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Jobs Report Could Seal Fed Taper, Tesla, GM Events On Tap: Action Plan

Here’s your Investing Action Plan: what you need to know as an investor for the coming week.




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Stocks To Watch

With the stock market in a correction, investors should look for stocks that are holding up relatively well, because they could be leaders in the next rally. Datadog (DDOG), Nasdaq (NDAQ), Horizon Therapeutics (HZNP), Palo Alto Networks (PANW) and Netflix (NFLX) all have relative strength lines at or near highs, reflecting their outperformance vs. the S&P 500. Netflix arguably is in a buy zone. Horizon and Nasdaq are near buy points. But investors should be cautious about making any buys.

Jobs Report

The bar has been lowered for next Friday’s jobs report out at 8:30 a.m. ET. Fed Chair Jerome Powell said at his Sept. 22 press conference that the “substantial further progress” test for tapering asset purchases has been “all but met.” That means September’s jobs report would have to be a real stinker — maybe on par with August’s 235,000 job gain — to delay a taper announcement with the Nov. 3 Fed policy statement. Payroll gains in June and July had averaged 1 million. There have been a few indications that the September report won’t be great. Homebase data shows the small businesses using its scheduling app saw employment fall through the midmonth employment survey. JPMorgan analysts predict 330,000 new jobs. Beyond the taper, the jobs report may begin to resolve a key question about the labor market: namely, how big of a factor were pandemic unemployment benefits in keeping workers on the sideline. If labor force participation jumps, that could point to an easing of wage pressures in the coming months and a cooling of inflation.

OPEC Meeting

OPEC and top nonmembers like Russia will meet virtually Monday to discuss increasing output cuts. Analysts say that another 400,000-barrel-per-day increase won’t be enough to meet growing demand as energy shortages related to natural gas in the U.K. and coal in China are expected to spill over into crude markets. The Biden administration has called on OPEC+ to boost production, but the group could take a more cautious production approach to prevent a supply overhang in the future. Crude oil prices are near multiyear highs.

Tesla Events, FSD Beta Launch

Tesla (TSLA) will hold its annual shareholder meeting on Oct. 7 at its Austin, Texas, factory. On Oct. 9, it’ll hold an event at its plant outside Berlin. Those events could drop hints on when Tesla will begin producing cars from those sites, significantly boosting capacity. Meanwhile, Tesla plans to begin opening FSD Beta to more Full Self-Driving owners and subscribers as of Oct. 8.

GM To Tout EVs, Self-Driving Cars

General Motors (GM) will hold an investor day on Oct. 6, which is expected to focus on GM’s strategy for connected, autonomous and electric vehicles. GM could also update investors on the financial impact of the global chip shortage, which has idled factories and overshadowed GM’s ambitious shift away from gas and diesel cars. By 2035, GM aims to produce only electric vehicles. These include 30 new plug-in models arriving by 2025, on the back of an upgraded $35 billion investment. In September, GM again cut production due to the auto chip shortage. But thus far, CEO Mary Barra has insisted that the crisis will not affect GM’s upcoming rollout of all-electric vehicles. At the same time, the No. 1 U.S. auto giant has suffered a reputational blow from recalls of its current EV model, the Chevy Bolt, due to battery fire risk. Meanwhile, Ford (F) is making a bigger push to dominate an electric future.

Looser Fits Lift Levi’s?

Levi Strauss & Co. (LEVI) reports third-quarter earnings on Wednesday. Wall Street expects earnings per share of 37 cents, a more than fourfold increase for the iconic jeans maker. Sales were expected to climb 37% to $1.461 billion. Levi raised its full-year outlook in July, after seeing what it called “strong denim and casualization trends” and gains in looser-fitting apparel as the Covid-19 pandemic kept many people at home.

In Brief

  • Lamb Weston (LW), an S&P 500 potato products producer, is expected to report that fiscal Q1 EPS declined 34% to 40 cents on Thursday. Revenue is seen rising nearly 15% to $1.02 billion.
  • Acuity Brands (AYI) will report fiscal Q4 results early Wednesday. The smart lighting company’s earnings are seen climbing 22% to $2.87 per share, with sales up 8% to $966 million.
  • PepsiCo (PEP) reports its third-quarter earnings on Tuesday. Wall Street expects the beverage and snack giant to earn $1.73 per share, up 4%, on revenue of $19.39 billion, up 7%.
  • Constellation Brands (STZ) reports fiscal second-quarter earnings on Wednesday. Wall Street expects the maker of beer and wine to report earnings per share of $2.79, up 1%, as sales rise 2% to $2.302 billion.
  • ConAgra (CAG) reports fiscal first-quarter earnings on Thursday. The packaged-foods giant is seen earning 48 cents per share, a 31% drop, as sales fall 6% to $2.523 billion.
  • Tilray (TLRY) reports fiscal first-quarter results on Thursday. Wall Street sees the Canadian cannabis producer losing six cents per share, on revenue of $174.2 million.

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