US Futures are slightly ahead on Tuesday morning AEST, after a solid week of corkers for the indices.

The Nasdaq Composite, laden with tech as it is, closed out the week 4.1% stronger, while the S&P 500 climbed 3.6% and the Dow 2.7%.

Stock markets have been upwardly, optimistically volatile with a risk-on posture with one eye on the September 21 meeting of the Federal Reserve, where the central bank is expected to deliver its third consecutive 0.75 percentage point rate hike in an effort to combat high inflation.

Wall Street investors had been looking tea-leaf-wards for signals on the size of future rate hikes hoping hard they might become softer as inflation eases off.

The Fed Chair Jerome Powell last week waxed lyrical again about his strong commitment to bringing down inflation. The street is pricing in a circa 90% chance of 75 basis points, leaving a 10% possibility of the increase being only 50 basis points.

What the Fed decides may ultimately be determined by inflation-related data due to come out on September 13 Stateside. With the earnings season all but a distant memory, there are few catalysts to drive stocks higher other than the twitchy, pro-risk itch in some of this investor sentiment.

Overnight software giant Oracle has came up short on quarterly profit, but its revenue met expectations.

Via Google Finance

 

After securing its US$30bn acquisition of health-software player Cerner, Oracle saw quarterly revenue of US$11.45bn exactly meet analyst forecasts.

Oracle stock is down about 15% in 2022 and 20% over the past year.

Brokers at Guggenheim initiated coverage with a Buy rating earlier this year and a US$107 price target. Trading at US$77.08 a pop, my math says there’s close to 40% upside hidden in the business.

Having said that Oracle is up against some deep pockets. Amazon’s (NASDAQ:AMZN) AWS and Microsoft’s (NASDAQ:MSFT) Azure are the biggest names in the cloud, and while Oracle looks set to nibble at that market share, it will need to continue its enterprise digital transformations to keep up with the pace-setters.

 

Meanwhile, on Elon Time:

 

That’s nice.

A lot’s happening here, as ever.

Overnight Reuters is reporting that most of Twitter’s shareholders have voted in favour of the $US44 billion sale to Elon Musk, with enough investors already showing their hand “for the outcome to be certain,” according to unidentified sources.

But let us recap.

Last week, lawyers for Elon said Twitter didn’t ask for Elon’s OK before coughing up $US7.75 million to tech-whistleblower Peiter Zatko, ruining the deal Elon wants out of.

Last night, lawyers for Twitter said Musk’s reasons for wanting to back out of the deal were “invalid and wrongful”.

And his lawyers violated the merger agreement, which restricts when Twitter could make such payments.

Musk says Twitter violated the  agreement, while he says he was misled over the spam accounts on the platform – he was in the dark about heaps of stuff, especially how Twitter got a lot cheaper after he made the over-priced $US54.20-per-share offer, signed in April.

Twitter shares have done well, but are around $US40.50.

The two Twitter twins are due in court next month.

 

The week in Macro America…

Just quickly, there’s a bit of market-driving data ahead in the States this week:

  • Tonight, our time, the US Bureau of Labour stats is delivering the August update to its Consumer Price Index (CPI), providing the latest read on consumer inflation.
  • There’s the Producer Price Index (PPI), tracking inflation from the standpoint of businesses, to follow tout suite.
  • The US Census Bureau has August retail sales figures on their Thursday, a good gauge of the strength of consumer spending.
  • The Uni of Michigan has its preliminary September reading of its Consumer Sentiment Index (MCSI) on Friday, an important update on US consumer confidence.
  • Monthly GDP and inflation figures for the mourning UK will be released (on Monday and Wednesday respectively), tracking July and August.

 

Just for you, a couple of this week’s NASDAQ highlights…

And Starbucks (NASDAQ: ABUX) –  uh-huh, remember Starbucks!? – well, they have a big investor day, (later tonight for Aussie).

UBS reckons an investor ho-down like this could be a positive catalyst given the optimistic buzz around  commentary and outlook, potential for better-than-anticipated long-term growth targets, and removal of the overhang from store and customer investment.

UBS believes that SBUX is well positioned to expand operating margins from an estimated ~15% in FY22 to 16-17% over the coming years.

Via Google Finance

Ok. The thinking at the investment bank is from the above “depressed levels”  SBUX could target growth greater than the prior 10-12% EPS Growth guidance & closer to mid-teens over the next few years (UBS estimate 16% 3-yr EPS CAGR to 2023), before reverting to low double digits.

Alongside McDonald’s, SBUX in the POV of UBS analysts is one of the edible industry’s top brands in terms of patronage and customer loyalty.

Starbucks continues to see strong growth from menu innovation (it’s a thing), especially in cold espresso and plant-based products, which are two of the brand’s fastest-growing categories.

And last quarter, cold drinks alone accounted for 75% of total beverage sales.

As at Q3, the Starbucks Rewards program had around 27 million active members, accounting for 53% of US company-owned sales.

Then there’s the “significant tech investments focused on strengthening customer engagement and store-level profitability”, with UBS saying digital investments have been among the company’s highest returns.

And on Thursday, the street is largely backing the software maker Adobe Inc (NASDAQ:ADBE) to earn $3.35 per share on revenue of exactly $4.44 billion.

This compares to the year-ago quarter when earnings came to $3.11 per share on revenue of $3.94 billion.

Via Google Finance

The company has, however, delivered some strong earnings over Q2, like the headline record revenue of $4.4bn, which beat the pants off analyst expectations.

Adobe shares have been punished amid the recent correction in technology stocks. This is despite the company benefiting from the secular digitisation hoo-haa which is winning friends and influencing investors. Also, back in June, Adobe cut revenue forecasts on currency shifts and the end of business in Russia and Belarus and with more than 40% of its sales outside the Americas, the hit is US$175 million in 2H.

There’s upside, though, for enthusiastic investors with a little cash on the side – ADBE stock is down by almost a full third, YTD and well over 40% since this time last year. As a comparison the S&P 500 index has fallen just 11% in 12 months.

While some analysts have lauded its impressive execution, the brokers at Mizuho overnight downgraded ADBE to Neutral from Buy, also trimming the price target to $440 per share from $480.