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The new year will start off with a flurry of economic releases to test the nine-week streak of market gains. During a holiday-shortened week, investors will have an update on construction spending, manufacturing PMI numbers, the release of the minutes from the last Fed meeting, and the December jobs report fall in their laps. The nonfarm payrolls report is expected to show that the U.S. economy added 155K jobs in December, while the unemployment rate is forecast to rise slightly to 3.8%. Average hourly earnings are anticipated to cool to a month-over-month pace of +0.3%. The first major companies to report earnings in 2024 will include Walgreens Boots Alliance (WBA), Constellation Brands (STZ), and Cal-Maine Foods (NASDAQ:CALM). Tesla (NASDAQ:TSLA) will disclose Q4 deliveries in a report that could create a jolt in the electric vehicle sector.
Earnings spotlight: Wednesday, January 3 – UniFirst (UNF), Cal-Maine Foods (CALM), and Simulations Plus (SLP).
Earnings spotlight: Thursday, January 4 – Conagra Brands (CAG), Lamb Weston (LW), Walgreens Boots Alliance (WBA), Simply Good Foods (SMPL), and Lindsay (LNN).
Earnings spotlight: Friday, January 5 – Constellation Brands (STZ) and Greenbrier (GBX).
Volatility watch: Options trading volume is high again on Spirit Airlines (SAVE) as traders wait on the result of the Department of Justice trial on blocking the merger with JetBlue Airways (JBLU). Sirius XM Holdings (SIRI) and Big Lots (BIG) both have an elevated level of short positions on them. The most overbought stocks per their 14-day relative strength index are Snap (SNAP), Impact Fusion International (OTCPK:IFUS), and MBIA (MBI). The most oversold stocks per their 14-day Relative Strength Index are reAlpha Tech (AIRE), Ventyx Bio (VTYX), and Talon Metals (OTCPK:TLOFF). Gold stocks Newmont (NEWM), Barrick Gold (GOLD), Franco-Nevada (FNV), Coeur Mining (CDE), New Gold (NGD), Gold Fields Limited (GFI), Sibanye Stillwater Limited (SBSW), and i-80 Gold Corp. (IAUX) are some of the sector names on watch for more volatility.
Data reports: Key reports expected out in the first few days of the month include the monthly Macau gross gaming revenue report, updates from Chinese automakers on monthly deliveries, quarterly sales/deliveries reports from General Motors (GM), Ford Motor (F), Toyota (TM), Honda (HMC), and Tesla (TSLA). Costco (COST) is expected to release its December monthly sales reports.
Federal Reserve watch: The FOMC minutes release will be closely dissected after the market reacted positively as Federal Reserve Chairman Jay Powell signaled an openness to rate cut discussions during the post-meeting press conference. Bank of America expects the minutes to show that the Fed has taken signals from the incoming data on activity, labor markets and inflation about the ability of the U.S. economy to experience disinflation without significant demand destruction. “While we expect the minutes to express the view that additional rate hikes have not been ruled out, we look for the minutes to also show concern about leaving the policy rate elevated in an environment of falling inflation,” previewed BofA. At the time of publication, futures trading implied a 73% probability of a 25-point rate cut at the March 20 FOMC meeting and a 12% probability of a 50-point cut.
IPO watch: A number of high-profile IPOs could fire off in 2024. Florida-based Fanatics (FANA) is expected to come to the public market after making several acquisitions in the past couple of years, including Topps trading cards and clothing brand Mitchell & Ness. Fanatics is best known for the exclusive licensing deals it has with the NFL, NHL, NBA, MLB and colleges and universities to make and sell official team merchandise. The company is also expected to make an even strong push into sports betting after acquiring the U.S. assets of PointsBet (OTCQX:PBTHF) for $150M.
Fast-fashion Shein has already confidentially filed for an initial public offering in the U.S. The IPO is expected to occur next year and aims to achieve a $90B valuation, which is higher than the current market caps for e-commerce players such as MercadoLibre (MELI), JD.com (JD), Coupang (CPNG), and eBay (EBAY). Reddit (REDDIT) selected banks back in March 2022 to help it prepare for an IPO, but was sidelined by the Federal Reserve’s rate hikes and risk-off market sentiment that followed. The social news aggregator company earned a valuation of $10B last August after raising more than $400M in funding from Fidelity and others.
Clothing brand SKIMS is in discussions to go public. The company – co-founded by Kim Kardashian, Emma Grede and Jens Grede – was valued earlier in the year at $4B during a Series C funding round. In addition to shapewear, Skims has released many different collections in loungewear, lingerie and accessories including bras, underwear, bodysuits, dresses, shorts, sweatpants, tops, hoodies, sweaters and slides.
Panera could shake up the restaurant sector after confidentially filing for an initial public offering. Sources indicate that the restaurant chain tried to sell itself via a continuation fund earlier this year, but could not get the support, and eventually had to lay off 17% of its workforce to streamline operations and boost performance before a public listing.
Other potential IPOs in 2024 that could create buzz include public debuts for SpaceX (SPACE), Impossible Foods (IMPF), Databricks, Sygenta Group, CVC Capital Partners, Chime, Klarna, Stripe, Cerebras Systems, SeatGeek, ServiceTitan, and Discord.
Event schedule: The corporate calendar is light, with only a few events standing out. The Goldman Sachs Energy, CleanTech & Utilities Conference will feature presentations from California Resources Corporation (CRC), EOG Resources (EOG), MYR Group (MYRG), Nextracker (NXT), Phillips (PSX), SolarEdge Technologies (SEDG), Expro Group (XPRO). Top execs from Merck (MRK) and Bristol-Myers Squibb (BMY) will participate in the Goldman Sachs Healthcare C-Suite Unscripted Conference. Zscaler (ZS) is scheduled to hold its annual meeting.
