in at least 20 years – despite the massive year-on-year earnings decline for the S&P 500. Another theme during the most recent quarter was companies suspending forward guidance – both Home Depot and Walmart were among said firms who either withdrew or suspended 2020 outlooks. 
  • Same-store-sales are a vital consumer metric. Home Depot and Walmart will provide SSS figures for Q2 along with the earnings reports.
  • Germany’s Bankhaus Lampe holds a Financials conference online on Tuesday and Wednesday. It’s been a rough go of it for the German banking sector in the last several years with declining interest rates and heavy regulation.
  • On a lighter note, grab a bucket of popcorn as Comcast plans to release Emperor on Tuesday.

Wednesday, August 19

• More Israeli earnings are on tap Wednesday with Azriele Group, a real estate holding company, reporting its Q2 results. It was likely a tough first half of the year for the developer and manager of shopping malls and office space in Israel.
• In the States, Lowe’s and Nvidia report Q2 earnings. Lowe’s follows Monday’s Home Depot report. Together, portfolio managers will have a much better sense of the American consumer after these Consumer Discretionary companies report. Lowe’s will also report same-store-sales figures. Nvidia’s stock price has been on fire over the last year, climbing from $150 per share to above $450. The Information Technology company will have a lot to live up to during its quarterly report after the bell on Wednesday.
• Portfolio managers eyeing their cash flows should note a dividend payable from Samsung Electronics on Wednesday, a dividend receivable date from Chevron & Walgreens, and Microsoft trades without its quarterly dividend Wednesday morning.
• Following Tuesday’s Comcast video release, Netflix releases the thriller Crimenes de Familia.

Thursday, August 20

• Perhaps the earnings highlight of the week will be from Alibaba on Thursday morning.
  • Asset managers should closely analyze this report out of the Chinese retail giant. China remains center stage on so many fronts – the trade war, COVID-19, an improving economy from the springtime lows. Its stock price has recovered well above the January 2020 (pre-COVID) highs. Like US online retail, Alibaba should be benefitting from the trend away from brick and mortar to online shopping. A specific metric that analysts will scrutinize is how Alipay is doing – Alibaba’s electronic payment system – it’s the Chinese Paypal and the world’s largest mobile payment service platform.
  • Also in China, the Financial life insurance group AIA Group reports H1 2020 earnings and holds its Board of Directors meeting. AIA is Asia’s largest life insurance group, so the company may have updates on the mortality situation with COVID-19 and other trends.
  • In the USA, Caterpillar stockholders will be paid a quarterly dividend of $1.03.

Friday, August 21

• Tesla traders need to mark Friday on their calendars since it is the 5:1 stock split record date.
  • While the split of course has no operating impact, the share count and price change will undoubtedly receive fanfare across the financial news outlets. Investors must own Tesla shares on Friday, August 21, then the stock will first trade after the split on Monday, August 31.
  • But before the Tesla hoopla, international investors will look for news out of Naspers Ltd early on Friday at the company’s shareholder meeting. Naspers operates internet and video entertainment around the world. Once again, this is another space that should be a net beneficiary from the ‘new normal’ of online activity.
  • Income managers should be aware of Starbucks’ dividend payable date Friday morning.
  • To wrap-up the week on a fun note, video releases drop from three major US media companies; AT&T, Amazon, and Netflix. Respectively, the titles are Inception (Limited), Chemical Hearts, and The Sleepover. Despite AMC announcing plans to open more than 100 theaters starting August 20, online entertainment may be here to stay.