Today is Monday, August 16, 2021.
What To Expect With Retail Earnings This Week
This week’s earnings announcements will be dominated by major players in the retail sector, including Walmart (NYSE: WMT), Home Depot (NYSE: HD), Target (NYSE: TGT), Lowe's Companies (NYSE: LOW), TJX Companies (NYSE: TJX), Macy’s (NYSE: M), Kohl’s Corporation (NYSE: KSS), Ross Stores (Nasdaq: ROST), BJs Wholesale Club Holdings (NYSE: BJ), Petco (Nasdaq: WOOF), and Foot Locker (NYSE: FL).
Pandemic Impact: Analysts expect retailers to report earnings that are better than pre-pandemic levels. It will be interesting to see how some of the big box retailers, such as Walmart and Target, perform against more niche retailers, such as Petco.
Consumer Sentiment: A new report found that U.S. consumer sentiment recently decreased. How will this impact future guidance?
Shortages: Between a shortage of workers and a shortage of goods, how have retailers performed in the past quarter?
Higher Prices: Recent inflation may have also impacted retail prices, which could have impacted the bottom line for retailers.
Final Thoughts: Analysts have high expectations for larger retailers. Can retailers live up to those expectations?
Notable Earnings Today: Fabrinet (NYSE: FN), Paysafe (NYSE: PSFE), Tencent Music Entertainment Group (NYSE: TME).
Notable IPOs Today: FinTech Acquisition Corp. VI (Nasdaq: FTVI).
Notable Equity Crowdfunding Campaigns Ending Today: Imee’s Kitchen (MainVest), SideStream (MicroVentures), Dick & Jane’s Bar (MainVest), Earth, Wind & Books (MainVest).
Notable Economic Events Today: Empire State manufacturing index (8:30 a.m.).
Inside the Growing Popularity of Direct Indexing
Direct Indexing, in which investors develop a custom portfolio that replicates the performance of an index fund by owning some of the underlying assets of the index, has gone mainstream in recent years.
History: Institutional investors have had access to direct indexing for decades. Both asset managers and robo-advisors have started to introduce it as an option to all investors for the past few years.
Gaining Steam: There are several factors driving the adoption of direct indexing:
- New technological innovations allow investors to construct a portfolio with advanced algorithms.
- Trading fees are lower for retail investors, including those who already buy fractional shares.
- There’s a growing demand among investors for customization and for alternative opportunities.
For Who: Direct indexing is a good option for investors interested in tax-loss harvesting. The ability to customize a portfolio is also useful for investors who favor ESG (environmental, social, and governance) factors.
Final Thoughts: In the past year or so, large financial institutions such as Vanguard and Morgan Stanley have acquired fintech upstarts that offer direct indexing.
Why Cardano Jumped in Value This Week
Prices for cryptocurrency Cardano, which is a public blockchain platform, increased from $1.41 to $2.16 in a week.
History: Launched in 2017, Cardano has emerged as one of the most valuable cryptocurrencies. Its price has increased by more than 10 times this past year.
Upgrade: Last week, Cardano’s chief developer revealed that the platform would undergo something called an “Alonzo” upgrade that would enable smart-contract functionality.
Bigger Picture: This upgrade could allow Cardano to incorporate more applications, thus increasing access for the public.
Disadvantage: Cardano still has a lot of catching up to do in the crypto world. It’s mostly used by startups, so the smart-contract functionality might allow for wider adoption.
Final Thoughts: Investors need to determine if the smart-contract functionality has already been priced into Cardano.
Robot Success: Small Robot Company Secures £3.4M+ from 1974 Investors via Crowdcube (Crowdfund Insider)
Here’s Turmoil: What The Afghan Government Collapse Could Mean For The US Stock Market? (MarketWatch)
Not Good: China economy under pressure as factory output, retail sales growth slow sharply (Reuters)
Luxurious: Hyatt to Acquire Apple Leisure Group (Business Wire)
Hope is Still Alive: Japan ekes out economic growth in recovery from pandemic (Associated Press)
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