Inflation and interest rates are set to dominate the market agenda again in the coming week, after US government data showed last Friday that price pressures have not abated over the past week. of May.
US inflation accelerated to its highest level in 40 years last month, a sign that these price pressures are taking root in the economy, pushing the Federal Reserve to extend an aggressive series of interest rate hikes. ‘interest.
The Fed is expected to hike the fed funds rate by half a point and again next month, but last Friday’s consumer price inflation report fueled speculation that the politicians could justify a larger increase.
Stocks reacted negatively after the CPI release, with the index falling 5.1% over the week. Amid renewed concerns about inflation and the stance of US monetary policy, here are three stocks we’ll be watching closely over the coming week:
Electric vehicle maker Tesla (NASDAQ:) expects to seek shareholder approval of its plan to split shares in three, which is expected to take place at its annual general meeting in August. The electric vehicle manufacturer would thus become the latest technology giant to carry out such an operation in order to broaden its appeal to investors.
The proposed split comes amid a steep decline in Tesla, which has seen its shares underperform broader markets. The stock has lost nearly 35% this year, compared to an 18% decline for the S&P 500. Tesla stock closed Friday at $696.69.
If approved, it will be Tesla’s second stock split in less than two years. The company executed a five-for-one stock split in 2020, which resulted in a 60% rise in the share price from the day of the announcement to the date of execution.
Last Monday, Amazon (NASDAQ:) stock began trading after a 20-to-1 split. Since 1980, S&P 500 companies that announced stock splits have significantly outperformed the index. three, six and twelve months after the initial announcement, according to a Bank of America study conducted by CNBC.com. According to the bank, stocks that were split rose 25% on average over the next 12 months, compared to 9% for the S&P 500.
Software and infrastructure giant Oracle (NYSE:) will release its fourth quarter fiscal 2022 results on Monday, June 13, after market close. Analysts expect earnings of $1.37 per share on revenue of $11.62 billion.
In March, Austin, Texas-headquartered Oracle issued an optimistic forecast for its cloud computing business, thanks to increased sales of its cloud computing division, which could end the year. tax with a growth rate of around 20%. Total revenue for the last quarter is expected to increase by 5%.
Oracle is working to fuel the growth of its “cloud” division and create a bigger footprint in the growing market, which is led by Amazon, Microsoft (NASDAQ:) and Alphabet’s Google (NASDAQ:). Cloud revenue increased 24% to $2.8 billion during the , which ended on February 28.
Shares of Oracle, which closed Friday at $67.14, have fallen 23% this year amid a broad selloff in tech stocks.
Adobe Systems (NASDAQ:) will report its second quarter fiscal 2022 results on Thursday, June 16 after market close. The maker of Photoshop and other software and infrastructure products is expected to report earnings of $3.31 per share on revenue of $4.35 billion.
San Jose, Calif.-based Adobe, which competes with Salesforce.com (NYSE:) in the marketing and e-commerce technology segment, is trying to drive growth by expanding its business offerings while bolstering its core business of authoring software.
In , Adobe reported a disappointing outlook for the past quarter, suggesting increased competition is weighing on its leading creative software.
Adobe is revising the pricing of its flagship creative suite, the first major overhaul since 2017, according to chief executive Shantanu Narayen. The new structure will reflect features Adobe has added over the past five years. The impact should be felt on sales in the second half of the year.
Adobe stock, which closed Friday at $393.84, has fallen about 30% this year.