Traffic continues to rebound at BHM

Passenger traffic at Birmingham Shuttlesworth International Airport continued its climb back in April......»»

Category: topSource: bizjournalsMay 12th, 2021

Traffic continues to rebound at BHM

Passenger traffic at Birmingham Shuttlesworth International Airport continued its climb back in April......»»

Category: topSource: bizjournalsMay 12th, 2021

Guess (GES) Down 6.9% Since Last Earnings Report: Can It Rebound?

Guess (GES) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. It has been about a month since the last earnings report for Guess (GES). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Guess due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Guess? Earnings Beat Estimates in Q2, Sales IncreaseGuess? reported second-quarter fiscal earnings of 96 cents per share. The metric surpassed the Zacks Consensus Estimate of 68 cents. The company reported an adjusted loss of a cent in the year-ago quarter. In the reported quarter, share repurchases had a positive impact of 3 cents and currency rate had minimal impact on the bottom line.Adjusted earnings surged 152.6% from 38 cents reported in the second quarter of fiscal 2020. This includes positive impacts from share repurchases worth 13 cents, while currency rate had minimal impacts.Net revenues amounted to $628.6 million, which missed the consensus mark of $639.5 million. The metric went up 57.7% from $398.5 million reported in the year-ago quarter. On a constant-currency (cc) basis, net revenues surged 51.1% year over year. The upside can be attributed to sales momentum across all regions, other than Asia.  Revenues from products sales as well as royalties reflected growth.The company’s net revenues declined 8% from $683.2 million reported in second-quarter fiscal 2020. The downside was caused by permanent store closures worth nearly 5% as well as the shift of European wholesale shipments into the third quarter. Management highlighted that capacity restrictions and lower demand were other headwinds.The company’s gross margin expanded to 46.8% from 36.9% reported in the year-ago quarter. As a percentage of sales, SG&A expenses declined to 32.8% from 37.7% reported in the prior-year quarter’s level.During the quarter, adjusted earnings from operations came in at $88.6 million against an adjusted operating loss of $0.9 million posted in the year-ago quarter. Adjusted operating margin came in at 14.1%, up 14.3% year on year on the back of expense leverage. Compared with second-quarter fiscal 2020 levels, adjusted earnings from operations improved 84.9% and adjusted operating margin increased 7.1%.Segment PerformanceRevenues in the Americas Retail segment surged 69% year over year on a reported basis, while it increased 66% at cc. Revenues fell 6% from second-quarter fiscal 2020 levels, mainly due to store closures. Operating margin in the Americas Retail segment came in at 20.4%.Revenues in Americas Wholesale unit rallied 146% (up 137% at cc) year over year. Revenues were up 19% from second quarter fiscal 2020 levels. Operating margin in the segment amounted to 26% compared with 8.3% in the prior-year quarter.The Europe segment’s revenues surged 57% (up 48% at cc) year on year. Revenues fell 5% from second-quarter fiscal 2020 levels, due to pandemic-led traffic declines. Segmental operating margin came in at 15.9% compared with 10.1% in the year-ago quarter.Asia revenues declined 5% (down 10% at cc) year on year. The metric fell 43% from second-quarter fiscal 2020 levels, due to permanent store closures.Licensing revenues advanced 81% year over year. The unit’s revenues were up 18% compared with second-quarter fiscal 2020 levels, driven by strong performance in footwear and perfume. Operating margin came in at 91.9% compared with 94.8% in the year-ago quarter.Other UpdatesThe company exited the quarter with cash and cash equivalents of $458.9 million as well as long-term debt and finance lease obligations of $79.9 million. Stockholders’ equity was $610.3 million. Net cash provided by operating activities for the six months ended Jul 31, 2021 amounted to nearly $43 million, while free cash flow amounted to $18.5 million.COVID-19 UpdateThe pandemic-related disruptions continue to impact the company’s operations, as depicted by decline in revenues in the reported quarter, when compared to second-quarter fiscal 2020. Given the circumstances, the company is continuing to manage expenses prudently to maintain profitability. In the reported quarter, the company opened stores that were closed in first-quarter fiscal 2022 due to pandemic-led restrictions. Accordingly, these stores were closed for approximately 5% of the total days during second-quarter fiscal 2022, mainly in Europe and Canada. As of Jul 31, 2021, 100% of the company’s stores were open.OutlookFor third-quarter fiscal 2022, the company expects revenues to be negative to flat compared with third-quarter fiscal 2020 levels. This indicates that pandemic-led traffic declines will be offset by growth in global e-commerce business and favorable shift of European wholesale shipments.For fiscal 2022, management continues to expect revenues to decline in mid-single digits from fiscal 2020 levels, considering that there will not be any more pandemic-related closures. The company expects operating margin to come in at nearly 10% in fiscal 2022. The view includes expectations of a back-to-normal pace of product development in the European wholesale business.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -6.94% due to these changes.VGM ScoresAt this time, Guess has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Guess has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Time to Invest in Legal Marijuana If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027. After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%. You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.Today, Download Marijuana Moneymakers FREE >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Guess, Inc. (GES): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksSep 24th, 2021

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

Futures Slide Alongside Cryptocurrencies Amid China Crackdown US futures and European stocks fell amid ongoing nerves over the Evergrande default, while cryptocurrency-linked stocks tumbled after the Chinese central bank said such transactions are illegal. Sovereign bond yields fluctuated after an earlier selloff fueled by the prospect of tighter monetary policy. At 745am ET, S&P 500 e-minis were down 19.5 points, or 0.43%, Nasdaq 100 e-minis were down 88.75 points, or 0.58% and Dow e-minis were down 112 points, or 0.33%. In the biggest overnight news, Evergrande offshore creditors remain in limbo and still haven't received their coupon payment effectively starting the 30-day grace period, while also in China, the State Planner issued a notice on the crackdown of cryptocurrency mining, will strictly prohibit financing for new crypto mining projects and strengthen energy consumption controls of new crypto mining projects. Subsequently, the PBoC issued a notice to further prevent and dispose of the risks from speculating on cryptocurrencies, to strengthen monitoring of risks from crypto trading and such activities are illegal. The news sent the crypto space tumbling as much as 8% while cryptocurrency-exposed stocks slumped in U.S. premarket trading. Marathon Digital (MARA) drops 6.5%, Bit Digital (BTBT) declines 4.7%, Riot Blockchain (RIOT) -5.9%, Coinbase -2.8%. Big banks including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp slipped about 0.5%, while oil majors Exxon Mobil and Chevron Corp were down 0.4% and 0.3%, respectively, in premarket trading.Mega-cap FAAMG tech giants fell between 0.5% and 0.6%. Nike shed 4.6% after the sportswear maker cut its fiscal 2022 sales expectations and warned of delays during the holiday shopping season. Several analysts lowered their price targets on the maker of sports apparel and sneakers after the company cut its FY revenue growth guidance to mid-single- digits. Here are some of the biggest U.S. movers today: Helbiz (HLBZ) falls 10% after the micromobility company filed with the SEC for the sale of as many as 11m shares by stockholders. Focus Universal (FCUV), an online marketing company that’s been a favorite of retail traders, surged 26% in premarket trading after the stock was cited on Stocktwits in recent days. Vail Resorts (MTN) falls 2.7% in postmarket trading after its full-year forecasts for Ebitda and net income missed at the midpoint. GlycoMimetics (GLYC) jumps 15% postmarket after announcing that efficacy and safety data from a Phase 1/2 study of uproleselan in patients with acute myeloid leukemia were published in the journal Blood on Sept. 16. VTV Therapeutics (VTVT) surges 30% after company says its HPP737 psoriasis treatment showed favorable safety and tolerability profile in a multiple ascending dose study. Fears about a sooner-than-expected tapering amid signs of stalling U.S. economic growth and concerns over a spillover from China Evergrande’s default had rattled investors in September, putting the benchmark S&P 500 index on course to snap a seven-month winning streak. Elaine Stokes, a portfolio manager at Loomis Sayles & Co., told Bloomberg Television, adding that “what they did is tell us that they feel really good about the economy.” While the bond selloff vindicated Treasury bears who argue yields are too low to reflect fundamentals, others see limits to how high they can go. “We’d expected bond yields to go higher, given the macro situation where growth is still very strong,” Sylvia Sheng, global multi-asset strategist with JPMorgan Asset Management, said on Bloomberg Television. “But we do stress that is a modest view, because we think that upside to yields is still limited from here given that central banks including the Fed are still buying bonds.” Still, Wall Street’s main indexes rallied in the past two session and are set for small weekly gains. European equities dipped at the open but trade off worst levels, with the Euro Stoxx 50 sliding as much as 1.1% before climbing off the lows. France's CAC underperformed at the margin. Retail, financial services are the weakest performers. EQT AB, Europe’s biggest listed private equity firm, fell as much as 8.1% after Sweden’s financial watchdog opened an investigation into suspected market abuse. Here are some of the other biggest European movers today: SMCP shares surge as much as 9.9%, advancing for a 9th session in 10, amid continued hopes the financial troubles of its top shareholder will ultimately lead to a sale TeamViewer climbs much as 4.2% after Bankhaus Metzler initiated coverage with a buy rating, citing the company’s above-market growth AstraZeneca gains as much as 3.6% after its Lynparza drug met the primary endpoint in a prostate cancer trial Darktrace drops as much as 9.2%, paring the stock’s rally over the past few weeks, as a technical pattern triggered a sell signal Adidas and Puma fall as much as 4% and 2.9%, respectively, after U.S. rival Nike’s “large cut” to FY sales guidance, which Jefferies said would “likely hurt” shares of European peers Earlier in the session, Asian stocks rose for a second day, led by rallies in Japan and Taiwan, following U.S. peers higher amid optimism over the Federal Reserve’s bullish economic outlook and fading concerns over widespread contagion from Evergrande. Stocks were muted in China and Hong Kong. India’s S&P BSE Sensex topped the 60,000 level for the first time on Friday on optimism that speedier vaccinations will improve demand for businesses in Asia’s third-largest economy. The MSCI Asia Pacific Index gained as much as 0.7%, with TSMC and Sony the biggest boosts. That trimmed the regional benchmark’s loss for the week to about 1%. Japan’s Nikkei 225 climbed 2.1%, reopening after a holiday, pushing its advance for September to 7.7%, the best among major global gauges. The Asian regional benchmark pared its gain as Hong Kong stocks fell sharply in late afternoon trading amid continued uncertainty, with Evergrande giving no sign of making an interest payment that was due Thursday. Among key upcoming events is the leadership election for Japan’s ruling party next week, which will likely determine the country’s next prime minister. “Investor concerns over the Evergrande issue have retreated a bit for now,” said Hajime Sakai, chief fund manager at Mito Securities Co. in Tokyo. “But investors will have to keep downside risk in the corner of their minds.” Indian stocks rose, pushing the Sensex above 60,000 for the first time ever. Key gauges fell in Singapore, Malaysia and Australia, while the Thai market was closed for a holiday. Treasuries are higher as U.S. trading day begins after rebounding from weekly lows reached during Asia session, adding to Thursday’s losses. The 10-year yield was down 1bp at ~1.42%, just above the 100-DMA breached on Thursday for the first time in three months; it climbed to 1.449% during Asia session, highest since July 6, and remains 5.2bp higher on the week, its fifth straight weekly increase. Several Fed speakers are slated, first since Wednesday’s FOMC commentary set forth a possible taper timeline.  Bunds and gilts recover off cheapest levels, curves bear steepening. USTs bull steepen, richening 1.5bps from the 10y point out. Peripheral spreads are wider. BTP spreads widen 2-3bps to Bunds. In FX, the Bloomberg Dollar Spot Index climbed back from a one-week low as concern about possible contagion from Evergrande added to buying of the greenback based on the Federal Reserve tapering timeline signaled on Wednesday. NZD, AUD and CAD sit at the bottom of the G-10 scoreboard. ZAR and TRY are the weakest in EM FX. The pound fell after its rally on Thursday as investors looked ahead to BOE Governor Andrew Bailey’s sPeech next week about a possible interest-rate hike. Traders are betting that in a contest to raise borrowing costs first, the Bank of England will be the runaway winner over the Federal Reserve. The New Zealand and Aussie dollars led declines among Group-of-10 peers. The euro was trading flat, with a week full of events failing “to generate any clear directional move,” said ING analysts Francesco Pesole and Chris Turner. German IFO sentiment indeces will “provide extra indications about the area’s sentiment as  businesses faced a combination of delta variant concerns and lingering supply disruptions”. The Norwegian krone is the best performing currency among G10 peers this week, with Thursday’s announcement from the Norges Bank offering support In commodities, crude futures hold a narrow range up around best levels for the week. WTI stalls near $73.40, Brent near $77.50. Spot gold extends Asia’s gains, adding $12 on the session to trade near $1,755/oz. Base metals are mixed, LME nickel and aluminum drop ~1%, LME tin outperforms with a 2.8% rally. Bitcoin dips after the PBOC says all crypto-related transactions are illegal. Looking to the day ahead now, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Market Snapshot S&P 500 futures down 0.3% to 4,423.50 STOXX Europe 600 down 0.7% to 464.18 German 10Y yield fell 8.5 bps to -0.236% Euro little changed at $1.1737 MXAP up 0.4% to 201.25 MXAPJ down 0.5% to 643.20 Nikkei up 2.1% to 30,248.81 Topix up 2.3% to 2,090.75 Hang Seng Index down 1.3% to 24,192.16 Shanghai Composite down 0.8% to 3,613.07 Sensex up 0.2% to 60,031.83 Australia S&P/ASX 200 down 0.4% to 7,342.60 Kospi little changed at 3,125.24 Brent Futures up 0.4% to $77.57/bbl Gold spot up 0.7% to $1,755.38 U.S. Dollar Index little changed at 93.14 Top Overnight News from Bloomberg China Evergrande Group’s unusual silence about a dollar-bond interest payment that was due Thursday has put a focus on what might happen during a 30-day grace period. The Reserve Bank of Australia’s inflation target is increasingly out of step with international counterparts and fails to account for structural changes in the country’s economy over the past 30 years, Westpac Banking Corp.’s Bill Evans said. With central banks from Washington to London this week signaling more alarm over faster inflation, the ultra-stimulative path of the euro zone and some of its neighbors appears lonelier than ever. China’s central bank continued to pump liquidity into the financial system on Friday as policy makers sought to avoid contagion stemming from China Evergrande Group spreading to domestic markets. A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed with the region failing to fully sustain the impetus from the positive performance across global counterparts after the silence from Evergrande and lack of coupon payments for its offshore bonds, stirred uncertainty for the company. ASX 200 (-0.4%) was negative as underperformance in mining names and real estate overshadowed the advances in tech and resilience in financials from the higher yield environment. Nikkei 225 (+2.1%) was the biggest gainer overnight as it played catch up to the prior day’s recovery on return from the Autumnal Equinox holiday in Japan and with exporters cheering the recent risk-conducive currency flows, while KOSPI (-0.1%) was lacklustre amid the record daily COVID-19 infections and after North Korea deemed that it was premature to declare that the Korean War was over. Hang Seng (-1.2%) and Shanghai Comp. (-0.8%) were indecisive after further liquidity efforts by the PBoC were offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds but has a 30-day grace period with the Co. remaining quiet on the issue. Finally, 10yr JGBs were lower on spillover selling from global counterparts including the declines in T-notes as the US 10yr yield breached 1.40% for the first time since early-July with the pressure in bonds also stemming from across the Atlantic following a more hawkish BoE, while the presence of the BoJ in the market today for over JPY 1.3tln of government bonds with 1yr-10yr maturities did very little to spur prices. Top Asian News Rivals for Prime Minister Battle on Social Media: Japan Election Asian Stocks Rise for Second Day, Led by Gains in Japan, Taiwan Hong Kong Stocks Still Wagged by Evergrande Tail Hong Kong’s Hang Seng Tech Index Extends Decline to More Than 2% European equities (Stoxx 600 -0.9%) are trading on the back foot in the final trading session of the week amid further advances in global bond yields and a mixed APAC handover. Overnight, saw gains for the Nikkei 225 of 2.1% with the index aided by favourable currency flows, whilst Chinese markets lagged (Shanghai Comp. -0.8%, Hang Seng -1.6%) with further liquidity efforts by the PBoC offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds. As context, despite the losses in Europe today, the Stoxx 600 is still higher by some 1.2% on the week. Stateside, futures are also on a softer footing with the ES down by 0.4% ahead of a busy Fed speaker schedule. Back to Europe, sectors are lower across the board with Retail and Personal & Household Goods lagging peers. The former has been hampered by losses in Adidas (-3.0%) following after hours earnings from Nike (-4.2% pre-market) which saw the Co. cut its revenue guidance amid supply chain woes. AstraZeneca (+2.1%) sits at the top of the FTSE 100 after announcing that the Lynparza PROpel trial met its primary endpoint. Daimler’s (+0.1%) Mercedes-Benz has announced that it will take a 33% stake in a battery cell manufacturing JV with Total and Stellantis. EQT (-6.5%) sits at the foot of the Stoxx 600 after the Swedish FSA announced it will open an investigation into the Co. Top European News EQT Investigated by Sweden’s FSA Over Suspected Market Abuse Gazprom Says Claims of Gas Under-supply to Europe Are ‘Absurd’ German Sept. Ifo Business Confidence 98.8; Est. 99 German Business Index at Five-Month Low in Pre-Election Verdict In FX, the rot seems to have stopped for the Buck in terms of its sharp and marked fall from grace amidst post-FOMC reflection and re-positioning in the financial markets on Thursday. Indeed, the Dollar index has regained some poise to hover above the 93.000 level having recoiled from 93.526 to 92.977 over the course of yesterday’s hectic session that saw the DXY register a marginal new w-t-d high and low at either end of the spectrum. Pre-weekend short covering and consolidation may be giving the Greenback a lift, while the risk backdrop is also less upbeat ahead of a raft of Fed speakers flanking US new home sales data. Elsewhere, the Euro remains relatively sidelined and contained against the Buck with little independent inspiration from the latest German Ifo survey as the business climate deteriorated broadly in line with consensus and current conditions were worse than forecast, but business expectations were better than anticipated. Hence, Eur/Usd is still stuck in a rut and only briefly/fractionally outside 1.1750-00 parameters for the entire week, thus far, as hefty option expiry interest continues to keep the headline pair in check. However, there is significantly less support or gravitational pull at the round number today compared to Thursday as ‘only’ 1.3 bn rolls off vs 4.1 bn, and any upside breach could be capped by 1.1 bn between 1.1765-85. CAD/NZD/AUD - Some payback for the non-US Dollars following their revival, with the Loonie waning from 1.2650+ peaks ahead of Canadian budget balances, though still underpinned by crude as WTI hovers around Usd 73.50/brl and not far from decent option expiries (from 1.2655-50 and 1.2625-30 in 1.4 bn each). Similarly, the Kiwi has faded after climbing to within single digits of 0.7100 in wake of NZ trade data overnight revealing a much wider deficit as exports slowed and imports rose, while the Aussie loses grip of the 0.7300 handle and skirts 1.1 bn option expiries at 0.7275. CHF/GBP/JPY - The Franc is fairly flat and restrained following a dovish SNB policy review that left in lagging somewhat yesterday, with Usd/Chf and Eur/Chf straddling 0.9250 and 1.0850 respectively, in contrast to Sterling that is paring some hawkish BoE momentum, as Cable retreats to retest bids circa 1.3700 and Eur/Gbp bounces from sub-0.8550. Elsewhere, the Yen has not been able to fend off further downside through 110.00 even though Japanese participants have returned to the fray after the Autumn Equinox holiday and reports suggest some COVID-19 restrictions may be lifted in 13 prefectures on a trial basis. SCANDI/EM/PM/CRYPTO - A slight change in the pecking order in Scandi-land as the Nok loses some post-Norges Bank hike impetus and the Sek unwinds a bit of its underperformance, but EM currencies are bearing the brunt of the aforementioned downturn in risk sentiment and firmer Usd, with the Zar hit harder than other as Gold is clings to Usd 1750/oz and Try down to deeper post-CBRT rate cut lows after mixed manufacturing sentiment and cap u readings. Meanwhile, Bitcoin is being shackled by the latest Chinese crackdown on mining and efforts to limit risks from what it describes as unlawful speculative crypto currency trading. In commodities, WTI and Brent are set the conclude the week in the green with gains in excess of 2% for WTI at the time of writing; in-spite of the pressure seen in the complex on Monday and the first-half of Tuesday, where a sub USD 69.50/bbl low was printed. Fresh newsflow has, once again, been limited for the complex and continues to focus on the gas situation. More broadly, no update as of yet on the Evergrande interest payment and by all accounts we appear to have entered the 30-day grace period for this and, assuming catalysts remain slim, updates on this will may well dictate the state-of-play. Schedule wise, the session ahead eyes significant amounts of central bank commentary but from a crude perspective the weekly Baker Hughes rig count will draw attention. On the weather front, Storm Sam has been upgraded to a Hurricane and is expected to rapidly intensify but currently remains someway into the mid-Atlantic. Moving to metals, LME copper is pivoting the unchanged mark after a mixed APAC lead while attention is on Glencore’s CSA copper mine, which it has received an offer for; the site in 2020 produced circa. 46k/T of copper which is typically exported to Asia smelters. Elsewhere, spot gold and silver are firmer but have been very contained and remain well-within overnight ranges thus far. Which sees the yellow metal holding just above the USD 1750/oz mark after a brief foray below the level after the US-close. US Event Calendar 10am: Aug. New Home Sales MoM, est. 1.0%, prior 1.0% 10am: Aug. New Home Sales, est. 715,000, prior 708,000 Central Bank Speakers 8:45am: Fed’s Mester Discusses the Economic Outlook 10am: Powell, Clarida and Bowman Host Fed Listens Event 10:05am: Fed’s George Discusses Economic Outlook 12pm: Fed’s Bostic Discusses Equitable Community Development DB's Jim Reid concludes the overnight wrap WFH today is a bonus as it’s time for the annual ritual at home where the latest, sleekest, shiniest iPhone model arrives in the post and i sheepishly try to justify to my wife when I get home why I need an incremental upgrade. This year to save me from the Spanish Inquisition I’m going to intercept the courier and keep quiet. Problem is that such speed at intercepting the delivery will be logistically challenging as I remain on crutches (5 weeks to go) and can’t grip properly with my left hand due to an ongoing trapped nerve. I’m very glad I’m not a racehorse. Although hopefully I can be put out to pasture in front of the Ryder Cup this weekend. The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred. A hawkish Fed meeting, with the dots increasing and the end of QE potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes. Looking at the specific moves, yields on 10yr Treasuries were up +13.0bps to 1.430% in their biggest daily increase since 25 February, as both higher real rates (+7.9bps) and inflation breakevens (+4.9bps) drove the advance. US 10yr yields had been trading in a c.10bp range for the last month before breaking out higher, though they have been trending higher since dropping as far as 1.17% back in early-August. US 30yr yields rose +13.2bps, which was the biggest one day move in long dated yields since March 17 2020, which was at the onset of the pandemic and just days after the Fed announced it would be starting the current round of QE. The large selloff in US bonds saw the yield curve steepen and the long-end give back roughly half of the FOMC flattening from the day before. The 5y30y curve steepened 3.4bps for a two day move of -3.3bps. However the 2y10y curve steepened +10.5bps, completely reversing the prior day’s flattening (-4.2bps) and leaving the spread at 116bp, the steepest level since first week of July. 10yr gilt yields saw nearly as strong a move (+10.8bps) with those on shorter-dated 2yr gilts (+10.7bps) hitting their highest level (0.386%) since the pandemic began.That came on the back of the BoE’s latest policy decision, which pointed in a hawkish direction, building on the comment in the August statement that “some modest tightening of monetary policy over the forecast period is likely to be necessary” by saying that “some developments during the intervening period appear to have strengthened that case”. The statement pointed out that the rise in gas prices since August represented an upside risks to their inflation projections from next April, and the MPC’s vote also saw 2 members (up from 1 in August) vote to dial back QE. See DB’s Sanjay Raja’s revised rate hike forecasts here. We now expect a 15bps hike in February. The generalised move saw yields in other European countries rise as well, with those on 10yr bunds (+6.6bps), OATs (+6.5bps) and BTPs (+5.7bps) all seeing big moves higher with 10yr bunds seeing their biggest climb since late-February and back to early-July levels as -0.258%. The yield rise didn’t stop equity indices recovering further from Monday’s rout, with the S&P 500 up +1.21% as the index marked its best performance in over 2 months, and its best 2-day performance since May. Despite the mood at the end of the weekend, the S&P now starts Friday in positive territory for the week. The rally yesterday was led by cyclicals for a second straight day with higher commodity prices driving outsized gains for energy (+3.41%) and materials (+1.39%) stocks, and the aforementioned higher yields causing banks (+3.37%) and diversified financials (+2.35%) to outperform. The reopening trade was the other main beneficiary as airlines rose +2.99% and consumer services, which include hotel and cruiseline companies, gained +1.92%. In Europe, the STOXX 600 (+0.93%) witnessed a similarly strong performance, with index led by banks (+2.16%). As a testament to the breadth of yesterday’s rally, the travel and leisure sector (+0.04%) was the worst performing sector on this side of the Atlantic even while registering a small gain and lagging its US counterparts. Before we get onto some of yesterday’s other events, it’s worth noting that this is actually the last EMR before the German election on Sunday, which has long been signposted as one of the more interesting macro events on the 2021 calendar, the results of which will play a key role in not just domestic, but also EU policy. And with Chancellor Merkel stepping down after four terms in office, this means that the country will soon be under new management irrespective of who forms a government afterwards. It’s been a volatile campaign in many respects, with Chancellor Merkel’s CDU/CSU, the Greens and the centre-left SPD all having been in the lead at various points over the last six months. But for the last month Politico’s Poll of Polls has shown the SPD consistently ahead, with their tracker currently putting them on 25%, ahead of the CDU/CSU on 22% and the Greens on 16%. However the latest poll from Forschungsgruppe Wahlen yesterday suggested a tighter race with the SPD at 25, the CDU/CSU at 23% and the Greens at 16.5%. If the actual results are in line with the recent averages, it would certainly mark a sea change in German politics, as it would be the first time that the SPD have won the popular vote since the 2002 election. Furthermore, it would be the CDU/CSU’s worst ever result, and mark the first time in post-war Germany that the two main parties have failed to win a majority of the vote between them, which mirrors the erosion of the traditional big parties in the rest of continental Europe. For the Greens, 15% would be their best ever score, and exceed the 9% they got back in 2017 that left them in 6th place, but it would also be a disappointment relative to their high hopes back in the spring, when they were briefly polling in the mid-20s after Annalena Baerbock was selected as their Chancellor candidate. In terms of when to expect results, the polls close at 17:00 London time, with initial exit polls released immediately afterwards. However, unlike the UK, where a new majority government can immediately come to power the day after the election, the use of proportional representation in Germany means that it could potentially be weeks or months before a new government is formed. Indeed, after the last election in September 2017, it wasn’t until March 2018 that the new grand coalition between the CDU/CSU and the SPD took office, after attempts to reach a “Jamaica” coalition between the CDU/CSU, the FDP and the Greens was unsuccessful. In the meantime, the existing government will act as a caretaker administration. On the policy implications, it will of course depend on what sort of government is actually formed, but our research colleagues in Frankfurt have produced a comprehensive slidepack (link here) running through what the different parties want across a range of policies, and what the likely coalitions would mean for Germany. They also put out another note yesterday (link here) where they point out that there’s still much to play for, with the SPD’s lead inside the margin of error and with an unusually high share of yet undecided voters. Moving on to Asia and markets are mostly higher with the Nikkei (+2.04%), CSI (+0.53%) and India’s Nifty (+0.52%) up while the Hang Seng (-0.03%), Shanghai Comp (-0.07%) and Kospi (-0.10%) have all made small moves lower. Meanwhile, the Evergrande group missed its dollar bond coupon payment yesterday and so far there has been no communication from the group on this. They have a 30-day grace period to make the payment before any event of default can be declared. This follows instructions from China’s Financial regulators yesterday in which they urged the group to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors. Yields on Australia and New Zealand’s 10y sovereign bonds are up +14.5bps and +11.3bps respectively this morning after yesterday’s move from their western counterparts. Yields on 10y USTs are also up a further +1.1bps to 1.443%. Elsewhere, futures on the S&P 500 are up +0.04% while those on the Stoxx 50 are down -0.10%. In terms of overnight data, Japan’s August CPI printed at -0.4% yoy (vs. -0.3% yoy expected) while core was unchanged in line with expectations. We also received Japan’s flash PMIs with the services reading at 47.4 (vs. 42.9 last month) while the manufacturing reading came in at 51.2 (vs. 52.7 last month). In pandemic related news, Jiji reported that Japan is planning to conduct trials of easing Covid restrictions, with 13 prefectures indicating they’d like to participate. This is likely contributing to the outperformance of the Nikkei this morning. Back to yesterday now, and one of the main highlights came from the flash PMIs, which showed a continued deceleration in growth momentum across Europe and the US, and also underwhelmed relative to expectations. Running through the headline numbers, the Euro Area composite PMI fell to 56.1 (vs. 58.5 expected), which is the lowest figure since April, as both the manufacturing (58.7 vs 60.3 expected) and services (56.3 vs. 58.5 expected) came in beneath expectations. Over in the US, the composite PMI fell to 54.5 in its 4th consecutive decline, as the index hit its lowest level in a year, while the UK’s composite PMI at 54.1 (vs. 54.6 expected) was the lowest since February when the country was still in a nationwide lockdown. Risk assets seemed unperturbed by the readings, and commodities actually took another leg higher as they rebounded from their losses at the start of the week. The Bloomberg Commodity Spot index rose +1.12% as Brent crude oil (+1.39%) closed at $77.25/bbl, which marked its highest closing level since late 2018, while WTI (+1.07%) rose to $73.30/bbl, so still a bit beneath its recent peak in July. However that is a decent rebound of roughly $11/bbl since its recent low just over a month ago. Elsewhere, gold (-1.44%) took a knock amidst the sharp move higher in yields, while European natural gas prices subsidised for a third day running, with futures now down -8.5% from their intraday peak on Tuesday, although they’re still up by +71.3% since the start of August. US negotiations regarding the upcoming funding bill and raising the debt ceiling are ongoing, with House Speaker Pelosi saying that the former, also called a continuing resolution, will pass “both houses by September 30,” and fund the government through the first part of the fiscal year, starting October 1. Treasury Secretary Yellen has said the US will likely breach the debt ceiling sometime in the next month if Congress does not increase the level, and because Republicans are unwilling to vote to raise the ceiling, Democrats will have to use the once-a-fiscal-year tool of budget reconciliation to do so. However Democrats, are also using that process for the $3.5 trillion dollar economic plan that makes up the bulk of the Biden agenda, and have not been able to get full party support yet. During a joint press conference with Speaker Pelosi, Senate Majority Leader Schumer said that Democrats have a “framework” to pay for the Biden Economic agenda, which would imply that the broad outline of a deal was reached between the House, Senate and the White House. However, no specifics were mentioned yesterday. With Democrats looking to vote on the bipartisan infrastructure bill early next week, negotiations today and this weekend on the potential reconciliation package will be vital. Looking at yesterday’s other data, the weekly initial jobless claims from the US for the week through September 18 unexpectedly rose to 351k (vs. 320k expected), which is the second week running they’ve come in above expectations. Separately, the Chicago Fed’s national activity index fell to 0.29 in August (vs. 0.50 expected), and the Kansas City Fed’s manufacturing activity index also fell more than expected to 22 in September (vs. 25 expected). To the day ahead now, and data highlights include the Ifo’s business climate indicator from Germany for September, along with Italian consumer confidence for September and US new home sales for August. From central banks, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Tyler Durden Fri, 09/24/2021 - 08:12.....»»

Category: blogSource: zerohedgeSep 24th, 2021

Wolverine"s (WWW) Brand Strength, E-commerce Aid Customer Wins

Among Wolverine's (WWW) sales channels, e-commerce is its steady key lever. Also, the company is benefiting from its robust portfolio of brands. A diversified global business model, immense brand strength and sturdy digital capabilities are aiding Wolverine World Wide, Inc. WWW to navigate the turbulent times. The company’s major brands like Merrell and Saucony have been standing out for quite some time now. Steady product innovations and launches are added positives. It is continuously reinforcing digitization to enhance product flow apart from strengthening its distribution centers. This Rockford, MI-based company’s shares have increased 31.5% over the course of a year compared with its industry’s 29.6% rally.More on StrategiesAmong Wolverine’s sales channels, e-commerce is a constant key driver. The company is leveraging higher digital marketing investments to boost traffic and is deepening its focus on better merchandising to optimize conversion. It is expanding digital content and flow of information as well as managing its consumer database in a better fashion. Solid growth at the brands’ websites is also adding up to the overall digital performance.Wolverine’s direct-to-consumer (DTC) channels have been strong for a while now. The company’s owned e-commerce revenues more than doubled in the first half of 2021 from the same-period reading in 2019. Owned e-commerce revenues surged 90.7% from the 2019 tally. In the second quarter of 2021, total DTC revenues jumped 17.5% year over year and 68.8% from the 2019 level. Brandwise, registered growth of above 20% while revenues skyrocketed more than 150% year over year.Image Source: Zacks Investment ResearchThe company is focused on improvising brands that suit consumer preferences aptly on the back of the advanced technologies and accurate market insights. It remains committed toward its latest innovations and launches across different brand banners and brings forward a robust pipeline of new products. Management is on track with the launch of its first Merrell mobile app. Also, the company is quite focused on driving growth across performance product categories including hiking, running and work categories.In addition, Wolverine’s international business, which comprises a widespread network of global partners, continues to be impressive. Saucony stores and core technical products are performing impressively in China as the brand's joint venture business is ramping up. Also, the company’s EMEA market continues to show strength and is a significant growth opportunity. The company’s Merrell brand also has global growth potential, mainly in the EMEA.Wrapping UpThe aforesaid strategies are expected to keep Wolverine’s sturdy momentum alive in the future. Management anticipates delivering significant growth in 2021 from the 2020 and 2019 levels, driven by accelerating demand for its brands. Robust products, impressive merchandising practices and healthier inventory positions are likely to fuel growth. For 2021, the company projected revenues in the band of $2,340-$2,400 million, suggesting growth of 31-34% from the 2020 reading and a 5.6% rise from the 2019 actuals at the upper end of the range. Adjusted earnings per share are envisioned in the bracket of $2.20-$2.30, indicating growth from 93 cents reported in 2020.The Zacks Consensus Estimate for 2021 sales and earnings is currently pegged at $2.46 billion and $2.31 per share, respectively. These estimates imply corresponding growth of about 37% and 148% from the respective year-ago reported figures. The company’s earnings status looks pretty good as the metric beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 23%. An expected long-term earnings growth rate of 10% for this currently Zacks Rank #2 (Buy) stock further adds to its attractiveness.Other Key Bets to ConsiderSteven Madden SHOO has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.Ralph Lauren RL, presently a Zacks #1 Ranked stock, has a long-term earnings growth rate of 15%.GIII Apparel GIII has a long-term earnings growth rate of 11.6% and a Zacks Rank of 1, presently. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ralph Lauren Corporation (RL): Free Stock Analysis Report Wolverine World Wide, Inc. (WWW): Free Stock Analysis Report GIII Apparel Group, LTD. (GIII): Free Stock Analysis Report Steven Madden, Ltd. (SHOO): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksSep 23rd, 2021

Pre-Earnings Option Spread To Profit Off Micron Technology (MU)

I'm looking at a 3-legged option spread that will allow you to see endless upside gains on a rebound to the upside and still furnish you with a downside lever Micron Technologies MU will be reporting its highly anticipated August quarter results next Tuesday (9/28) after the closing bell. I am looking for a springboard price action setup following what is projected to be a record quarter. The best way to take advantage of this historically big post-earnings mover is with options.There are various bull strategies that you could utilize depending on your risk appetite and underlying assumptions about where the equity is headed. The options spread that I am presenting presumes an outsized post-earnings move with an inclination to the upside.History is the best indicator of future performance. The prior 8 quarterly reports have resulted in an average price action of 5.2% (5 up and just 3 down). With these shares trading at a heavily discounted 6.1x P/E going into what analysts forecast to be Micron’s best year yet, I see no reason why this stock wouldn’t slingshot out of next week’s report. Still, I want to have some downside protection if things go south.MU continues to get hammered by traders because of its adverse technical appearance. This stock looks atrocious from a technical perspective, but the fresh fundamentals that next week’s quarterly release deliver could quickly reverse its unfavorable chart narrative.The SpreadI’m looking at a 3-legged option spread that will allow you to see endless upside gains on a rebound to the upside and still furnish you with a downside lever if the results and guidance come in below expectations.My strategy involves October monthly options (10/15 expiration), which gives the spread holder time to let MU’s post-earnings price action play out. The spread consists of purchasing a put and a call at-the-money (or highest liquidity option near-the-money), which would be the $75 strike in this instance with MU.The spread I have just outlined is called a straddle. This spread is typically utilized prior to a catalyzing event that is sure to move the stock, but you are unsure of the direction. Straddle spreads have expensive entry costs or premiums because you combine the costs of both the put and the call.I am adding one more component to this spread, making it a little less expensive and more bullish. Selling an out-of-the-money MU put at $70 will offer you a decent credit to lower the initial cost of the spread while still allowing you to (marginally) profit from a downside move.To sum it up, you would be purchasing all monthly October options: a $75 strike call for $225, a $75 strike put for $325, and would sell a $70 put contract for $125, equalling a total initial cost of $425. However, you are not actually risking this much, and you can see this represented in the Options Profit Calculator’s P&L breakdown.The P&L chart below exhibits profitability levels at each indicated exit date, represented by the different color lines.Image Source: Options Profit CalculatorThese options are currently trading on depressed pre-earnings implied volatility (IV), meaning that the presumed outsized price move from this upcoming quarterly report isn’t fully priced in. If we get a big move, we will see IV jump either way (up or down), resulting in our premiums rising, giving us an even larger upside to our long contracts (puts and calls). Final ThoughtsMicron, the leading US memory chip-making powerhouse, controls 23.1% of the DRAM market and 11.1% of NAND, which are the most prominent memory markets in the economy today. In August, MU slipped into a bear market following a slew of downgrades from analysts predicting the (temporary) peak in memory chip growth. These downgrades pushed MU far below its intrinsic value and set it up for this option spread strategy I am presenting you today. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Micron Technology, Inc. (MU): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Steelmakers Capitalize Record Prices to Spend Big on New Mills

The recently announced multi-billion projects from major U.S. steel producers reflect the underlying strength in the domestic steel industry underpinned by strong demand and record-high prices. Record-high steel prices and an upswing in demand in the manufacturing sector have ushered in boom time for the steel industry. Some of the biggest names in this space are making big investment to establish new mega mills to leverage the industry’s bull run.Steel Boom Driving Spending SplurgeMajor American steel producers, Nucor Corp. NUE and United States Steel Corp. X recently announced plans to set up new mills in the United States.Nucor, on Monday, announced its plans to construct a state-of-the-art sheet mill having an annual capacity of 3 million tons. It is looking at locations in Ohio, Pennsylvania and West Virginia to build the mill.The company is spending roughly $2.7 billion on the new mill that will be able to produce hot-rolled sheet products with downstream processing. The construction is expected to take two years after the required regulatory approvals are obtained. The geographic position of the mill will allow it to serve Midwestern and Northeastern customers and ensure a significantly lower carbon footprint than nearby competitors.Nucor noted that the new mill will allow it to meet the growing need of many of its customers, especially in the automotive market. The sheet mill is the latest in a series of investments made by the Charlotte-based steel giant that are expected to contribute to profitable growth and strengthen its position as a low-cost producer. The company is on track with its other significant growth projects — the Brandenburg plate mill, the Generation 3 flexible galvanizing line at the Hickman sheet mill and the modernization and expansion of the Gallatin sheet mill in Kentucky.U.S Steel, last week, also said that it plans to spend $3 billion to build a new, three-million-ton mini mill flat-rolled facility in the United States. The planned mini mill will integrate two state-of-the-art electric arc furnaces (“EAF”) with differentiated steelmaking and finishing technology, including purchased equipment owned by the company. The continued adoption of mini mill technology will enhance the company’s ability to produce the next generation of highly-profitable proprietary sustainable steel solutions, including Advanced High Strength Steels.U.S. Steel expects to start construction of the mini mill in the first half of 2022 and commence production in 2024. The planned investment is a key step toward achieving the company's 2030 goal of reducing global greenhouse gas emissions intensity by 20% from the 2018 baseline.The newly announced multi-billion projects from these major steel producers reflect the underlying strength in the steel industry underpinned by solid demand and pricing fundamentals. Steel Dynamics, Inc. STLD is also progressing with the construction of its 3 million-ton state-of-the-art EAF flat roll steel mill in Sinton, TX with production expected to commence in fourth-quarter 2021.The U.S. steel industry came roaring back in 2021 after bearing the brunt of the pandemic last year, thanks to a strong revival in domestic demand and zooming steel prices.Coronavirus hurt demand for steel across major end-use markets such as construction and automotive during the first half of 2020. However, demand for steel started to pick up from the third quarter last year with the resumption of operations across major steel-consuming sectors, following the loosening of restrictions.American steel makers are seeing healthy order booking in automotive, notwithstanding the semiconductor crunch. Demand in the non-residential construction market and equipment also remains resilient.The demand rebound has contributed to the significant uptick in U.S. steel industry capacity utilization on the restart of idled capacity. U.S. steel prices are also on an upswing, driven by an upturn in demand and supply shortages partly due to the pandemic.The benchmark hot-rolled coil (“HRC”) prices are shooting higher on U.S. steel mills’ price hike actions, tight supply conditions, low steel imports and solid pent-up demand. Prices are hitting fresh highs, having shot up more than four-fold from the lows witnessed in August 2020 and also nearly doubled since the start of 2021. HRC prices have cruised above the $1,900 per short ton level as the upward momentum continues.The price rally is expected to continue in the coming months on solid demand and supply constraints, which is likely to be exacerbated by a series of planned mill outages and scheduled maintenance.U.S. Steel Industry Looks Set for A Solid Q3 Earnings SeasonRobust domestic demand and the price surge helped U.S. steel companies deliver strong results in the second quarter. These companies are benefiting from spread expansion as a significant spurt in HRC prices has more than offset higher ferrous scrap costs. Higher demand and a favorable pricing environment are likely to help U.S. steel producers to continue the momentum in the third quarter.Some of the prominent U.S. steel producers recently came up with an upbeat guidance for the September quarter. Nucor said that it expects to log record quarterly earnings in the third quarter, driven by strong demand across most of its end-markets and higher average selling prices. Steel Dynamics also sees record quarterly performance, supported by strong underlying steel demand and significant metal spread expansion, especially within the flat roll steel operations.U.S. Steel expects record third-quarter results driven by its Best for All business model, strong reliability and quality performance, persistent customer demand as well as sustained rise in steel selling prices. Olympic Steel, Inc. ZEUS, last month, said that it expects a strong third quarter on strong market dynamics and record-high prices.Nucor, Steel Dynamics and U.S. Steel each sports a Zacks Rank #1 (Strong Buy), while Olympic Steel has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank stocks here. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Steel Dynamics, Inc. (STLD): Free Stock Analysis Report United States Steel Corporation (X): Free Stock Analysis Report Nucor Corporation (NUE): Free Stock Analysis Report Olympic Steel, Inc. (ZEUS): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksSep 23rd, 2021

The Estee Lauder Companies (EL) Gains on Skin Care, Online Strength

The Estee Lauder Companies (EL) is implementing new technology and digital experiences to boost growth. Also, the company's Skin Care portfolio is performing well. The Estee Lauder Companies Inc. EL appears well placed, courtesy of strength in its Skin Care business and online operations. The company is on track with effective cost-saving efforts. However, some pandemic-led intermittent shutdowns are roadblocks for the company.Let’s delve deeper.What’s Working Well?The Estee Lauder Companies has a strong online business and expects the same to be a major growth engine for the upcoming years. The company has been implementing new technology and digital experiences including online booking for each store appointment, omni-channel loyalty programs and high touch mobile services. These initiatives and the company’s digital-first mindset have been boosting online sales. During fiscal 2021, sales of the company’s products via all online channels rallied 34%, contributing 28% to overall sales.Image Source: Zacks Investment ResearchThe Estee Lauder Companies’ Skin Care portfolio has been performing well for a while now. During fourth-quarter fiscal 2021, the Skin Care category’s sales were up 47% year over year. The company expects to keep witnessing solid growth in the Skin Care category during fiscal 2022. Management, in its last earnings call, stated that it is optimistic about three recently-launched Skin Care innovations —  Estee Lauder new Advanced Night Repair Eye Matrix, La Mer The Hydrating Infused Emulsion and Clinique Smart Clinical Repair Wrinkle Correcting Serum. In May 2021, The Estee Lauder Companies took another step to expand its Skin Care business when it concluded the first phase of raising its ownership stake in DECIEM Beauty Group Inc. ("DECIEM").Apart from these, uncertainties related to COVID-19 led management to implement stringent cost-curtailment practices. The Estee Lauder Companies, which shares space with Coty Inc. COTY, has been benefiting from cost-saving initiatives like the Leading Beauty Forward as well as the post-COVID business acceleration program. During the fiscal fourth quarter, the company’s gross profit came in at $2,950 million, up 77%. Gross margin increased to 74.9% from 68.4% reported in the year-ago quarter.Roadblocks on the WayWhile most brick-and-mortar retail stores that sell The Estee Lauder Companies’ products (company and customer operated) remained operational — especially in China and the United States — during much of the fiscal fourth quarter, there were intermittent shutdowns in the rest of the world. Many retail stores were temporarily shut at some point in the quarter across the U.K., Continental Europe, Canada, most of Latin America and the Asia/Pacific region (except China) due to the resurgence of COVID-19 infections.In places where stores were open, traffic was lower than pre-pandemic levels. Additionally, international travel has been majorly restricted worldwide due to government regulations and consumer health concerns. Such restrictions have been negatively impacting consumer traffic in most travel retail locations. The company continues to see soft demand for makeup products compared with pre-pandemic levels, thanks to lesser makeup usage occasions and mask-wearing mandates.That being said, we believe that focus toward the aforementioned growth endeavors are likely to help The Estee Lauder Companies stay afloat amid the hurdles. Shares of this Zacks Rank #3 (Hold) company have increased 19.7% so far this year compared with the industry’s growth of 12.1%.Top 2 Cosmetics PickHelen of Troy Limited HELE, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 28.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Nu Skin Enterprises, Inc. NUS, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 15.7%, on average. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report Helen of Troy Limited (HELE): Free Stock Analysis Report Nu Skin Enterprises, Inc. (NUS): Free Stock Analysis Report Coty Inc. (COTY): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Cracker Barrel (CBRL) Up on Off-Premise Model Amid Inflation

Cracker Barrel's (CBRL) increased focus on its off-premise business model and continuous efforts for menu innovation bode well. Rise in labor and commodity costs are concerning. Cracker Barrel Old Country Store, Inc. CBRL continues to benefit from its off-premise business model, retail business and the acquisition of Maple Street Biscuit. The company’s cost-cutting and sales-building efforts also bode well.However, wage and commodity inflation are potential headwinds for the company. So far this year, shares of Cracker Barrel have gained 5.5%, underperforming the Zacks Retail – Restaurants industry’s 12.6% rise.Let’s take a look at the factors influencing this Zacks Rank #3 (Hold) company's growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Factors Driving GrowthMenu Renovation Driving Sales: Cracker Barrel is relentlessly focusing on rejuvenating its menu, which serves as the backbone of the company’s riveting growth potential. The company’s in-store menu features Fried Chicken Benedict bowl, a Ham n' Maple Bacon bowl, as well as a Sausage, Grits Cakes and Green Tomato Gravy bowl. The company believes that the platform will complement its all-day breakfast offering, drive check favorability and promote guest perceptions of menu variety. The company also plans for a dinner menu evolution by introducing new high-quality food items in the same. Going forward, the company expects to expand this initiative and evolve its menu to reinforce the core strength of desirable homestyle food. For fiscal 2022, it expects to shift to the breakfast menu, the first phase of which is streamlining the categories of breakfast offerings to alleviate confusion, enabling guest customization with a build-your-own homestyle breakfast and better highlighting the company’s value proposition.Sales-Building Efforts: In a bid to address the challenges of the competitive restaurant industry, Cracker Barrel undertakes extensive marketing efforts, mainly focusing on the brand’s differentiation, menu offering and its value. In order to drive traffic, Cracker Barrel relies heavily on seasonal promotions and limited-time offers to boost its top-line performance, as these are appealing to both regular and less-frequent guests. Robust sales-building efforts, vaccinations and the easing of capacity restrictions have helped the company achieve average weekly sales of nearly $59,000 in July, compared with $54,000 per week during April. The company also benefited from its beer and wine program, digital investments, and its menu-evolution efforts. In fiscal 2021, the introduction of a new dinner menu and the continued roll-out of beer and wine to the stores have helped the company to generate higher sales.Downsizing Cost: Cracker Barrel has an effective cost-cutting mechanism in place. The company undertakes various measures to keep costs under control. Currently, it is carrying out its cost-saving plan through its two prime initiatives — food waste and labor management. The company changed the structure in its retail sales and service functions, and now cross-trains its retail sales associate and cashier positions. During fiscal 2021, the company generated labor-related cost savings of $7.5 million, primarily driven by the strategic action it took during the fiscal third quarter. Incentive and other compensation costs also decreased during the period. On the utility front, the company has undertaken the implementation of LED lighting, which is being installed on the exteriors of its stores. This is likely to boost efficiencies and drive cost favorability, going forward. Meanwhile, the company expects costs savings of approximately $50 million over the long term.Off-Premise Sales: Cracker Barrel aims to meet its consumers' need for convenience via growth in its off-premise business. In fact, it plans to enhance its off-premise platform by introducing catering menu offering and in-store training of hourly employees. During fourth-quarter fiscal 2021, comparable store off-premise sales rose 108.6% from the fiscal 2019 level. Meanwhile, the company continues to focus on off-premise initiatives, such as curbside delivery, third-party delivery and family meal baskets. It also continues to invest in technology initiatives to enhance guests’ experience. The company is also very optimistic about single-location test of its virtual brand chicken and biscuits. It is planning to increase the test to 19 more locations. The company’s off-premise sales remained elevated in the fourth-quarter fiscal 2021 and more than doubled from the fourth-quarter fiscal 2019 level. It also retained nearly 75% of the peak off-premise growth from pre-COVID levels. For fiscal 2022, the company plans to drive off-premise sales through awareness building, advertising and partnerships with third-party delivery companies.Rewarding Shareholders: Cracker Barrel has been consistently enhancing shareholders’ returns through share repurchases and dividends. During fourth-quarter fiscal 2021, the company announced a hike in its quarterly dividend payout. It raised its quarterly dividend by 30%, which indicates its intention to utilize free cash for boosting shareholders’ returns. The company raised the quarterly dividend to $1.30 per share (or $5.20 annually) from the previous payout of $1.00 (or $4.00 annually). The hiked dividend will be payable on Nov 9, 2021, to shareholders of record as of Oct 22, 2021. Management has also approved share repurchases of up to $100 million. Image Source: Zacks Investment ResearchConcerns:Despite cost-saving initiatives, higher labor costs due to increased wages are expected to persistently keep Cracker Barrel’s profits under pressure. The company is apprehensive about inflationary costs that are likely to be incurred. Expenses for opening units are anticipated to hurt the company’s margins. During the fourth quarter of fiscal 2021, gross margin was pressured by commodity inflation of 5.1%. Anticipated wage and commodity inflation in the range of mid-to-high single digits for fiscal 2022 may hurt margins. The company expects inflation to be moderate across fiscal 2022.During fourth-quarter fiscal 2020, comparable store restaurant sales declined 6.8% from the level recorded in the same period in fiscal 2019.Three Retail – Restaurants Stocks Worth BuyingA few better-ranked stocks in the same industry include Jack in the Box Inc. JACK, The Wendy's Company WEN and Yum! Brands, Inc. YUM, each carrying a Zacks Rank #2 (Buy).Jack in the Box has a trailing four-quarter earnings surprise of 26.4%, on average.Wendy's and Yum! Brands’ earnings for 2021 are expected to rise 43.9% and 22.4%, respectively. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report Jack In The Box Inc. (JACK): Free Stock Analysis Report Yum Brands, Inc. (YUM): Free Stock Analysis Report The Wendys Company (WEN): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

CVS Health (CVS) Retail Business Grows Despite Cost Pressure

CVS Health's (CVS) retail business sees solid rebound in front-store sales with strength across all categories. Increasing demand for Pharmacy Benefit Management (PBM) and specialty pharmacy along with strong digitization of business is a key driver of CVS Health’s CVS persistent growth amid the pandemic-induced challenges. The company currently carries a Zacks Rank #3 (Hold).Over the past year, CVS Health has outperformed its industry. The stock has gained 46.2% compared with the 40.8% rise of the industry.CVS Health's second-quarter earnings and revenues surpassed the respective Zacks Consensus Estimate. Revenues across all the three operating segments improved in the quarter. Pharmacy services revenue growth of 9.8% outperformed the company’s expectations. Operating income also rose significantly. Specialty pharmacy revenues were up 8.9% year over year. The company added nearly 1 million new integrated pharmacy and medical members through the 2021 and 2022 selling seasons.Retail reported above-market growth also exceeded the company’s expectations. Prescription market share was over 26%. There was a solid rebound in front-store sales, which increased nearly 13% in the quarter, on strength across all categories. One-third of pharmacy script growth was attributable to COVID-19 vaccines.Healthcare benefits results were strong driven by growth in government business. While the medical benefit ratio of 84.1% was modestly above expectations due to COVID-related costs, underlying non-COVID costs dropped.CVS Health Corporation Price CVS Health Corporation price | CVS Health Corporation QuoteThe company noted that the consumer-centric digital strategy is more relevant in the current environment as people are using technology while staying indoors. In the second quarter, digital retail customers spent 2.5 times more in front store, managed 1.5 times more scripts, and continued to remain as customers longer than other pharmacy patients. Its increased full-year guidance indicates that this bullish trendis likely to continue through the rest of 2021.CVS Health continues to believe that aggregate medical costs will modestly exceed baseline levels during the second half of 2021. In addition to the strong performance in the core business, the company is benefiting from the broad and unique portfolio of assets with the first CVS-Aetna co-branded offerings.The company also announced that it will re-enter the public exchanges in 2022. CVS Health currently expects to enter up to eight states, where it expects to make a meaningful impact and maximize returns with this first-ever Aetna-CVS branded offerings.On the flip side, CVS Health’s second-quarter adjusted earnings declined year over year on escalating costs and expenses, which are putting pressure on both the margins. Total cost (including Benefit Cost) rose 14.3%. Gross profit fell 1.1%. Gross margin contracted 226 basis points (bps) to 18.2%. The operating margin in the quarter under review fell 121 bps to 5.9% on a 7.6% decline in operating profit.Further, within Retail/Long Term Care (LTC), the company is facing continued reimbursement pressure and the impact of recent generic introductions. A highly competitive landscape  poses stiff challenges to CVS Health.Key PicksA few better-ranked stocks from the Medical-Products industry are Envista Holdings Corporation NVST, VAREX IMAGING VREX, and BellRing Brands, Inc. BRBR.Envista Holdings, which carries a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 27.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.VAREX, carrying a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 5%.BellRing Brands, with a Zacks Rank #2, has a long-term earnings growth rate of 29.1%. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CVS Health Corporation (CVS): Free Stock Analysis Report VAREX IMAGING (VREX): Free Stock Analysis Report Envista Holdings Corporation (NVST): Free Stock Analysis Report BellRing Brands, Inc. (BRBR): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Telecom Stock Roundup: AT&T Halves HBO Max Price, Verizon 5G for Air Force & More

While AT&T (T) is presently offering HBO MAX at $7.49 per month for six months in a limited promotional deal till Sep 26, Verizon (VZ) will provide 5G mobility service to seven Air Force Reserve Command installations. Over the past five trading days, U.S. telecom stocks continued to mirror the broader benchmark equity indices in a similar trend as the prior week and witnessed a gradual downtrend due to an apparent policy paralysis despite the best intentions of the government to spur a healthy growth momentum. The final passage of the $1.2 trillion infrastructure bill by the House appears to be stuck in a potential stalemate, as several progressive Democrats want the bill to be tied to the larger $3.5 trillion budget reconciliation bill that is facing massive backlash from both Republicans and Democrats. This even forced President Biden to personally meet the dissident groups to seek an early resolution, although it reportedly failed to broker a compromise despite some ‘productive’ discussions. The infusion of federal funds to improve broadband infrastructure for greater access and deeper penetration in the underserved domestic markets is the need of the hour to bridge the digital divide. However, the uncertainty over the much sought-after infrastructure bill that focuses on affordability and low-cost service option has hard hit the industry.In order to stimulate broadband growth across the country, the U.S. Treasury Department has issued fresh guidelines as to how states should allocate money from the $10 billion Capital Projects Fund created as part of the American Rescue Plan Act of 2021. The instruction set encourages states to prioritize investments in fiber-optic connectivity and developing related infrastructure for the future broadband needs of the communities. It also urges states to pursue projects involving broadband networks either owned or affiliated to the government, non-profit or co-operatives in order to serve larger communities with less pressure on profit-making initiatives.   Meanwhile, China-based Hytera – a supplier of radio equipment to emergency first responders – said in a submission to the FCC that it has been unfairly targeted by the government and argued that its radio equipment do not pose any security risk as they do not use broadband connectivity. It urged the FCC to specify which of its equipment are deemed to be potential threats in order to avoid being hit across its entire business. The developments assume significance as the government is reportedly aiming to ease diplomatic relations with Beijing that have worsened over recent times to improve bilateral trade, as several restrictions and economic sanctions were hurting operations of domestic firms.    Regarding company-specific news, business tweaks, portfolio enhancements, a strategic tie-up, and product launch primarily took the center stage over the past five trading days.Recap of the Week’s Most Important Stories1.    Over the past few months, AT&T Inc. T has taken several strategic decisions to focus more on its customer-centric business model. One of these was the decision to phase out HBO and HBO Max subscriptions through Amazon Prime Video Channels of, Inc., as it aimed to develop direct-to-consumer relationships. As HBO subscriptions officially went off the air from Amazon Prime on Sep 15, AT&T apparently lost about 5 million U.S. subscribers who had signed through Amazon. The company is now aiming to woo back these customers and attract newer ones as well through a discounted price offering as the streaming wars heat up.HBO Max subscription was originally priced at $14.99 per month. AT&T is presently offering this streaming service at $7.49 per month for six months in a limited promotional deal till Sep 26. The disruptive pricing is lower than the Prime video membership of $8.99 per month, plus taxes and is likely to be a lucrative offer for both existing and new customers. The offer, however, is available to only U.S. customers as AT&T expects to register healthy growth in HBO Max subscribers in international markets.      2.     Verizon Communications Inc. VZ recently secured a prime contract from the U.S. Department of Defense for an undisclosed amount to provide 5G mobility service to seven Air Force Reserve Command installations. The deal underscores the trust and reliability enjoyed by the carrier as it continues to support the digital transformation initiatives of the federal government.Verizon Public sector, the unit dedicated to serving various public sector entities, has been entrusted to deliver 5G Ultra Wideband service in California, Florida, Massachusetts, New York, Ohio, Pennsylvania, and Texas Air Force bases. This includes the deployment of c-band radios at outdoor locations at the facilities to improve signal bandwidth at higher speed and lower latency.3.     ADTRAN, Inc. ADTN recently announced that it has secured multiple partnerships with service providers to deploy its highly scalable fiber access network in the rural regions of the U.K. The Huntsville, AL-based company has collaborated with Alncom, Wildanet, and Netomnia.The alliances will bridge the digital divide on the back of a cost-effective fiber-to-the-home network, thereby delivering exceptional broadband experiences to customers, particularly based in the underserved areas of the European country.4.    Viasat, Inc. VSAT has secured two research contracts from the U.S. Department of Defense (“DoD”) to evaluate the potential and feasibility of 5G connectivity in the battlefield. The Carlsbad, CA-based company has been working with DoD to address challenging communications issues across multiple network domains. The research contracts, which will be conducted over a span of three years, were awarded through the Information Warfare Research Project. These contracts are part of the $600 million 5G research program that was announced last year by DoD. The initiative aims to assess how the fifth-generation technology can boost warfighting capabilities.  5.    Viavi Solutions Inc. VIAV recently announced that it has augmented the capabilities of its Xgig 5P16 platform. It now supports multi-user functionality and analyzer bifurcation for multiple users and simultaneous tests on a single platform. The Xgig 5P16 Exerciser platform enables real-time analysis of Peripheral Component Interconnect Express or PCIe 5.0 data traffic at all layers of the stack.VIAVI Xgig 5P16 Analyzer is specifically designed to modernize data traffic analysis while addressing the growing demands of AI and IoT with enhanced capabilities. The device is reckoned to be the first-of-its-kind solution in the market. The latest move highlights Viavi’s commitment to drive the influence of bandwidth-intensive computing services globally on the back of its technology prowess.Price PerformanceThe following table shows the price movement of some of the major telecom stocks over the past week and six months.Image Source: Zacks Investment ResearchIn the past five trading days, T-Mobile was the only stock that gained 0.5%, while Bandwidth declined the most with its stock falling 6.5%.Over the past six months, Motorola has been the best performer with its stock appreciating 24.3%, while Bandwidth declined the most with its stock falling 17.2%.Over the past six months, the Zacks Telecommunications Services industry has gained 7.5% and the S&P 500 has rallied 12.7%.Image Source: Zacks Investment ResearchWhat’s Next in the Telecom Space?In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry and address the bottlenecks to spur growth. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ADTRAN, Inc. (ADTN): Free Stock Analysis Report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report Viasat Inc. (VSAT): Free Stock Analysis Report Viavi Solutions Inc. (VIAV): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2021

Futures Rise On Taper, Evergrande Optimism

Futures Rise On Taper, Evergrande Optimism US index futures jumped overnight even as the Fed confirmed that a November tapering was now guaranteed and would be completed by mid-2022 with one rate hike now on deck, while maintaining the possibility to extend stimulus if necessitated by the economy. Sentiment got an additional boost from a strong showing of Evergrande stock - which closed up 17% - during the Chinese session, which peaked just after Bloomberg reported that China told Evergrande to avoid a near-term dollar bond default and which suggested that the "government wants to avoid an imminent collapse of the developer" however that quickly reversed when the WSJ reported, just one hour later, that China was making preparations for Evergrande's demise, and although that hammered stocks, the report explicitly noted that a worst-case scenario for Evergrande would mean a partial or full nationalization as "local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion." In other words, both reports are bullish: either foreign creditors are made whole (no default) as per BBG or the situation deteriorates and Evergrande is nationalized ("SOEs step in") as per WSJ. According to Bloomberg, confidence is building that markets can ride out a pullback in Fed stimulus, unlike 2013 when the taper tantrum triggered large losses in bonds and equities. "Investors are betting that the economic and profit recovery will be strong enough to outweigh a reduction in asset purchases, while ultra-low rates will continue to support riskier assets even as concerns linger about contagion from China’s real-estate woes." That's one view: the other is that the Fed has so broken the market's discounting ability we won't know just how bad tapering will get until it actually begins. “The Fed has got to be pleased that their communication on the longer way to tapering has avoided the dreaded fear of the tantrum,” Jeffrey Rosenberg, senior portfolio manager for systematic fixed income at BlackRock Inc., said on Bloomberg Television. “This is a very good outcome for the Fed in terms of signaling their intent to give the market information well ahead of the tapering decision.” Then there is the question of Evergrande: “With regards to Evergrande, all those people who are waiting for a Lehman moment in China will probably have to wait another turn,” said Ken Peng, an investment strategist at Citi Private Bank Asia Pacific. “So I wouldn’t treat this as completely bad, but there are definitely a lot of risks on the horizon.” In any case, today's action is a continuation of the best day in two months for both the Dow and the S&P which staged a strong recovery from two-month lows hit earlier in the week, and as of 745am ET, S&P 500 E-minis were up 25.25 points, or 0.6%, Dow E-minis were up 202 points, or 0.59%, while Nasdaq 100 E-minis were up 92.0 points, or 0.60%. In the premarket, electric vehicle startup Lucid Group rose 3.1% in U.S. premarket trading. PAVmed (PVM US) jumps 11% after its Lucid Diagnostics unit announced plans to list on the Global Market of the Nasdaq Stock Market.  Here are some of the biggest movers today: U.S.-listed Chinese stocks rise in premarket trading as fears of contagion from China Evergrande Group’s debt crisis ease. Blackberry (BB US) shares rise 8.7% in premarket after co.’s 2Q adjusted revenue beat the average of analysts’ estimates Eargo (EAR US) falls 57% in Thursday premarket after the hearing aid company revealed it was the target of a Justice Department criminal probe and withdrew its forecasts for the year Amplitude Healthcare Acquisition (AMHC US) doubled in U.S. premarket trading after the SPAC’s shareholders approved the previously announced business combination with Jasper Therapeutics Steelcase (SCS US) fell 4.8% Wednesday postmarket after the office products company reported revenue for the second quarter that missed the average analyst estimate Vertex Energy Inc. (VTNR US) gained 2.1% premarket after saying the planned acquisition of a refinery in Mobile, Alabama from Royal DutVTNR US Equitych Shell Plc is on schedule Synlogic (SYBX US) shares declined 9.7% premarket after it launched a stock offering launched without disclosing a size HB Fuller (FUL US) climbed 2.7% in postmarket trading after third quarter sales beat even the highest analyst estimate Europe's Stoxx 600 index rose 0.9%, lifted by carmakers, tech stocks and utilities, which helped it recover losses sparked earlier in the week by concerns about Evergrande and China’s crackdown on its property sector. The gauge held its gain after surveys of purchasing managers showed business activity in the euro area lost momentum and slowed broadly in September after demand peaked over the summer and supply-chain bottlenecks hurt services and manufacturers. Euro Area Composite PMI (September, Flash): 56.1, consensus 58.5, last 59.0. Euro Area Manufacturing PMI (September, Flash): 58.7, consensus 60.3, last 61.4. Euro Area Services PMI (September, Flash): 56.3, consensus 58.5, last 59.0. Germany Composite PMI (September, Flash): 55.3, consensus 59.2, last 60.0. France Composite PMI (September, Flash): 55.1, consensus 55.7, last 55.9. UK Composite PMI (September, Flash): 54.1, consensus 54.6, last 54.8. Commenting on Europe's PMIs, Goldman said that the Euro area composite PMI declined by 2.9pt to 56.1 in September, well below consensus expectations. The softening was broad-based across countries but primarily led by Germany. The peripheral composite flash PMI also weakened significantly in September but remain very high by historical standards (-2.4pt to 57.5). Across sectors, the September composite decline was also broad-based, with manufacturing output softening (-3.3pt to 55.6) to a similar extent as services (-2.7pt to 56.3). Supply-side issues and upward cost and price pressures continued to be widely reported. Expectations of future output growth declined by less than spot output on the back of delta variant worries and supply issues, remaining far above historically average levels. Earlier in the session, Asian stocks rose for the first time in four sessions, as Hong Kong helped lead a rally on hopes that troubled property firm China Evergrande Group will make progress on debt repayment. The MSCI Asia Pacific Index climbed as much as 0.5%, with Tencent and Meituan providing the biggest boosts. The Hang Seng jumped as much as 2.5%, led by real estate stocks as Evergrande surged more than 30%. Hong Kong shares later pared their gains. Asian markets were also cheered by gains in U.S. stocks overnight even as the Federal Reserve said it may begin scaling back stimulus this year. A $17 billion net liquidity injection from the People’s Bank of China also provided a lift, while the Fed and Bank of Japan downplayed Evergrande risks in comments accompanying policy decisions Wednesday. Evergrande’s stock closed 18% higher in Hong Kong, in a delayed reaction to news a unit of the developer had negotiated interest payments on yuan notes. A coupon payment on its 2022 dollar bond is due on Thursday “Investors are perhaps reassessing the tail risk of a disorderly fallout from Evergrande’s credit issues,” said Chetan Seth, a strategist at Nomura. “However, I am not sure if the fundamental issue around its sustainable deleveraging has been addressed. I suspect markets will likely remain quite volatile until we have some definite direction from authorities on the eventual resolution of Evergrande’s debt problems.” Stocks rose in most markets, with Australia, Taiwan, Singapore and India also among the day’s big winners. South Korea’s benchmark was the lone decliner, while Japan was closed for a holiday In rates, Treasuries were off session lows, with the 10Y trading a 1.34%, but remained under pressure in early U.S. session led by intermediate sectors, where 5Y yield touched highest since July 2. Wednesday’s dramatic yield-curve flattening move unleashed by Fed communications continued, compressing 5s30s spread to 93.8bp, lowest since May 2020. UK 10-year yield climbed 3.4bp to session high 0.833% following BOE rate decision (7-2 vote to keep bond-buying target unchanged); bunds outperformed slightly. Peripheral spreads tighten with long-end Italy outperforming. In FX, the Bloomberg Dollar Spot Index reversed an earlier gain and dropped 0.3% as the dollar weakened against all of its Group-of-10 peers apart from the yen amid a more positive sentiment. CAD, NOK and SEK are the strongest performers in G-10, JPY the laggard.  The euro and the pound briefly pared gains after weaker-than-forecast German and British PMIs. The pound rebounded from an eight-month low amid a return of global risk appetite as investors assessed whether the Bank of England will follow the Federal Reserve’s hawkish tone later Thursday. The yield differential between 10-year German and Italian debt narrowed to its tightest since April. Norway’s krone advanced after Norges Bank raised its policy rate in line with expectations and signaled a faster pace of tightening over the coming years. The franc whipsawed as the Swiss National Bank kept its policy rate and deposit rate at record lows, as expected, and reiterated its pledge to wage currency market interventions. The yen fell as a unit of China Evergrande said it had reached an agreement with bond holders over an interest payment, reducing demand for haven assets. Turkey’s lira slumped toa record low against the dollar after the central bank unexpectedly cut interest rates. In commodities, crude futures drifted lower after a rangebound Asia session. WTI was 0.25% lower, trading near $72; Brent dips into the red, so far holding above $76. Spot gold adds $3.5, gentle reversing Asia’s losses to trade near $1,771/oz. Base metals are well bid with LME aluminum leading gains. Bitcoin steadied just below $44,000. Looking at the day ahead, we get the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Market Snapshot S&P 500 futures up 0.7% to 4,413.75 STOXX Europe 600 up 1.1% to 468.32 MXAP up 0.5% to 200.57 MXAPJ up 0.9% to 645.76 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 1.2% to 24,510.98 Shanghai Composite up 0.4% to 3,642.22 Sensex up 1.4% to 59,728.37 Australia S&P/ASX 200 up 1.0% to 7,370.22 Kospi down 0.4% to 3,127.58 German 10Y yield fell 5.6 bps to -0.306% Euro up 0.4% to $1.1728 Brent Futures up 0.3% to $76.39/bbl Gold spot up 0.0% to $1,768.25 U.S. Dollar Index down 0.33% to 93.16 Top Overnight News from Bloomberg Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds China’s central bank net-injected the most short- term liquidity in eight months into the financial system, with markets roiled by concerns over China Evergrande Group’s debt crisis Europe’s worst energy crisis in decades could drag deep into the cold months as Russia is unlikely to boost shipments until at least November Business activity in the euro area “markedly” lost momentum in September after demand peaked over the summer and supply chain bottlenecks hurt both services and manufacturers. Surveys of purchasing managers by IHS Markit showed growth in both sectors slowing more than expected, bringing overall activity to a five-month low. Input costs, meanwhile, surged to the highest in 21 years, according to the report The U.K. private sector had its weakest month since the height of the winter lockdown and inflation pressures escalated in September, adding to evidence that the recovery is running into significant headwinds, IHS Markit said The U.K.’s record- breaking debut green bond sale has given debt chief Robert Stheeman conviction on the benefits of an environmental borrowing program. The 10 billion-pound ($13.7 billion) deal this week was the biggest-ever ethical bond sale and the country is already planning another offering next month A more detailed look at global markets courtesy of Newsquaw Asian equity markets traded mostly positive as the region took its cue from the gains in US with the improved global sentiment spurred by some easing of Evergrande concerns and with stocks also unfazed by the marginally more hawkish than anticipated FOMC announcement (detailed above). ASX 200 (+1.0%) was underpinned by outperformance in the commodity-related sectors and strength in defensives, which have more than atoned for the losses in tech and financials, as well as helped markets overlook the record daily COVID-19 infections in Victoria state. Hang Seng (+0.7%) and Shanghai Comp. (+0.6%) were also positive after another respectable liquidity operation by the PBoC and with some relief in Evergrande shares which saw early gains of more than 30% after recent reports suggested a potential restructuring by China’s government and with the Co. Chairman noting that the top priority is to help wealth investors redeem their products, although the majority of the Evergrande gains were then pared and unit China Evergrande New Energy Vehicle fully retraced the initial double-digit advances. KOSPI (-0.5%) was the laggard as it played catch up to the recent losses on its first trading day of the week and amid concerns that COVID cases could surge following the holiday period, while Japanese markets were closed in observance of the Autumnal Equinox Day. China Pumps $17 Billion Into System Amid Evergrande Concerns China Stocks From Property to Tech Jump on Evergrande Respite Philippines Holds Key Rate to Spur Growth Amid Higher Prices Taiwan’s Trade Deal Application Sets Up Showdown With China Top Asian News European equities (Stoxx 600 +0.9%) trade on the front-foot and have extended gains since the cash open with the Stoxx 600 now higher on the week after Monday’s heavy losses. From a macro perspective, price action in Europe has been undeterred by a slowdown in Eurozone PMIs which saw the composite metric slip to 56.1 from 59.0 (exp. 58.5) with IHS Markit noting “an unwelcome combination of sharply slower economic growth and steeply rising prices.” Instead, stocks in the region have taken the cue from a firmer US and Asia-Pac handover with performance in Chinese markets aided by further liquidity injections by the PBoC. Some positivity has also been observed on the Evergrande front amid mounting expectations of a potential restructuring at the company. That said, at the time of writing, it remains unclear what the company’s intentions are for repaying its USD 83.5mln onshore coupon payment. Note, ING highlights that “missing that payment today would still leave a 30-day grace period before this is registered as a default”. The most recent reports via WSJ indicate that Chinese authorities are asking local governments to begin preparations for the potential downfall of Evergrande; however, the article highlights that this is a last resort and Beijing is reluctant to step in. Nonetheless, this article has taken the shine off the mornings risk appetite, though we do remain firmer on the session. Stateside, as the dust settles on yesterday’s FOMC announcement, futures are firmer with outperformance in the RTY (+0.8% vs. ES +0.7%). Sectors in Europe are higher across the board with outperformance in Tech and Autos with the latter aided by gains in Faurecia (+4.6%) who sit at the top of the Stoxx 600 after making an unsurprising cut to its guidance, which will at least provide some clarity on the Co.’s near-term future; in sympathy, Valeo (+6.6) is also a notable gainer in the region. To the downside, Entain (+2.6%) sit at the foot of the Stoxx 600 after recent strong gains with the latest newsflow surrounding the Co. noting that MGM Resorts is considering different methods to acquire control of the BetMGM online gambling business JV, following the DraftKings offer for Entain, according to sources. The agreement between Entain and MGM gives MGM the ability to block any deal with competing businesses; MGM officials believe this grants the leverage to take full control of BetMGM without spending much. Top European News BOE Confronts Rising Prices, Slower Growth: Decision Guide La Banque Postale Eyes Retail, Asset Management M&A in Europe Activist Bluebell Raises Pressure on Glaxo CEO Walmsley Norway Delivers Rate Lift-Off With Next Hike Set for December In FX, not much bang for the Buck even though the FOMC matched the most hawkish market expectations and Fed chair Powell arguably went further by concluding in the post-meeting press conference that substantial progress on the lagging labour front is all but done. Hence, assuming the economy remains on course, tapering could start as soon as November and be completed my the middle of 2022, though he continued to play down tightening prospects irrespective of the more hawkish trajectory implied by the latest SEP dot plots that are now skewed towards at least one hike next year and a cumulative seven over the forecast horizon. However, the Greenback only managed to grind out marginally higher highs overnight, with the index reaching 93.526 vs 93.517 at best yesterday before retreating quite sharply and quickly to 93.138 in advance of jobless claims and Markit’s flash PMIs. CAD/NZD/AUD - The Loonie is leading the comeback charge in major circles and only partially assisted by WTI keeping a firm bid mostly beyond Usd 72/brl, and Usd/Cad may remain contained within 1.2796-50 ahead of Canadian retail sales given decent option expiry interest nearby and protecting the downside (1 bn between 1.2650-65 and 2.7 bn from 1.2620-00). Meanwhile, the Kiwi has secured a firmer grip on the 0.7000 handle to test 0.7050 pre-NZ trade and the Aussie is looking much more comfortable beyond 0.7250 amidst signs of improvement in the flash PMIs, albeit with the services and composite headline indices still some way short of the 50.0 mark. NOK/GBP/EUR/CHF - All firmer, and the Norwegian Crown outperforming following confirmation of the start of rate normalisation by the Norges Bank that also underscored another 25 bp hike in December and further tightening via a loftier rate path. Eur/Nok encountered some support around 10.1000 for a while, but is now below, while the Pound has rebounded against the Dollar and Euro in the run up to the BoE at midday. Cable is back up around 1.3770 and Eur/Gbp circa 0.8580 as Eur/Usd hovers in the low 1.1700 area eyeing multiple and a couple of huge option expiries (at the 1.1700 strike in 4.1 bn, 1.1730 in 1 bn, 1.1745-55 totalling 2.7 bn and 1.8 bn from 1.1790-1.1800). Note, Eurozone and UK flash PMIs did not live up to their name, but hardly impacted. Elsewhere, the Franc is lagging either side of 0.9250 vs the Buck and 1.0835 against the Euro on the back of a dovish SNB Quarterly Review that retained a high Chf valuation and necessity to maintain NIRP, with only minor change in the ordering of the language surrounding intervention. JPY - The Yen is struggling to keep its head afloat of 110.00 vs the Greenback as Treasury yields rebound and risk sentiment remains bullish pre-Japanese CPI and in thinner trading conditions due to the Autumn Equinox holiday. In commodities, WTI and Brent have been choppy throughout the morning in-spite of the broadly constructive risk appetite. Benchmarks spent much of the morning in proximity to the unchanged mark but the most recent Evergrande developments, via WSJ, have dampened sentiment and sent WTI and Brent back into negative territory for the session and printing incremental fresh lows at the time of publication. Back to crude, newsflow has once again centred around energy ministry commentary with Iraq making clear that oil exports will continue to increase. Elsewhere, gas remains at the forefront of focus particularly in the UK/Europe but developments today have been somewhat incremental. On the subject, Citi writes that Asia and Europe Nat. Gas prices could reach USD 100/MMBtu of USD 580/BOE in the winter, under their tail-risk scenario. For metals, its very much a case of more of the same with base-metals supportive, albeit off-best given Evergrande, after a robust APAC session post-FOMC. Given the gas issues, desks highlight that some companies are being forced to suspend/reduce production of items such as steel in Asian/European markets, a narrative that could become pertinent for broader prices if the situation continues. Elsewhere, spot gold and silver are both modestly firmer but remain well within the range of yesterday’s session and are yet to recovery from the pressure seen in wake of the FOMC. US Event Calendar 8:30am: Sept. Initial Jobless Claims, est. 320,000, prior 332,000; Continuing Claims, est. 2.6m, prior 2.67m 8:30am: Aug. Chicago Fed Nat Activity Index, est. 0.50, prior 0.53 9:45am: Sept. Markit US Composite PMI, prior 55.4 9:45am: Sept. Markit US Services PMI, est. 54.9, prior 55.1 9:45am: Sept. Markit US Manufacturing PMI, est. 61.0, prior 61.1 11am: Sept. Kansas City Fed Manf. Activity, est. 25, prior 29 12pm: 2Q US Household Change in Net Wor, prior $5t DB's Jim Reid concludes the overnight wrap My wife was at a parents event at school last night so I had to read three lots of bedtime stories just as the Fed were announcing their policy decision. Peppa Pig, Biff and Kipper, and somebody called Wonder Kid were interspersed with Powell’s press conference live on my phone. It’s fair to say the kids weren’t that impressed by the dot plot and just wanted to join them up. The twins (just turned 4) got their first reading book homework this week and it was a bit sad that one of them was deemed ready to have one with words whereas the other one only pictures. The latter was very upset and cried that his brother had words and he didn’t. That should create even more competitive tension! Back to the dots and yesterday’s Fed meeting was on the hawkish side in terms of the dots and also in terms of Powell’s confidence that the taper could be complete by mid-2022. Powell said that the Fed could begin tapering bond purchases as soon as the November FOMC meeting, in line with our US economists’ forecasts. He left some room for uncertainty, saying they would taper only “If the economy continues to progress broadly in line with expectations, and also the overall situation is appropriate for this.” However he made clear that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff.” The quarterly “dot plot” showed that the 18 FOMC officials were split on whether to start raising rates next year or not. In June, the median dot indicated no rate increases until 2023, but now 6 members see a 25bps raise next year and 3 members see two such hikes. Their inflation forecasts were also revised up and DB’s Matt Luzzetti writes in his FOMC review (link here) that “If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022.” Markets took the overall meeting very much in its stride with the biggest impact probably being a yield curve flattening even if US 10yr Treasury yields traded in just over a 4bp range yesterday and finishing -2.2bps lower at 1.301%. The 5y30y curve flattened -6.7bps to 95.6bps, its flattest level since August 2020, while the 2y10y curve was -4.2bps flatter. So the market seems to believe the more hawkish the Fed gets the more likely they’ll control inflation and/or choke the recovery. The puzzle is that even if the dots are correct, real Fed funds should still be negative and very accommodative historically for all of the forecasting period. As such the market has a very dim view of the ability of the economy to withstand rate hikes or alternatively that the QE technicals are overpowering everything at the moment. In equities, the S&P 500 was up nearly +1.0% 15 minutes prior to the Fed, and then rallied a further 0.5% in the immediate aftermath before a late dip look it back to +0.95%. The late dip meant that the S&P still has not seen a 1% up day since July 23. The index’s rise was driven by cyclicals in particular with energy (+3.17%), semiconductors (-2.20%), and banks (+2.13%) leading the way. Asian markets are mostly trading higher this morning with the Hang Seng (+0.69%), Shanghai Comp (+0.58%), ASX (+1.03%) and India’s Nifty (+0.81%) all up. The Kospi (-0.36%) is trading lower though and is still catching up from the early week holidays. Japan’s markets are closed for a holiday today. Futures on the S&P 500 are up +0.25% while those on the Stoxx 50 are up +0.49%. There is no new news on the Evergrande debt crisis however markets participants are likely to pay attention to whether the group is able to make interest rate payment on its 5 year dollar note today after the group had said yesterday that it resolved a domestic bond coupon by negotiations which was also due today. As we highlighted in our CoTD flash poll conducted earlier this week, market participants are not too worried about a wider fallout from the Evergrande crisis and even the Hang Seng Properties index is up +3.93% this morning and is largely back at the levels before the big Monday sell-off of -6.69%. Overnight we have received flash PMIs for Australia which improved as parts of the country have eased the coronavirus restrictions. The services reading came in at 44.9 (vs. 42.9 last month) and the manufacturing print was even stronger at 57.3 (vs. 52.0 last month). Japan’s flash PMIs will be out tomorrow due to today’s holiday. Ahead of the Fed, markets had continued to rebound from their declines earlier in the week, with Europe’s STOXX 600 gaining +0.99% to narrowly put the index in positive territory for the week. This continues the theme of a relative outperformance among European equities compared to the US, with the STOXX 600 having outpaced the S&P 500 for 5 consecutive sessions now, though obviously by a slim margin yesterday. Sovereign bonds in Europe also posted gains, with yields on 10yr bunds (-0.7bps), OATs (-1.0bps) and BTPs (-3.2bps) all moving lower. Furthermore, there was another tightening in peripheral spreads, with the gap in Italian 10yr yields over bunds falling to 98.8bps yesterday, less than half a basis point away from its tightest level since early April. Moving to fiscal and with Democrats seemingly unable to pass the $3.5 trillion Biden budget plan by Monday, when the House is set to vote on the bipartisan infrastructure bill, Republican leadership is calling on their members to vote against the bipartisan bill in hopes of delaying the process further. While the there is still a high likelihood the measure will eventually get passed, time is becoming a factor. Congress now has just over a week to get a government funding bill through both chambers of congress as well as raise the debt ceiling by next month. Republicans have told Democrats to do the latter in a partisan manner and include it in the reconciliation process which could mean that a significant portion of the Biden economic agenda – mostly encapsulated in the $3.5 trillion over 10 year budget – may have to be cut down to get the entire Democratic caucus on board. Looking ahead, an event to watch out for today will be the Bank of England’s policy decision at 12:00 London time, where our economists write (link here) that they expect no change in the policy settings. However, they do expect a reaffirmation of the BoE’s updated forward guidance that some tightening will be needed over the next few years to keep inflation in check, even if it’s too early to expect a further hawkish pivot at this stage. Staying on the UK, two further energy suppliers (Avro Energy and Green Supplier) ceased trading yesterday amidst the surge in gas prices, with the two supplying 2.9% of domestic customers between them. We have actually seen a modest fall in European natural gas prices over the last couple of days, with the benchmark future down -4.81% since its close on Monday, although it’s worth noting that still leaves them up +75.90% since the start of August alone. There wasn’t much data to speak of yesterday, though US existing home sales fell to an annualised rate of 5.88 in August (vs. 5.89m expected). Separately, the European Commission’s advance consumer confidence reading for the Euro Area unexpectedly rose to -4.0 in September (vs. -5.9 expected). To the day ahead now, the data highlights include the September flash PMIs from around the world, while in the US there’s the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Tyler Durden Thu, 09/23/2021 - 08:13.....»»

Category: blogSource: zerohedgeSep 23rd, 2021

US stocks gain after China tells Evergrande to pay its debts and avoid default

US stocks gained on Thursday as concerns around Evergrande's debt crisis continued to cool. Drew Angerer/Getty Images US stocks gained on Thursday, continuing its rebound from Monday's Evergrande-induced sell-off.China told Evergrande to pay its upcoming US-dollar denominated debt payments and avoid default, according to a Bloomberg report.At the same time, Beijing is telling local officials across the country to prepare for a "possible storm" related to the Evergrande debt crisis, The Wall Street Journal reported.Sign up here for our daily newsletter, 10 Things Before the Opening Bell.US stocks edged higher in Thursday trades, continuing the rebound from Monday's Evergrande-induced sell-off in which the Dow Jones fell nearly 1,000 points.The gain on Thursday came after Bloomberg reported that China told Evergrande to pay its upcoming debt payments on US-dollar denominated bonds, and to avoid default. That may be giving investors a reason for relief as the S&P 500 trades just ten points below last Friday's levels.But longer-term, Evergrande's $300 billion debt problem isn't going away, and Beijing is warning local officials across the country to prepare for a "possible storm" related to a potential default of the country's second largest property developer, The Wall Street Journal reported.Here's where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:S&P 500: 4,418.40, up 0.52%Dow Jones Industrial Average: 34,529.93, up 0.79% (271.61 points)Nasdaq Composite: 14,951.28, up 0.37%US weekly jobless claims rose to 351,000 last week as the hiring recovery continued to move forward. That's slightly higher than economist expectations of 320,000. Continuing claims increased 2.85 million for the week that ended September 11.Cathie Wood said at a Morningstar investment conference on Wednesday that Ark Invest would sell its position in Tesla if the stock hit its 5-year price target of $3,000 within the next year and little changes to its long-term thesis. Wood also reiterated her view that the stock market is not in a bubble.Altcoins surged on Thursday, with cosmos, dot, and sol jumping sharply as the Evergrande debt crisis continues to cool down. Coinbase wants to strengthen its legal and compliance team as it steps up collaboration with crypto regulators. The move comes after its recent spat with the SEC regarding a lending product. Oil prices moved higher. West Texas Intermediate crude jumped as much as 0.18%, to $72.36 per barrel. Brent crude, oil's international benchmark, jumped 0.13%, to $76.29 per barrel.Gold fell as much as 1.23%, to $1,757.00 per ounce.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 23rd, 2021

The labor shortage is actually 3 mismatches between workers and employers

The Delta wave has kept the labor shortage going into the fall. There are three unresolved "mismatches" between what workers and companies want. A man hands his resume to an employer at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds. Paul Hennessy/SOPA Images/LightRocket/Getty Images Reports of a labor shortage persist, even as unemployment benefits ended and the US continues to reopen. Some of the driving factors behind the labor shortage remain mismatches across the economy. Available workers might not fit open jobs, or want more from work. They also may have just moved. See more stories on Insider's business page. A Family Dollar briefly closed in Nebraska after its whole staff quit over high turnover and low wages. A coffee shop owner in Iowa raised wages to $15 to lure in workers. A burger chain owner says restaurants are in a bidding war for workers.It seems like every day there's yet another story about the effects the persistent labor shortage is having on businesses.Ending federal unemployment benefits hasn't seemed to plug it up yet, Bloomberg reports. In fact, letting those benefits lapse may actually deal a large blow to consumer spending and incomes, according to a report from the left-leaning Economic Policy Institute.There are three major disconnects that define this mystery around open jobs, and why people aren't filling them. Economists call these "mismatches," and they've been driving labor crunches for months, as Insider reported in July. None seems to have faded yet.(1) There's still a skills mismatch - and higher-skilled workers might be filtered outIn June, the right-leaning Chamber of Commerce sounded the alarm on a skills gap, arguing for the need to invest in job-training programs and to equip applicants with the skills needed to fill open roles.In an August note, economists at Morgan Stanley led by Ellen Zentner wrote: "Differences in skills and qualifications limit the extent to which workers can easily transition to high-demand industries, leading to a mismatch of labor supply and demand."However, there's another wrinkle: The Wall Street Journal reported that employers are increasingly leaning on hiring software that filters out applicants based on words that may or may not appear on their resumes. But those keywords might filter out someone with tangentially related skills, and keep out someone looking to job switch.Erica Groshen, senior economics advisor at the Cornell University School of Industrial and Labor Relations, told Insider that many employers may also be filtering out applicants who don't have four-year degrees."This is a real problem for the labor market, because less than half of US workers have a college degree, it's not changing rapidly," Groshen said. "And yet we have many, many workers who were very productive at previous jobs, who have learned a lot of skills on those jobs."(2) People are moving and leaving open jobsWhile big cities like New York and San Francisco may be on the rebound, people did move around within metro areas - and many don't want to start commuting again. In fact, they're making big investments in homes without factoring in commute time as much as pre-pandemic.And "exurbs," rural areas and small towns outside of big-city suburbs, have risen in popularity during the pandemic; the cities people have moved to have more professional roles that need filling, according to Morgan Stanley. Meanwhile, the big cities - which are now seeing red-hot housing prices - need service workers. Those economists say migration might need to settle down before the geographic mismatch ends. They also warned that, after the 2008 financial crisis, "regional misallocation of labor was one of the reasons that employment was slow to recover."(3) Workers have higher expectations and want more than what's availableFor four months now, workers have been quitting at record rates. Even leisure and hospitality, the sector largely leading the recovery, is seeing workers leave en masse and push up wages as employers get more eager to lure them back. In a survey of 1,800 unemployed job seekers by FlexJobs, 48% of respondents said they were frustrated with the search because they weren't finding the right positions - and many were only finding openings for low-wage roles. With the Delta variant still pummeling the US, taking a job now isn't just about pay or benefits (although both are compelling workers). It's also a health and a childcare consideration - will the job offset childcare costs, or be flexible enough when school closes due to an outbreak?As Rep. Alexandria Ocasio-Cortez wrote on Twitter: "Would you sign up for a job to get attacked by unvaccinated tourists for $15/hr? For no healthcare but max risk? Most wouldn't."Expanded Coverage Module: what-is-the-labor-shortage-and-how-long-will-it-lastRead the original article on Business Insider.....»»

Category: worldSource: nytSep 22nd, 2021

CPC approves rezoning to turn Blood Center into life science hub

The City Planning Commission today approved by vote of 8 to 2 the New York Blood Center’s ULURP application for an applied life sciences hub called Center East on the Upper East Side that will serve as a key driver of the city’s life science innovation ecosystem and a key... The post CPC approves rezoning to turn Blood Center into life science hub appeared first on Real Estate Weekly. The City Planning Commission today approved by vote of 8 to 2 the New York Blood Center’s ULURP application for an applied life sciences hub called Center East on the Upper East Side that will serve as a key driver of the city’s life science innovation ecosystem and a key part of its pandemic response infrastructure. The Blood Center’s project is one of the key rezonings left under Mayor de Blasio’s administration. Per the city’s land use process, the City Council will now consider a project that will see the New York Blood Center is partner with Longfellow Real Estate to transform its East 67th Street headquarters into a 600,000 s/f life science campus. Called Center East, the hub will replace NYBC’s existing facility with a state-of-the-art center anchored by NYBC, which supplies life-saving blood products and services to nearly every hospital across the five boroughs and delivers stem cell products to over 45 countries worldwide. “This is exactly the project our city needs right now. Center East will position New York to be a life science innovation hub, create jobs, stimulate billions in economic output annually, and open career opportunities for local students and young professionals. Our vision for a state-of-the-art life science facility will not only ensure the nonprofit Blood Center continues to provide safe, affordable blood services to the region’s hospitals, but enable the center to significantly expand its life-saving research on COVID-19 and blood-related diseases in collaboration with institutions and biotechnology partners all under the same roof,” said Rob Purvis, Executive Vice President and Chief of Staff, New York Blood Center. However, the project has seen opposition from the local community which has criticized its height and residential to commercial zoning it requires. Among the loudest voices against the plan is Council member Kallos, who told the City Planning Commission over the summer, “The New York Blood Center has been seeking to build a tall tower for as long as I can remember, for my entire career in politics, back to when I first started in 2006 on Community Board 8, and again in 2016. At every stage, their aggressive proposals have been rejected by elected officials and the local community.” Kallos said that the community doesn’t have a problem with expansion within current zoning, which would permit expanding the current three-story building to seven stories. However, earlier this month, a grassroots coalition representing thousands of New Yorkers endorsed the Blood Center’s proposal. Its members—including Laborers’ Local 79; Greater New York LECET (Laborers-Employers Cooperation and Education Trust); Building & Construction Trades Council of Greater New York; Urban Upbound; Community Voices Heard, Baruch Computing and Technology Center; and The Knowledge House—all signed a letter urging local Council Member Ben Kallos and the City Council to advance the project. GARY LABARBERA Gary LaBarbera, President of the Building and Construction Trades Council, said, “The New York construction industry lost 74,000 jobs and $9.8 billion in economic activity last year during the shutdowns triggered by the pandemic. Projects like Center East are critical to the future of New York City as we look to rebound, and build back stronger than ever. “The building and construction trade industry represents 20 percent of the city’s economy, 10 percent of jobs and 5 percent of wages. While it is disheartening to hear that the NIMBY voices are once again putting themselves and their own personal interests ahead of the greater good, it’s certainly not surprising or new. Center East will generate more than 1,500 full-time construction jobs and $1.1 billion in economic output annually. Our city needs this project now.”   CARLO SCISSURA Carlo Scissura, New York Building Congress President and CEO, added, “The New York Blood Center is a crucial hub for New York’s life science industry, and given the heightened need following the COVID-19 pandemic, now is the time to create a purpose-built center that will help the Blood Center’s important mission. New York City boasts industry-leading life science institutions, but we have yet to reach our full potential as one of the country’s leading life sciences hubs.” The post CPC approves rezoning to turn Blood Center into life science hub appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklySep 22nd, 2021

Bet on These 3 MedTech Growth Stocks for 2021 & Beyond

Stocks like West Pharmaceutical Services (WST), IDEXX Laboratories (IDXX) and Align Technology (ALGN) make great picks for the long term. The economic mayhem brought on by the coronavirus pandemic is barely showing any signs of easing. After a few months of some stability in the first half of 2021, the surge in the highly-transmissible Delta variant is haunting investors.Going by a Reuters report, the U.S. economic rebound has been impeded in the third quarter, partly because of the spread of the Delta variant. However, the growth outlook still stands at 4.2% for 2022 and 2.3% for 2023.Meanwhile, despite several temporary phases of market recovery over the past couple of months, the pessimism across major pandemic-battered industries in the United States is still looming large.Brighter Picture for MedTechOn Sep 9, the new mandate announced by President Joe Biden unveiled a series of steps to combat the rising pandemic concerns, including the announcement of a forthcoming federal rule that all businesses with 100 or more employees have to ensure that every worker is either vaccinated for COVID-19 or will have to submit weekly coronavirus testing results.Once the rule is implemented, several MedTech stocks, particularly companies in the field of testing and vaccines, are expected to report robust business gains. Also, this rule is expected to ease away the Delta-induced fear in the economy, which might again increase hospital and physician office visits, boosting demand for non-COVID elective procedures.Furthermore, a report by World Bank noted that the U.S. economy has been bolstered by massive fiscal support and growth is expected to reach 6.8% in 2021, the fastest pace since 1984.MedTech: A Comparatively Safe BetWhile theories about the impending new waves of coronavirus are still looming large, the MedTech space is expected to remain resilient on the transformation of business models according to changing demand pattern, inclination toward digital healthcare and a number of fiscal stimulus packages that the government has introduced of late.Despite the pandemic-induced crisis, many MedTech companies have raised their 2021 outlook on rise in diagnostic testing demand.In this line, Quest Diagnostics Incorporated DGX recently raised its full-year projection significantly. The company’s revenues for 2021 are now expected in the range of $9.84 billion to $10.09 billion versus the prior view of $9.54 billion to $9.79 billion.Ideal Strategy for MedTech InvestorsAmid the pandemic-induced market turmoil, when volatility peaks, it is always prudent to adopt a longer-term investing strategy and pick some growth-focused MedTech stocks which are fundamentally strong.Once the pandemic fades, these stocks with a robust long-term growth potential along with strong and sustainable financial performance can be the best bets.Here are a few MedTech companies with a Growth Score of A or B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.3 Stocks to Bet OnWest Pharmaceutical Services, Inc. WST delivered robust performance in the second quarter of 2021 aided by solid organic sales growth in both of its base businesses and improving demand for products related to COVID-19 vaccines.  It continues to witness strong uptake of HVP components, which include Westar, FluroTec, Envision and NovaPure offerings, and Daikyo’s Crystal Zenith. A raised financial outlook for 2021 instills further optimism in the stock. Net sales for full-year 2021 are projected between $2.76 billion and $2.79 billion (up from the prior range of $2.63-$2.65 billion), while adjusted earnings per share for 2021 are anticipated in the band of $8.05 to $8.20 (up from the previous range of $6.95-$7.10).West Pharmaceutical Services, Inc. Price West Pharmaceutical Services, Inc. price | West Pharmaceutical Services, Inc. QuoteThis Zacks Rank #1 stock has a Growth Score of B. The stock’s return on equity (ROE) stands at an impressive 28.6% versus the industry’s 14.1%. In 2021, the company’s earnings are expected to grow 72.7%. It has an expected long-term earnings growth rate of 27.3%.IDEXX Laboratories, Inc.’s IDXX top line in the second quarter was driven by strong sales at the CAG, LPD and Water businesses. The company witnessed sturdy gains in CAG Diagnostics’ recurring revenues, supported by sustained strong global trends in pet healthcare. IDEXX, boosted by the ongoing business recovery and strong performance in the last-reported quarter, has raised its financial outlook for 2021.The company currently projects revenue growth for the year in the range of 17-18.5% on a reported and 14.5-16% on an organic basis. Further, IDEXX projects full-year earnings per share growth of 22-25% on a reported basis.IDEXX Laboratories, Inc. Price IDEXX Laboratories, Inc. price | IDEXX Laboratories, Inc. QuoteThis Zacks Rank #2 stock has a Growth Score of B. The stock’s Price/Sales ratio stands at 18.5% versus the industry’s 6.3%. In 2021, the company’s earnings are expected to grow 24.4%. It has an expected long-term earnings growth rate of 19.9%.Align Technology, Inc. ALGN exited the second quarter of 2021 with better-than-expected results despite the challenging business environment. Continued adoption of the company’s digital platform has also been a tailwind. The company is witnessing strong global growth in iTero business across all regions on the continued adoption of the iTero Element 5D Plus Series of next-generation scanners and imaging systems. Align Technology, on the back of its impressive performance, has raised its financial outlook for 2021. The company now expects revenue growth for the year in the range of 56-60% from 2020. Further, it expects revenue growth in the second half of 2021 to exceed the mid-point of its long-term operating model target of 20% to 30%.Align Technology, Inc. Price Align Technology, Inc. price | Align Technology, Inc. QuoteThis Zacks Rank #2 stock has a Growth Score of A. The stock’s Price/Sales ratio stands at a very impressive 16.4% versus the industry’s 3.3%. In 2021, the company’s earnings are expected to grow 109.3%. It has an expected long-term earnings growth rate of 26.6%. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quest Diagnostics Incorporated (DGX): Free Stock Analysis Report Align Technology, Inc. (ALGN): Free Stock Analysis Report IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 22nd, 2021

Futures Bounce On Evergrande Reprieve With Fed Looming

Futures Bounce On Evergrande Reprieve With Fed Looming Despite today's looming hawkish FOMC meeting in which Powell is widely expected to unveil that tapering is set to begin as soon as November and where the Fed's dot plot may signal one rate hike in 2022, futures climbed as investor concerns over China's Evergrande eased after the property developer negotiated a domestic bond payment deal. Commodities rallied while the dollar was steady. Contracts on the S&P 500 and Nasdaq 100 flipped from losses to gains as China’s central bank boosted liquidity when it injected a gross 120BN in yuan, the most since January... ... and investors mulled a vaguely-worded statement from the troubled developer about an interest payment.  S&P 500 E-minis were up 23.0 points, or 0.53%, at 7:30 a.m. ET. Dow E-minis were up 199 points, or 0.60%, and Nasdaq 100 E-minis were up 44.00 points, or 0.29%. Among individual stocks, Fedex fell 5.8% after the delivery company cut its profit outlook on higher costs and stalled growth in shipments. Morgan Stanley says it sees the company’s 1Q issues getting “tougher from here.” Commodity-linked oil and metal stocks led gains in premarket trade, while a slight rise in Treasury yields supported major banks. However, most sectors were nursing steep losses in recent sessions. Here are some of the biggest U.S. movers: Adobe (ADBE US) down 3.1% after 3Q update disappointed the high expectations of investors, though the broader picture still looks solid, Morgan Stanley said in a note Freeport McMoRan (FCX US), Cleveland- Cliffs (CLF US), Alcoa (AA US) and U.S. Steel (X US) up 2%-3% premarket, following the path of global peers as iron ore prices in China rallied Aethlon Medical (AEMD US) and Exela Technologies (XELAU US) advance along with other retail traders’ favorites in the U.S. premarket session. Aethlon jumps 21%; Exela up 8.3% Other so-called meme stocks also rise: ContextLogic +1%; Clover Health +0.9%; Naked Brand +0.9%; AMC +0.5% ReWalk Robotics slumps 18% in U.S. premarket trading, a day after nearly doubling in value Stitch Fix (SFIX US) rises 15.7% in light volume after the personal styling company’s 4Q profit and sales blew past analysts’ expectations Hyatt Hotels (H US) seen opening lower after the company launches a seven-million-share stock offering Summit Therapeutics (SMMT US) shares fell as much as 17% in Tuesday extended trading after it said the FDA doesn’t agree with the change to the primary endpoint that has been implemented in the ongoing Phase III Ri-CoDIFy studies when combining the studies Marin Software (MRIN US) surged more than 75% Tuesday postmarket after signing a new revenue-sharing agreement with Google to develop its enterprise technology platforms and software products The S&P 500 had fallen for 10 of the past 12 sessions since hitting a record high, as fears of an Evergrande default exacerbated seasonally weak trends and saw investors pull out of stocks trading at lofty valuations. The Nasdaq fell the least among its peers in recent sessions, as investors pivoted back into big technology names that had proven resilient through the pandemic. Focus now turns to the Fed's decision, due at 2 p.m. ET where officials are expected to signal a start to scaling down monthly bond purchases (see our preview here).  The Fed meeting comes after a period of market volatility stoked by Evergrande’s woes. China’s wider property-sector curbs are also feeding into concerns about a slowdown in the economic recovery from the pandemic. “Chair Jerome Powell could hint at the tapering approaching shortly,” said Sébastien Barbé, a strategist at Credit Agricole CIB. “However, given the current uncertainty factors (China property market, Covid, pace of global slowdown), the Fed should remain cautious when it comes to withdrawing liquidity support.” Meanwhile, confirming what Ray Dalio said that the taper will just bring more QE, Governing Council member Madis Muller said the  European Central Bank may boost its regular asset purchases once the pandemic-era emergency stimulus comes to an end. “Dovish signals could unwind some of the greenback’s gains while offering relief to stock markets,” Han Tan, chief market analyst at Exinity Group, wrote in emailed comments. A “hawkish shift would jolt markets, potentially pushing Treasury yields and the dollar past the upper bound of recent ranges, while gold and equities would sell off hunting down the next levels of support.” China avoided a major selloff as trading resumed following a holiday, after the country’s central bank boosted its injection of short-term cash into the financial system. MSCI’s Asia-Pacific index declined for a third day, dragged lower by Japan. Stocks were also higher in Europe. Basic resources - which bounced from a seven month low - and energy were among the leading gainers in the Stoxx Europe 600 index as commodity prices steadied after Beijing moved to contain fears of a spiraling debt crisis. Entain Plc rose more than 7%, extending Tuesday’s gain as it confirmed it received a takeover proposal from DraftKings Inc. Peer Flutter Entertainment Plc climbed after settling a legal dispute.  Here are some of the biggest European movers today: Entain shares jump as much as 11% after DraftKings Inc. offered to acquire the U.K. gambling company for about $22.4 billion. Vivendi rises as much as 3.1% in Paris, after Tuesday’s spinoff of Universal Music Group. Legrand climbs as much as 2.1% after Exane BNP Paribas upgrades to outperform and raises PT to a Street-high of EU135. Orpea shares falls as much as 2.9%, after delivering 1H results that Jefferies (buy) says were a “touch” below consensus. Bechtle slides as much as 5.1% after Metzler downgrades to hold from buy, saying persistent supply chain problems seem to be weighing on growth. Sopra Steria drops as much as 4.1% after Stifel initiates coverage with a sell, citing caution on company’s M&A strategy Despite the Evergrande announcement, Asian stocks headed for their longest losing streak in more than a month amid continued China-related concerns, with traders also eying policy decisions from major central banks. The MSCI Asia Pacific Index dropped as much as 0.7% in its third day of declines, with TSMC and Keyence the biggest drags. China’s CSI 300 tumbled as much as 1.9% as the local market reopened following a two-day holiday. However, the gauge came off lows after an Evergrande unit said it will make a bond interest payment and as China’s central bank boosted liquidity.  Taiwan’s equity benchmark led losses in Asia on Wednesday, dragged by TSMC after a two-day holiday, while markets in Hong Kong and South Korea were closed. Key stock gauges in Australia, Indonesia and Vietnam rose “A liquidity injection from the People’s Bank of China accompanied the Evergrande announcement, which only served to bolster sentiment further,” according to DailyFX’s Thomas Westwater and Daniel Dubrovsky. “For now, it appears that market-wide contagion risk linked to a potential Evergrande collapse is off the table.” Japanese equities fell for a second day amid global concern over China’s real-estate sector, as the Bank of Japan held its key stimulus tools in place while flagging pressures on the economy. Electronics makers were the biggest drag on the Topix, which declined 1%. Daikin and Fanuc were the largest contributors to a 0.7% loss in the Nikkei 225. The BOJ had been expected to maintain its policy levers ahead of next week’s key ruling party election. Traders are keenly awaiting the Federal Reserve’s decision due later for clues on the U.S. central banks plan for tapering stimulus. “Markets for some time have been convinced that the BOJ has reached the end of the line on normalization and will remain in a holding pattern on policy until at least April 2023 when Governor Kuroda is scheduled to leave,” UOB economist Alvin Liew wrote in a note. “Attention for the BOJ will now likely shift to dealing with the long-term climate change issues.” In the despotic lockdown regime that is Australia, the S&P/ASX 200 index rose 0.3% to close at 7,296.90, reversing an early decline in a rally led by mining and energy stocks. Banks closed lower for the fourth day in a row. Champion Iron was among the top performers after it was upgraded at Citi. IAG was among the worst performers after an earthquake caused damage to buildings in Melbourne. In New Zealand, the S&P/NZX 50 index rose 0.3% to 13,215.80 In FX, commodity currencies rallied as concerns about China Evergrande Group’s debt troubles eased as China’s central bank boosted liquidity and investors reviewed a statement from the troubled developer about an interest payment. Overnight implied volatility on the pound climbed to the highest since March ahead of Bank of England’s meeting on Thursday. The British pound weakened after Business Secretary Kwasi Kwarteng warnedthat people should prepare for longer-term high energy prices amid a natural-gas shortage that sent power costs soaring. Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices. Overnight volatility in the euro rises above 10% for the first time since July ahead of the Federal Reserve’s monetary policy decision announcement. The Aussie jumped as much as 0.5% as iron-ore prices rebounded. Spot surged through option-related selling at 0.7240 before topping out near 0.7265 strikes expiring Wednesday, according to Asia- based FX traders.  Elsewhere, the yen weakened and commodity-linked currencies such as the Australian dollar pushed higher. In rates, the dollar weakened against most of its Group-of-10 peers. Treasury futures were under modest pressure in early U.S. trading, leaving yields cheaper by ~1.5bp from belly to long-end of the curve. The 10-year yield was at ~1.336% steepening the 2s10s curve by ~1bp as the front-end was little changed. Improved risk appetite weighed; with stock futures have recovering much of Tuesday’s losses as Evergrande concerns subside. Focal point for Wednesday’s session is FOMC rate decision at 2pm ET.   FOMC is expected to suggest it will start scaling back asset purchases later this year, while its quarterly summary of economic projections reveals policy makers’ expectations for the fed funds target in coming years in the dot-plot update; eurodollar positions have emerged recently that anticipate a hawkish shift Bitcoin dropped briefly below $40,000 for the first time since August amid rising criticism from regulators, before rallying as the mood in global markets improved. In commodities, Iron ore halted its collapse and metals steadied. Oil advanced for a second day. Bitcoin slid below $40,000 for the first time since early August before rebounding back above $42,000.   To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Market Snapshot S&P 500 futures up 0.4% to 4,362.25 STOXX Europe 600 up 0.5% to 461.19 MXAP down 0.7% to 199.29 MXAPJ down 0.4% to 638.39 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.4% to 3,628.49 Sensex little changed at 59,046.84 Australia S&P/ASX 200 up 0.3% to 7,296.94 Kospi up 0.3% to 3,140.51 Brent Futures up 1.5% to $75.47/bbl Gold spot up 0.0% to $1,775.15 U.S. Dollar Index little changed at 93.26 German 10Y yield rose 0.6 bps to -0.319% Euro little changed at $1.1725 Top Overnight News from Bloomberg What would it take to knock the U.S. recovery off course and send Federal Reserve policy makers back to the drawing board? Not much — and there are plenty of candidates to deliver the blow The European Central Bank will discuss boosting its regular asset purchases once the pandemic-era emergency stimulus comes to an end, but any such increase is uncertain, Governing Council member Madis Muller said Investors seeking hints about how Beijing plans to deal with China Evergrande Group’s debt crisis are training their cross hairs on the central bank’s liquidity management A quick look at global markets courtesy of Newsquawk Asian equity markets traded mixed as caution lingered ahead of upcoming risk events including the FOMC, with participants also digesting the latest Evergrande developments and China’s return to the market from the Mid-Autumn Festival. ASX 200 (+0.3%) was positive with the index led higher by the energy sector after a rebound in oil prices and as tech also outperformed, but with gains capped by weakness in the largest-weighted financials sector including Westpac which was forced to scrap the sale of its Pacific businesses after failing to secure regulatory approval. Nikkei 225 (-0.7%) was subdued amid the lack of fireworks from the BoJ announcement to keep policy settings unchanged and ahead of the upcoming holiday closure with the index only briefly supported by favourable currency outflows. Shanghai Comp. (+0.4%) was initially pressured on return from the long-weekend and with Hong Kong markets closed, but pared losses with risk appetite supported by news that Evergrande’s main unit Hengda Real Estate will make coupon payments due tomorrow, although other sources noted this is referring to the onshore bond payments valued around USD 36mln and that there was no mention of the offshore bond payments valued at USD 83.5mln which are also due tomorrow. Meanwhile, the PBoC facilitated liquidity through a CNY 120bln injection and provided no surprises in keeping its 1-year and 5-year Loan Prime Rates unchanged for the 17th consecutive month at 3.85% and 4.65%, respectively. Finally, 10yr JGBs were flat amid the absence of any major surprises from the BoJ policy announcement and following the choppy trade in T-notes which were briefly pressured in a knee-jerk reaction to the news that Evergrande’s unit will satisfy its coupon obligations tomorrow, but then faded most of the losses as cautiousness prevailed. Top Asian News Gold Steady as Traders Await Outcome of Fed Policy Meeting Evergrande Filing on Yuan Bond Interest Leaves Analysts Guessing Singapore Category E COE Price Rises to Highest Since April 2014 Asian Stocks Fall for Third Day as Focus Turns to Central Banks European equities (Stoxx 600 +0.5%) trade on a firmer footing in the wake of an encouraging APAC handover. Focus overnight was on the return of Chinese participants from the Mid-Autumn Festival and news that Evergrande’s main unit, Hengda Real Estate will make coupon payments due tomorrow; however, we await indication as to whether they will meet Thursday’s offshore payment deadline as well. Furthermore, the PBoC facilitated liquidity through a CNY 120bln injection whilst keeping its 1-year and 5-year Loan Prime Rates unchanged (as expected). Note, despite gaining yesterday and today, thus far, the Stoxx 600 is still lower to the tune of 0.7% on the week. Stateside, futures are also trading on a firmer footing ahead of today’s FOMC policy announcement, at which, market participants will be eyeing any clues for when the taper will begin and digesting the latest dot plot forecasts. Furthermore, the US House voted to pass the bill to fund the government through to December 3rd and suspend the debt limit to end-2022, although this will likely be blocked by Senate Republicans. Back to Europe, sectors are mostly firmer with outperformance in Basic Resources and Oil & Gas amid upside in the metals and energy complex. Elsewhere, Travel & Leisure is faring well amid further upside in Entain (+6.1%) with the Co. noting it rejected an earlier approach from DraftKings at GBP 25/shr with the new offer standing at GBP 28/shr. Additionally for the sector, Flutter Entertainment (+4.1%) are trading higher after settling the legal dispute between the Co. and Commonwealth of Kentucky. Elsewhere, in terms of deal flow, Iliad announced that it is to acquire UPC Poland for around USD 1.8bln. Top European News Energy Cost Spike Gets on EU Ministers’ Green Deal Agenda Travel Startup HomeToGo Gains in Frankfurt Debut After SPAC Deal London Stock Exchange to Shut Down CurveGlobal Exchange EU Banks Expected to Add Capital for Climate Risk, EBA Says In FX, trade remains volatile as this week’s deluge of global Central Bank policy meetings continues to unfold amidst fluctuations in broad risk sentiment from relatively pronounced aversion at various stages to a measured and cautious pick-up in appetite more recently. Hence, the tide is currently turning in favour of activity, cyclical and commodity currencies, albeit tentatively in the run up to the Fed, with the Kiwi and Aussie trying to regroup on the 0.7000 handle and 0.7350 axis against their US counterpart, and the latter also striving to shrug off negative domestic impulses like a further decline below zero in Westpac’s leading index and an earthquake near Melbourne. Next up for Nzd/Usd and Aud/Usd, beyond the FOMC, trade data and preliminary PMIs respectively. DXY/CHF/EUR/CAD - Notwithstanding the overall improvement in market tone noted above, or another major change in mood and direction, the Dollar index appears to have found a base just ahead of 93.000 and ceiling a similar distance away from 93.500, as it meanders inside those extremes awaiting US existing home sales that are scheduled for release before the main Fed events (policy statement, SEP and post-meeting press conference from chair Powell). Indeed, the Franc, Euro and Loonie have all recoiled into tighter bands vs the Greenback, between 0.9250-26, 1.1739-17 and 1.2831-1.2770, but with the former still retaining an underlying bid more evident in the Eur/Chf cross that is consolidating under 1.0850 and will undoubtedly be acknowledged by the SNB tomorrow. Meanwhile, Eur/Usd has hardly reacted to latest ECB commentary from Muller underpinning that the APP is likely to be boosted once the PEPP envelope is closed, though Usd/Cad is eyeing a firm rebound in oil prices in conjunction with hefty option expiry interest at the 1.2750 strike (1.8 bn) that may prevent the headline pair from revisiting w-t-d lows not far beneath the half round number. GBP/JPY - The major laggards, as Sterling slips slightly further beneath 1.3650 against the Buck to a fresh weekly low and Eur/Gbp rebounds from circa 0.8574 to top 0.8600 on FOMC day and T-1 to super BoE Thursday. Elsewhere, the Yen has lost momentum after peaking around 109.12 and still not garnering sufficient impetus to test 109.00 via an unchanged BoJ in terms of all policy settings and guidance, as Governor Kuroda trotted out the no hesitation to loosen the reins if required line for the umpteenth time. However, Usd/Jpy is holding around 109.61 and some distance from 1.1 bn option expiries rolling off between 109.85-110.00 at the NY cut. SCANDI/EM - Brent’s revival to Usd 75.50+/brl from sub-Usd 73.50 only yesterday has given the Nok another fillip pending confirmation of a Norges Bank hike tomorrow, while the Zar has regained some poise with the aid of firmer than forecast SA headline and core CPI alongside a degree of retracement following Wednesday’s breakdown of talks on a pay deal for engineering workers that prompted the union to call a strike from early October. Similarly, the Cnh and Cny by default have regrouped amidst reports that the CCP is finalising details to restructure Evergrande into 3 separate entities under a plan that will see the Chinese Government take control. In commodities, WTI and Brent are firmer this morning though once again fresh newsflow for the complex has been relatively slim and largely consisting of gas-related commentary; as such, the benchmarks are taking their cue from the broader risk tone (see equity section). The improvement in sentiment today has brought WTI and Brent back in proximity to being unchanged on the week so far as a whole; however, the complex will be dictated directly by the EIA weekly inventory first and then indirectly, but perhaps more pertinently, by today’s FOMC. On the weekly inventories, last nights private release was a larger than expected draw for the headline and distillate components, though the Cushing draw was beneath expectations; for today, consensus is a headline draw pf 2.44mln. Moving to metals where the return of China has seen a resurgence for base metals with LME copper posting upside of nearly 3.0%, for instance. Albeit there is no fresh newsflow for the complex as such, so it remains to be seen how lasting this resurgence will be. Finally, spot gold and silver are firmer but with the magnitude once again favouring silver over the yellow metal. US Event Calendar 10am: Aug. Existing Home Sales MoM, est. -1.7%, prior 2.0% 2pm: Sept. FOMC Rate Decision (Lower Boun, est. 0%, prior 0% DB's Jim Reid concludes the overnight wrap All eyes firmly on China this morning as it reopens following a 2-day holiday. As expected the indices there have opened lower but the scale of the declines are being softened by the PBoC increasing its short term cash injections into the economy. They’ve added a net CNY 90bn into the system. On Evergrande, we’ve also seen some positive headlines as the property developers’ main unit Hengda Real Estate Group has said that it will make coupon payment for an onshore bond tomorrow. However, the exchange filing said that the interest payment “has been resolved via negotiations with bondholders off the clearing house”. This is all a bit vague and doesn’t mention the dollar bond at this stage. Meanwhile, Bloomberg has reported that Chinese authorities have begun to lay the groundwork for a potential restructuring that could be one of the country’s biggest, assembling accounting and legal experts to examine the finances of the group. All this follows news from Bloomberg yesterday that Evergrande missed interest payments that had been due on Monday to at least two banks. In terms of markets the CSI (-1.11%), Shanghai Comp (-0.29%) and Shenzhen Comp (-0.53%) are all lower but have pared back deeper losses from the open. We did a flash poll in the CoTD yesterday (link here) and after over 700 responses in a couple of hours we found only 8% who we thought Evergrande would still be impacting financial markets significantly in a month’s time. 24% thought it would be slightly impacting. The other 68% thought limited or no impact. So the world is relatively relaxed about contagion risk for now. The bigger risk might be the knock on impact of weaker Chinese growth. So that’s one to watch even if you’re sanguine on the systemic threat. Craig Nicol in my credit team did a good note yesterday (link here) looking at the contagion risk to the broader HY market. I thought he summed it up nicely as to why we all need to care one way or another in saying that “Evergrande is the largest corporate, in the largest sector, of the second largest economy in the world”. For context AT&T is the largest corporate borrower in the US market and VW the largest in Europe. Turning back to other Asian markets now and the Nikkei (-0.65%) is down but the Hang Seng (+0.51%) and Asx (+0.58%) are up. South Korean markets continue to remain closed for a holiday. Elsewhere, yields on 10y USTs are trading flattish while futures on the S&P 500 are up +0.10% and those on the Stoxx 50 are up +0.21%. Crude oil prices are also up c.+1% this morning. In other news, the Bank of Japan policy announcement overnight was a non-event as the central bank maintained its yield curve target while keeping the policy rate and asset purchases plan unchanged. The central bank also unveiled more details of its green lending program and said that it would immediately start accepting applications and would begin making the loans in December. The relatively calm Asian session follows a stabilisation in markets yesterday following their rout on Monday as investors looked forward to the outcome of the Fed’s meeting later today. That said, it was hardly a resounding performance, with the S&P 500 unable to hold on to its intraday gains and ending just worse than unchanged after the -1.70% decline the previous day as investors remained vigilant as to the array of risks that continue to pile up on the horizon. One of these is in US politics and legislators seem no closer to resolving the various issues surrounding a potential government shutdown at the end of the month, along with a potential debt ceiling crisis in October, which is another flashing alert on the dashboard for investors that’s further contributing to weaker sentiment right now. Looking ahead now, today’s main highlight will be the latest Federal Reserve decision along with Chair Powell’s subsequent press conference, with the policy decision out at 19:00 London time. Markets have been on edge for any clues about when the Fed might begin to taper asset purchases, but concern about tapering actually being announced at this meeting has dissipated over recent weeks, particularly after the most recent nonfarm payrolls in August came in at just +235k, and the monthly CPI print also came in beneath consensus expectations for the first time since November. In terms of what to expect, our US economists write in their preview (link here) that they see the statement adopting Chair Powell’s language that a reduction in the pace of asset purchases is appropriate “this year”, so long as the economy remains on track. They see Powell maintaining optionality about the exact timing of that announcement, but they think that the message will effectively be that the bar to pushing the announcement beyond November is relatively high in the absence of any material downside surprises. This meeting also sees the release of the FOMC’s latest economic projections and the dot plot, where they expect there’ll be an upward drift in the dots that raises the number of rate hikes in 2023 to 3, followed by another 3 increases in 2024. Back to yesterday, and as mentioned US equity markets fell for a second straight day after being unable to hold on to earlier gains, with the S&P 500 slightly lower (-0.08%). High-growth industries outperformed with biotech (+0.38%) and semiconductors (+0.18%) leading the NASDAQ (+0.22%) slightly higher, however the Dow Jones (-0.15%) also struggled. Europe saw a much stronger performance though as much of the US decline came after Europe had closed. The STOXX 600 gained +1.00% to erase most of Monday’s losses, with almost every sector in the index ending the day in positive territory. With risk sentiment improving for much of the day yesterday, US Treasuries sold off slightly and by the close of trade yields on 10yr Treasuries were up +1.2bps to 1.3226%, thanks to a +1.8bps increase in real yields. However, sovereign bonds in Europe told a different story as yields on 10yr bunds (-0.3bps), OATs (-0.3bps) and BTPs (-1.9bps) moved lower. Other safe havens including gold (+0.59%) and silver (+1.02%) also benefited, but this wasn’t reflected across commodities more broadly, with Bloomberg’s Commodity Spot Index (-0.30%) losing ground for a 4th consecutive session. Democratic Party leaders plan to vote on the Senate-approved $500bn bipartisan infrastructure bill next Monday, even with no resolution to the $3.5tr budget reconciliation measure that encompasses the remainder of the Biden Administration’s economic agenda. Democrats continue to work on the reconciliation measure but have turned their attention to the debt ceiling and government funding bills.Congress has fewer than two weeks before the current budget expires – on Oct 1 – to fund the government and raise the debt ceiling. Republicans yesterday noted that the Democrats could raise the ceiling on their own through the reconciliation process, with many saying that they would not be offering their support to any funding bill. Democrats continue to push for a bipartisan bill to raise the debt ceiling, pointing to their votes during the Trump administration. If Democrats are forced to tie the debt ceiling and funding bills to budget reconciliation, it could limit how much of the $3.5 trillion bill survives the last minute negotiations between progressives and moderates. More to come over the next 10 days. Staying on the US, there was an important announcement in President Biden’s speech at the UN General Assembly, as he said that he would work with Congress to double US funding to poorer nations to deal with climate change. That comes as UK Prime Minister Johnson (with the UK hosting the COP26 summit in less than 6 weeks’ time) has been lobbying other world leaders to find the $100bn per year that developed economies pledged by 2020 to support developing countries as they reduce their emissions and deal with climate change. In Germany, there are just 4 days to go now until the federal election, and a Forsa poll out yesterday showed a slight narrowing in the race, with the centre-left SPD remaining on 25%, but the CDU/CSU gained a point on last week to 22%, which puts them within the +/- 2.5 point margin of error. That narrowing has been seen in Politico’s Poll of Polls as well, with the race having tightened from a 5-point SPD lead over the CDU/CSU last week to a 3-point one now. Turning to the pandemic, Johnson & Johnson reported that their booster shot given 8 weeks after the first offered 100% protection against severe disease, 94% protection against symptomatic Covid in the US, and 75% against symptomatic Covid globally. Speaking of boosters, Bloomberg reported that the FDA was expected to decide as soon as today on a recommendation for Pfizer’s booster vaccine. That follows an FDA advisory panel rejecting a booster for all adults last Friday, restricting the recommendation to those over-65 and other high-risk categories. Staying with the US and vaccines, President Biden announced that the US was ordering 500mn doses of the Pfizer vaccine to be exported to the rest of the world. On the data front, there were some strong US housing releases for August, with housing starts up by an annualised 1.615m (vs. 1.55m expected), and building permits up by 1.728m (vs. 1.6m expected). Separately, the OECD released their Interim Economic Outlook, which saw them upgrade their inflation expectations for the G20 this year to +3.7% (up +0.2ppts from May) and for 2022 to +3.9% (up +0.5ppts from May). Their global growth forecast saw little change at +5.7% in 2021 (down a tenth) and +4.5% for 2022 (up a tenth). To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Tyler Durden Wed, 09/22/2021 - 08:05.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

Tractor Supply (TSCO) Growth Plans on Track, Stock Up 46% YTD

Strength in product offerings, store-growth endeavors and other strategies like ONETractor plans continue to aid Tractor Supply (TSCO) for quite some time. Tractor Supply Company TSCO is climbing up the charts, thanks to its sturdy growth ploys including ‘ONETractor’ Strategy that helps it stay afloat amid the prevalent pandemic-borne crisis. To resonate well with the evolving consumer trends, management is quite focused on integrating the physical and digital channels to offer its customers a seamless shopping experience. It is also banking on its robust digital capabilities to drive e-commerce growth. The company is also benefiting from its sturdy portfolio including everyday merchandise, such as consumable, usable and edible products.This Brentwood, TN-based company’s shares have surged 46.2% in the year-to-date period, outperforming the industry’s mere 0.3% growth. In addition, the Zacks Consensus Estimate of $12.29 billion for sales and $7.96 for earnings in 2021 suggests a respective increase of about 16% from the year-ago reported figures.Let’s Delve DeeperTractor Supply is on track to develop its Tractor Supply’s Out Here lifestyle assortment and convenient shopping format to win customers and grab a plum market share. The strategy is essentially based on five key pillars, which include customers, digitization, execution, team members and total shareholder returns. Some of the key initiatives undertaken to support its strategy comprise reinforcement of space productivity, enhancement of omni-channel initiatives, evolution of Neighbor’s Club loyalty program and acceleration of in-store merchandising execution.Image Source: Zacks Investment ResearchAdditionally, the company launched the Field Activity Support Team (FAST) and is implementing various technology and service enhancements across the enterprise. Management is well on track to cater to customers via its latest stores, Project Fusion remodels and Side Lot transformation. The company has been strengthening its supply chain and boosting digital commerce to drive growth for the long haul. It is also committed to introducing the latest merchandising and marketing strategies to enrich customers’ experience.Its omni-channel investments including curbside pickup, same day, next-day delivery, a re-launched website and a new mobile app are consistently adding up to its solid digital sales. In second-quarter 2021, e-commerce witnessed its largest ever quarterly sales. Also, its mobile app recorded more than 1.6 million downloads and now accounts for more than 10% of its digital sales. The Neighbor's Club added 5 million members year over year, representing nearly 65% of sales. The expansion of its Buy Online Pickup in Store facility to include drive-through pickup service is likely to aid growth.The company continues gaining shares across all categories, online and in stores. The ‘ONETractor’ strategy aims at connecting store and online shopping. Backed by this initiative, the company continues to fuel growth, build customer-centric engagement, offer suitable products and services, and reinforce core infrastructure capabilities. In fact, it is steadily focusing on its growth initiatives, which include expansion of store base and incorporation of technological advancements to augment traffic and drive up the top line.The company is well positioned to expand its store base. It remains on track to increase its domestic store to 2,500 in the long term. It plans to open 80 Tractor Supply stores and 10 Petsense stores in 2021.Final ThoughtsAll the aforesaid strategies are expected to continue delivering growth for Tractor Supply ahead. Addition of product categories and expansion of shopping capabilities are Tractor Supply’s notable drivers. Management looks forward to expanding its product offering, mainly in the lawn and garden categories, entering new categories and offering greater convenience via its Buy Online Pickup in Store capabilities including the drive-through pickup. A VGM Score of A with a projected long-term earnings growth rate of 9.7% is bolstering this currently Zacks Rank #3 (Hold) stock’s solid run on the bourses.Key Picks in RetailThe TJX Companies TJX has a long-term earnings growth rate of 10.5% and a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.Gap GPS presently has a Zacks Rank of 1 and a long-term earnings growth rate of 12%.Costco COST presently has a long-term earnings growth rate of 9.3% and a Zacks Rank #2 (Buy). 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The TJX Companies, Inc. (TJX): Free Stock Analysis Report Tractor Supply Company (TSCO): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report The Gap, Inc. (GPS): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Builders Regain Confidence in September: Top 4 Housing Picks

The latest September reading of builders' confidence reflects thriving housing market conditions, defying supply shortage. Homebuilders have now regained optimism on the U.S. housing market, with homebuilder confidence registering its first monthly gain over the past four months. Defying the unprecedented supply chain disruptions, homebuilder sentiment inched one point higher in September, given solid demand trend and lower lumber prices.According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) report released on Monday, monthly reading jumped one point to 76 this month from August. Strong underlying demand for housing raises optimism despite headwinds like rising building material costs and the fact that persistent shortage of skilled labor continues to vex builders. Yet, the NAHB/Wells Fargo HMI is still off its high of 90 reached last November.For this month, two of the three HMI components grew sequentially. Current sales conditions increased one point to 82. Buyer traffic rose two points to 61 and sales prediction for the next six months remained steady at 81. The HMI gauge of future sales expectation signals persistent growth in housing demand this year.In the words of NAHB Chairman Chuck Fowke, “The September data show stability as some building material cost challenges ease, particularly for softwood lumber. However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers.”Although a risk of affordability is expected to crop up going forward on accelerating home prices and construction costs, “a still hot but more stable level of activity” in the single-family building market raises hope.Low Borrowing Costs & Suburban Shift Remain Growth DriversPer Freddie Mac’s latest Primary Mortgage Market Survey, the average U.S. 30-year fixed-rate mortgage declined 2 basis points (bps) to 2.86% for the week ended Sep 16 from a week ago. The metric also declined 1 bps from 2.87% recorded in the corresponding prior-year period.The U.S. housing market remains buoyant, with home sales rising at a record pace, defying low inventory levels. The fundamentals of this rate-sensitive market — which accounts for almost 3% of the economy — remain favorable, given the Fed’s dovish monetary stance and lower mortgage rates.Furthermore, the willingness for more space to accommodate working and learning from home has been driving the U.S. housing market. Demand for new homes is improving in lower-density markets, including small metro areas, rural markets and large metro exurbs, as people seek larger homes to work from home amid the pandemic.In the latest release by the organization, it has been highlighted that Exurban markets have seen the most growth, while inner suburbs are now witnessing an increase in demand, especially for townhouses. Regionally, the housing market continues to see growth in the South and the West, particularly the Mountain West.Key Housing PicksAdding some housing stocks to your portfolio seems to be a judicious move at this point, given solid demand. With the help of the Zacks Stock Screener, we have zeroed in on four stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and favorable metrics. A top Zacks Rank indicates that these stocks have been witnessing positive estimate revisions, which generally translate into rapid price appreciation. You can see the complete list of today’s Zacks #1 Rank stocks here. Image Source: Zacks Investment ResearchMI Homes, Inc. MHO: This Columbus, OH-based builder of single-family homes has been benefiting from solid performance across all 15 of its housing operations, and the Mortgage and Title business. Higher deliveries, greater operating leverage, stellar backlog level, and increased return of equity have been helping the company generate improved profits. The stock carries a Zacks Rank #1 at present and has gained 36% so far this year, outperforming the Zacks Building Products - Home Builders industry’s 18.4% rally. The Zacks Consensus Estimate for its 2021 earnings has been upwardly revised by 32.5% over the past 60 days. Earnings for 2021 are expected to grow 63.3%.Meritage Homes Corporation MTH: Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor. Meritage Homes’ strategy of targeting entry-level buyers is expected to boost its performance over the long haul. This Zacks Rank #1 stock has gained 22.8% so far this year. Earnings are expected to grow 72.4% in 2021. Meritage Homes has seen an upward estimate revision of 28.9% for 2021 earnings over the past 60 days.Century Communities, Inc. CCS: This Greenwood Village, CO-based company engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. Demand for its affordable new homes driven by favorable demographics, tight resale supply and low-interest rates, while underscoring the strength of its competitive positioning and national footprint across 30 high-growth markets, has been driving Century Communities’ growth. The stock currently carries a Zacks Rank #2 and has gained 43.8% year to date. The company has an expected earnings growth of 115.9% for 2021. The Zacks Consensus Estimate for its 2021 earnings has moved up 16.1% over the past 60 days.Tri Pointe Homes Inc. TPH: Based in Irvine, CA, this company engages in the design, construction, and sale of single-family detached and attached homes in the United States. Robust demand and pricing, and better operating leverage have been driving its performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives. The stock, carrying a Zacks Rank #2 at present, has gained 25.9% year to date. The Zacks Consensus Estimate for its 2021 earnings has been upwardly revised by 14.2% over the past 60 days. Earnings for 2021 are expected to grow 66.8%. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Meritage Homes Corporation (MTH): Free Stock Analysis Report Century Communities, Inc. (CCS): Free Stock Analysis Report Tri Pointe Homes Inc. (TPH): Free Stock Analysis Report MI Homes, Inc. (MHO): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

4 Dirt Cheap Stocks to Bet on Amid September Market Meltdown

Amid the decline of the benchmarks, investors should bet on discounted stocks like SNDR, NOG, GIII, and ANF for future growth. The number of new COVID-19 cases and the market both displayed a rising trend in the last three months. The job market gained consistently in this period, reflecting a stable economy. In August, particularly, unemployment rates were lower in 15 states and the District of Columbia and stable in 35 states. Nonfarm payroll employment increased in 11 states, decreased in three states, and was unchanged in 36 states and the District — per the data by the U.S. Bureau of Labour Statistics.While many of the market watchers assured us about this sustained bull run despite a massive spread of the more lethal Delta strain, others apprehended a bloodbath round the corner. Eventually, over the past two trading days, the market is deep into the bear territory, displaying the worst run since May.Yesterday, the stock market crashed with benchmarks like the S&P 500 and Dow Jones both down nearly 2%. NASDAQ Composite Index, which gained support last week from the technology bigwigs, declined 2.2% yesterday, shedding more than 300 points.Two Primary Pull-Down FactorsThe intensifying China property market crisis is expected to have played a major role behind the dragging down of the benchmarks. Alliance Bernstein’s Co-Head of Asia Pacific Fixed Income Jenny Zeng recently warned that the highly distressed real estate developer of China, Evergrande (tagged as the world’s most indebted developer with $300 billion of debt at present) is on the edge of default. As quoted by CNBC, she also stated that this collapse will have a ‘domino effect’ on China’s property sector. In the overseas dollar market, these distressed developers combinedly hold a meaningful portion. Consequently, market watchers are worried that the collapse, if it occurs, will have a spillover effect worldwide.Another point that is troubling the investors is the apprehension that amid the job market growth, the COVID-19 induced monetary stimulus might get significantly tapered. During the economic crisis, several stimulus measures were launched mainly in the form of rate cuts and bond purchases.  There are concerns that the Fed and other central banks, which are going to have a two-day meeting starting today, might start winding down stimulus.Market to Revive with OSHA RuleThanks to the ongoing market selloffs, a number of growth stocks have once again moved into the undervalued territory. However, the ongoing extensive rollout of vaccines across the nation, particularly, the latest launch of President Biden’s COVID-19 action plan called “Path Out of the Pandemic” is claimed to boost the financial market rebound.As per the six-pronged, comprehensive national strategy, the Department of Labor’s Occupational Safety and Health Administration (OSHA) will develop a rule that will require all employers with 100 or more employees to ensure that their workforce is fully vaccinated. Any worker who remains unvaccinated will be required to produce a negative test result on at least a weekly basis before coming to work. The OSHA will issue an Emergency Temporary Standard (ETS) to implement this requirement.Once the OSHA rule is implemented, the COVID-19 fear factor is likely to ease further. Market watchers believe that steep rebounds are once again in the cards for the currently beaten-down stocks.Value Investing: The Ideal Strategy NowGiven the grim U.S. stock market scenario, investors may choose some fundamentally strong stocks,which have been currently pushed into the value territory because of the September market meltdown. These beaten-down stocks are currently available at dirt-cheap prices.It has been observed that growth stocks outshine value stocks during economic downturns. However, when the economy picks up pace, post the pandemic-led economic mayhem, value stocks are expected to outperform the market.To narrow down the list, we have selected stocks with a Value Style Score of A or B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Listed below are four companies that investors can consider during these trying times.Schneider National SNDR: This Zacks Rank #1 stock with a Value Score of A is a leading transportation and logistics services company. The company is currently being aided by strong performances of the Intermodal and Logistics units. The Intermodal segment is benefiting from yield management and increased volumes, while the Logistics unit is thriving on the back of favorable constructive market conditions and other factors. The stock is currently priced at $22.30. In 2021, the company’s earnings and sales are expected to grow 56.8% and 8.5% respectively.Schneider National, Inc. Price Schneider National, Inc. price | Schneider National, Inc. QuoteNorthern Oil and Gas NOG: The company’s core operations are focused on three leading basins of the United States — the Williston, Permian,and the Appalachian. The company employs a unique non-operating business model, which helps it to keep costs down and increase free cash flow. Prioritizing returns to investors, Northern Oil and Gas recently initiated a 3 cents per share quarterly base dividend, with the first payment to be made in the third quarter.This Zacks Rank #1 stock with a Value Score of A is currently priced at $19 a share. In 2021, the company’s earnings and sales are expected to grow 70.9% and 209.7% respectively.Northern Oil and Gas, Inc. Price Northern Oil and Gas, Inc. price | Northern Oil and Gas, Inc. QuoteG-III Apparel, Ltd. GIII: Solid gains from the company’s assortments and digital business are currently driving results. Although the retail business has been sluggish, management has completed the division’s restructuring and the new model is poised to attain profitability. G-III Apparel’s digital business also continues to exhibit strength.This stock too sports a Zacks Rank #1 and has a Value Score of A. It is currently priced at $28.45 a share. In 2021, the company’s earnings and sales are expected to grow 341.6% and 30.2%, respectively.GIII Apparel Group, LTD. Price GIII Apparel Group, LTD. price | GIII Apparel Group, LTD. QuoteAbercrombie & Fitch Company ANF: The company operates as a specialty retailer of premium, high-quality casual apparel for men, women, and kids through a network of approximately 850 stores across North America, Europe, Asia, and the Middle East. Abercrombie is making significant progress in expanding digital and omni-channel capabilities to better engage with consumers. Despite the reopening of stores, the company’s strong digital momentum continued in the last-reported second-quarter 2021.This stock too sports a Zacks Rank #1 and has a Value Score A. It is currently priced at $28.45 a share.In 2021, the company’s earnings and sales are expected to grow 341.6% and 30.2%, respectively.Abercrombie & Fitch Company Price Abercrombie & Fitch Company price | Abercrombie & Fitch Company Quote 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abercrombie & Fitch Company (ANF): Free Stock Analysis Report GIII Apparel Group, LTD. (GIII): Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG): Free Stock Analysis Report Schneider National, Inc. (SNDR): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksSep 21st, 2021

Visa (V) Adds New Benefits to U.S. Consumer Credit Cards

Visa (V) brings benefits from Shipt, Skillshare and Sofar Sounds to its U.S. consumer credit cards, which underscore the company's efforts to upgrade its credit benefits portfolio. Visa Inc. V recently integrated exclusive benefits from Shipt, Skillshare and Sofar Sounds within its credit cards in a bid to benefit its U.S. Consumer Credit cardholders. The eligible cardholders can avail these benefits, subject to the type of cards being used by them including Visa Infinite, Visa Signature and rest of the Visa U.S. Consumer Credit Cards.Coming to the benefits, the first one is offered by the leading American delivery service provider, Shipt. It works closely with more than 130 retailers, and brings groceries and household necessities to the doorstep across over 5,000 cities in the United States. With the latest move, the consumer credit cardholders of Visa will be entitled to not only free or discounted membership of Shipt but also get free delivery for orders above $35, subject to certain conditions.Apart from this, cardholders will get free membership and discounted annual renewal fees of the online learning community – Skillshare. They can also avail presale tickets plus a free concert ticket related to the musical events organized by Sofar Sounds.Introduction of such benefits highlights Visa’s sincere efforts to upgrade its credit cards and cater to the diverse needs of customers. Moves similar to the latest one provide a boost to the company’s credit benefits portfolio, through which Visa strives to provide exclusive access to increased choice of benefits and enhanced shopping experiences to its consumer credit cardholders.The company has made efforts to integrate prioritized benefits within its credit cards in the past as well. Early in 2021, Visa integrated the identity theft protection benefit from NortonLifeLock into the former’s U.S. consumer credit cards. As a result, cardholders could avail complimentary offers and rebates on products and services from NortonLifeLock, which is best known for countering potential identity threats and helping people lead secured digital lives.Continuous addition of benefits within Visa's credit cards has been attracting more people toward utilizing these cards. Higher issuance of Visa-branded cards is expected to boost the company’s transaction volume in the days ahead.Visa continues to occupy a dominant space as one of the leading U.S. credit card networks. This seems to work in favor of the company as the credit card issuing industry is anticipated to bounce back this year following a dismal period stemming from the pandemic induced financial volatilities and closure of businesses, per analysts of IBISWorld. With gradual economic recovery driving higher consumer spending and resumption of most business activities, the credit card issuing market is likely to see a rebound in the days ahead.Visa has been committed to rolling out innovative card offerings and catering to the evolving payment needs of customers. It has been focused on technology upgradations and introductions of secured digital payment options to meet customers’ inclination toward online shopping that compelled the majority of businesses to devise newer payment methods.Zacks Rank & Price PerformanceShares of Visa, which carries a Zacks Rank #2 (Buy), have gained 9.7% in the past year against the industry's decline of 8.5%Image Source: Zacks Investment ResearchOther Stocks to ConsiderSome other top-ranked stocks in the financial transaction services space include EVERTEC, Inc. EVTC, Green Dot Corporation GDOT and Global Payments Inc. (GPN), each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.EVERTEC, Green Dot and Global Payments have a trailing four-quarter earnings surprise of 28.42%, 64.53% and 4.02%, on average, respectively. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Visa Inc. (V): Free Stock Analysis Report Global Payments Inc. (GPN): Free Stock Analysis Report Green Dot Corporation (GDOT): Free Stock Analysis Report Evertec, Inc. (EVTC): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021