Will Retail Investors Respond to Week’s Earnings Reports, Proxy Battles?
Activist investor Nelson Peltz’s disclosure Monday that he has launched a proxy fight for a seat on the board of consumer products giant Procter & Gamble and a spate of corporate earnings has revved up optimism of retail interest in stock investing for the week.
Peltz’ Trian Fund Management has about a $3.3 billion stake in the maker of Tide detergent, Gillette razors and other big brands is arguing for a shakeup after years of what he contends is underperformance relative to P&G’s peers. The Cincinnati-based company, which has a market cap of $225 billion, has argued against Pelz’ efforts.
The billionaire investor’s public proxy fight is unusual for him, since Trian typically lobbies quietly for changes at big companies. Proxy fights, of course, take months to resolve and often settle quietly before shareholders are asked to vote.
Earnings season kicks into high gear this week with big names such as Netflix scheduled to report after the market closes on Monday, Bank of America and Goldman Sachs reporting Tuesday pre-market and Morgan Stanley filing early Wednesday morning.
Netflix shareholders will be focused on whether the fast-growing video streaming company that has been spending billions to develop its own content,can maintain the torrid pace of its subscriber growth.
Bank investors’ expectations are mixed, given that JPMorgan Chase last week reported better-than-expected earnings but lower-than-anticipated trading results and net interest margins.
Defense contractor Lockheed Martin also reports Tuesday, giving Wall Street another chance to evaluate the Trump effect on individual companies. The President has used his bully pulpit, via Twitter and otherwise, to criticized Lockheed and Boeing for cost overruns on government contracts. Investors will also be scrutining Microsoft’s earnings on Wednesday to assess how the software giant is faring in the red-hot cloud computing sector.