Good morning and welcome to The Morning Filter. Today, we are discussing some key insights for the week ahead with our Chief US Markets Strategist, Dave Sekera.
Starting with earnings, Constellation Brands is one to watch this week. Over the years, the company has transformed into one of the largest alcoholic beverage companies in the US, with popular brands like Corona and Modelo. This 3-star-rated stock with a wide economic moat is trading at an 8% discount, making it a potential watchlist candidate for any pullbacks.
On the economic front, keep an eye on the nonfarm payrolls report coming out on Friday. With a projected decline in payroll numbers, it will be interesting to see if there is any convergence between establishment and household survey data. Additionally, average hourly earnings will be crucial to monitor for real wage growth indicators.
In terms of recent research, Morningstar is still anticipating a Fed rate cut in September following the expected PCE number. The likelihood of a rate cut increases significantly for the September meeting, indicating potential market shifts.
Turning to recent earnings reports, Carnival Cruise Lines saw solid earnings leading to a stock rally, while General Mills reported sales and volume declines, impacting the stock negatively. Nike faced a significant stock plummet post-earnings, prompting Morningstar to adjust its fair value estimate due to revised forecasts and market conditions.
Looking at new additions to Morningstar’s top investment ideas for the third quarter, ExxonMobil, Fortinet, International Flavors and Fragrances, Baxter International, and Ventas are highlighted. These picks range from undervalued stocks like ExxonMobil and IFF to healthcare-focused REITs like Ventas. Each pick presents unique opportunities based on market conditions and long-term growth prospects.
In summary, with a mix of earnings reports, economic indicators, and investment ideas, the week ahead promises to be dynamic for investors. Stay tuned for more insights and analysis from Morningstar. Have a great holiday!