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Big Week Coming Up; Cooper Tire (CTB) Gets Traction with Buyout

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Monday, February 22, 2021

We anticipate a busy week coming up, as the final leg of Q4 earnings season — led by many retail companies and others reporting non-calendar-year quarters — joins a series of economic reports and statements from the Federal Reserve helping detail the narratives of the current economy. Texas finally thaws out from its historic winter storm a week ago, with many citizens still without power or water. Johnson & Johnson (JNJ - Free Report) may see approval for its Covid vaccine this week, and Congress reconvenes to hammer out the long-awaited stimulus package.

Market indexes start the week down following a mixed week, where new all-time highs were tested then released. The Dow looks to open down roughly 150 points from Friday’s close, led by Boeing’s (BA - Free Report) 3% drop on a weekend incident that saw a 777 plane catch fire and drop fuselage on a Denver suburb over the weekend. The plane-making giant had rebounded 46% from its late-October lows as its 737 MAX has come back into use; United Airlines (UAL - Free Report) has gained over 1% in today’s pre-market, even as the FAA forces the grounding of its 777s following the incident.

Case-Shiller home prices come out this week, along with Consumer Confidence, Durable Goods Orders, Personal Income/Spending and Jobless Claims. On top of this, Fed Chair Jay Powell gives testimony to a Senate committee Tuesday and Wednesday this week. Among the considerations market participants will be following closely include whether Powell sees inflation starting to appear in recent economic data. New data for this week may confirm this, as well.

Tuesday will bring us earnings reports from big-box retailers Macy’s (M - Free Report) and Home Depot (HD - Free Report) , NVIDIA (NVDA - Free Report) reports Wednesday, salesforce.com (CRM - Free Report) and Best Buy (BBY - Free Report) are Thursday and Foot Locker (FL - Free Report) is Friday. Many of these leading retailers are lagging indicators on consumer conditions — especially regarding in-store purchases — that will add to consumer economic data we’ll see elsewhere this week.

This morning, Cooper Tire’s earnings miss for the most recent quarter and fiscal year has been eclipsed by its being bought out by Goodyear (GT - Free Report) for $2.8 billion. The deal — mostly cash, with some stock — amounts to $54.34 per share, sending Cooper shares up nearly 19% in early Monday trading. Goodyear, which will claim the #1 market position in tire manufacturing with the deal, is taking a 4% hit in pre-market activity.

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