Week Ahead on Wall Street

By: James Flippin · July 03, 2023 · Reading Time: 3 minutes

Albertsons’ Merger Woes

Albertsons (ACI) — one of the nation’s largest grocery stores — is set to discuss earnings this upcoming Wednesday. One of the main topics of discussion on the call is sure to be the chain’s proposed merger with Kroger (KR) which would create the single largest grocery chain in the US.

This proposed merger has been met with severe backlash by unions, customers, and the Federal Trade Commission. The FTC is investigating how the acquisition could change the grocery market landscape. Albertsons’ Teamsters union has already rejected the $25 billion merger. As of last week, even customers have pushed back, filing suit against the grocery chain on claims the merger will result in fewer stores, less competition, and higher prices.

Nothing is be set in stone until the FTC announces its decision to approve or reject the deal. But investors will nevertheless be on the lookout for an insiders’ perspective on the state of the merger when Albertsons reports on Wednesday. Here’s everything else to look forward to in the week ahead.

Economic News

Today, the ISM manufacturing PMI for‌ June will be released. This metric dipped slightly in May, marking the seventh straight month of contraction in the manufacturing sector.

Tuesday, markets will be closed as companies, consumers, and investors alike push pause to celebrate US Independence Day.

On Wednesday, the minutes from the Federal Open Market Committee will be released. This will give investors more insight into the central bank committee’s stance on rate hikes moving forward. Most policymakers still expect at least two more rate hikes through the end of the year, despite the pause in June.

There will be a flurry of economic reports released Thursday. Among them: ISM services PMI, JOLTS job openings, and the current trade balance. Notably, in April, the US trade deficit widened to a six-month high of $74.6 billion. On top of those, investors will get an update to the 30-year fixed-rate mortgage, which currently sits at 6.75%.

On Friday, the unemployment rate for June will be released. In May, unemployment ticked up to 3.7%, the highest reading since October 2022. Despite hitting a recent high, unemployment still sits near historic lows. It may need to show a more significant rise for the Fed to pivot to more dovish policy decisions.

Earnings Data

Due to the Fourth of July holiday, few companies are expected to report earnings this week.

That said, on Thursday, Levi Strauss & Co (LEVI), the manufacturer of Levi’s jeans, will be one of the few companies this week to offer investors an update on its business. During the call, the legacy clothing maker will likely discuss its sustainability efforts and recent initiative to develop more easily-recyclable jeans.

And, on Friday, Urban One (UONE), a Maryland-based media conglomerate, will report earnings. The largest Black-owned broadcasting company will likely discuss its recent acquisition of several Houston-based radio stations.

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