The Week Ahead (SEA, NKE and LULU; Canada Consumer Price Index, U.S. Interest Rates)

Visible Alpha's analysis suggests that Micron is expected to report a Q2 fiscal 2024 revenue of $5.33 billion, reflecting a rise from both the preceding quarter and the comparable quarter in 2023.

The company is also forecasted to see a smaller loss of $275.81 million, or 26 cents per share, which is a significant improvement from the previous year's $2.08 billion, or $1.91 per share loss. These projections are in line with Micron's own guidance for the quarter.

Following a mixed performance in its prior quarter, Nike CFO Matthew Friend characterized the company's financial results as a turning point toward driving more profitable growth. Looking ahead to a softer second-half revenue outlook, Nike remains committed to strong gross margin execution and disciplined cost management.

The stock has a Hold rating from Seeking Alpha's Quant Rating system, reflecting a more cautious stance compared to the consensus Buy rating from Wall Street analysts.

SA analyst Wiebe De Ruyck notes that Nike's valuation remains at a premium, potentially exposing it to downside risk if market confidence in its growth prospects wanes.

Consensus EPS Estimates: $0.76

Consensus Revenue Estimates: $12.29B

Earnings Insight: The company has beaten EPS estimates 7 times in the past 8 quarters and revenue expectations in 6 of those reports.

For the quarter ended January 2024, Lululemon is anticipated to report a year-over-year increase in earnings on higher revenues. The estimate stands at quarterly earnings of $5.01 per share, marking a 13.9% change from the previous year. The company's positive earnings suggest a likely beat of the estimate. It's worth noting that Lululemon has a track record of surpassing estimates, having done so in the last four quarters.

In the US, it's going to be all eyes on the Fed. The CME FedWatch Tool indicates there is more than a 95% probability that the Federal Reserve will maintain current interest rates in its March session. Additionally, the Fed remains steadfast in its commitment to a 2% inflation target before considering reductions in the federal funds rate.

In his March 7 testimony to Congress on the semiannual monetary policy report, Chair Jerome Powell stated, "The Committee anticipates that it will not be appropriate to alter the target range for the federal funds rate until more confidence is secured that inflation is on a consistent path back to 2%."

Speculation centers on whether the Fed will opt for a rate decrease in June, in line with current bond market expectations, and the number of reductions anticipated for 2024. The Fed's dot plots, which graphically represent each official's projections for the economy and interest rates and are updated quarterly, could shed light on potential rate cut timings and magnitudes. While three rate cuts were the median prediction in December, the Fed might scale this down to two due to a robust economy and persistent inflation, indicating to investors that elevated rates may prevail for an extended period.

In Canada, the February CPI print on Tuesday will be watched by the Bank of Canada for more signs of improvement in price pressures. Both headline and core (ex-food and energy) inflation are expected to come in at 3.1% year-over-year with headline up from 2.9% in January on higher energy inflation. Gasoline prices rose by nearly 4% in February from a month ago. Still, a very soft economic backdrop means that price pressures in Canada are more likely to keep easing and narrowing, allowing for a first rate cut from the BoC to also come in June.

Source: CIBC, Trading Economics, RBC, CanadianInsider, Seeking Alpha