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Will ETFs Gain From Improving US Industrial Output in April?

The latest update on the U.S. industrial output is encouraging amid the current market turbulence. April’s encouraging U.S. industrial output data has brought some hope despite the current turbulent market conditions. Per the Fed’s recently-released data, total industrial production rose 1.1% in the month. It stood out as the fourth straight month of gains of 0.8% or higher. Moreover, a 0.8% increase in the manufacturing output also looks positive. There was a 2.4% rise in utility production. Moreover, mining production witnessed a 1.6% uptick, mainly due to strength in the oil and gas sector.Considering the latest data release, investors can track ETFs like The Industrial Select Sector SPDR Fund (XLI), Vanguard Industrials ETF (VIS), Fidelity MSCI Industrials Index ETF (FIDU) and iShares U.S. Industrials ETF (IYJ), which might gain from an improving industrial output.Total industrial production increased 6.4% from the year-ago figure in April. According to the Fed’s report, the durable and the nondurable manufacturing indexes inched up 1.1% and 0.3%, respectively, in April. The other manufacturing (publishing and logging) index was also up 0.9% in the month.Capacity utilization for the industrial sector expanded to 79% in April. The manufacturing capacity utilization for the industry, the measure for studying how efficiently firms are utilizing their resources, increased 0.6% in April to 79.2%, up 1.1 percentage points from its long-run average, per the Fed’s report (the highest level since April 2007).Present U.S. Economic ScenarioThe world’s largest economy continues to struggle with the persistently high-inflation levels. Per the latest Labor Department report, the Consumer Price Index (CPI) jumped 8.3% year over year in April, surpassing the already high Dow Jones estimate of an 8.1% rise. The metric, however, compared favorably with the 8.5% rise (the maximum since December 1981) in March.The core inflation index, which excludes volatile components, such as food and energy prices, rose 6.2% year over year, beating the expectations of a 6% rise. The rising inflation levels dashed the hopes of inflation peaking in March.The continued steep inflation levels are also weighing on consumer confidence in the United States. The growing supply-chain disturbances, emanating from the ongoing Russia-Ukraine war crisis and the resurging COVID-19 cases in China, might trigger concerns over a further rising inflation level.The Conference Board's measure of consumer confidence index stands at 107.3 in April 2022 compared with 107.6 in March. Moreover, April’s reading missed the consensus estimate of 108, per a Reuters survey of economists. Also, the metric continues to be below the pre-pandemic level of 132.6 achieved in February 2020.However, certain U.S. economic data releases have been encouraging so far. The Department of Commerce reported that retail sales in April were up 0.9% month over month, marginally below the consensus estimate of 1%. Year over year, retail sales grew 8.2% in April.Industrial ETFs in FocusIn the current scenario, we believe, it is prudent to discuss ETFs with relatively high exposure to the industrial companies:The Industrial Select Sector SPDR Fund XLI           The Industrial Select Sector SPDR Fund seeks to provide investment results that before expenses, match the performance of the Industrial Select Sector Index. The Industrial Select Sector SPDR Fund has an AUM of $13.67 billion and an expense ratio of 0.10% (read: Can Industrial ETFs Gain on Mixed Q1 Earnings?).Vanguard Industrials ETF VIS                   Vanguard Industrials ETF offers exposure to the industrial sector and follows the MSCI US Investable Market Industrials 25/50 Index. Vanguard Industrials ETF manages an AUM of $3.44 billion and an expense ratio of 0.10%.Fidelity MSCI Industrials Index ETF FIDUThe Fidelity MSCI Industrials Index ETF seeks to provide investment returns that match, before fees and expenses, the performance of the MSCI USA IMI Industrials Index. Fidelity MSCI Industrials Index ETF has an AUM of $708.5 million and an expense ratio of 0.08%.iShares U.S. Industrials ETF IYJThe iShares U.S. Industrials ETF seeks to track the investment results of the Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index. iShares U.S. Industrials ETF has an AUM of $1.29 billion and an expense ratio of 0.41%, as stated in the prospectus. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it 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 Vanguard Industrials ETF (VIS): ETF Research Reports Industrial Select Sector SPDR ETF (XLI): ETF Research Reports iShares U.S. Industrials ETF (IYJ): ETF Research Reports Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 21st, 2022

Emerson (EMR) Clinches Automation Software Deal From Fintoil

Emerson's (EMR) automation software and advanced technologies contract with Fintoil helps the latter to enhance the operational performance of its biorefinery plant. Emerson Electric Co. EMR recently secured a contract from Fintoil to provide automation software and technologies services. The financial terms of the contract were not disclosed by the parties involved.The company’s share price increased 2% yesterday, closing the trading session at $80.22.Inside the HeadlinesPer the deal, Emerson, in collaboration with Neste Engineering Solutions, will be responsible for providing and implementing its DeltaV safety instrumented system, DeltaV distributed control system and DeltaV Live operator interface software services at Fintoil’s biorefinery situated in the port of Hamina-Kotka, Finland. The facility, which is under construction, will be engaged in refining crude tall oil (CTO) to generate feedstock for second-generation renewable diesel and other products for the pharmaceutical and chemical industries.Emerson’s state-of-the-art asset management software and automation technologies will help Fintoil in boosting equipment reliability and performance at the site, thus improving the plant availability throughput. This will likely enable Fintoil to enhance the plant’s operational performance and safety and reduce operational cost.It is worth noting that the plant will likely become operational in 2022 and can produce an output of 200,000 tons every year. This will reduce CO2 emissions by 400,000 tons, which equals about 1% of total emissions in Finland annually.Zacks Rank, Price Performance and Earnings Estimate TrendEmerson, with a $47.7-billion market capitalization, currently carries a Zacks Rank #3 (Hold). EMR is expected to benefit from strength across its end markets and robust backlog level in the quarters ahead. However, woes related to supply chain, labor and logistics might weigh on it in the near term.Image Source: Zacks Investment ResearchShares of Emerson have decreased 17.6% compared with the 21.5% decline of its industry in the past three months.The Zacks Consensus Estimate for fiscal 2022 (ending September 2022) earnings has increased 1.6% to $5.06 in the past 60 days. However, earnings estimates for fiscal 2023 (ending September 2023) have moved 0.9% south to $5.42 during the same period.Stocks to ConsiderSome better-ranked companies from the industrial products sector are discussed below:Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank #1 (Strong Buy). AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks hereAIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. The stock has dropped 8.4% in the past three months.RBC Bearings Incorporated ROLL presently has a Zacks Rank of 2 (Buy). ROLL delivered a trailing four-quarter earnings surprise of 3.4%, on average.ROLL’s earnings estimates have increased 9.7% for fiscal 2023 (ending March 2022) in the past 60 days. Its shares have declined 11.6% in the past three months.Ferguson plc FERG is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 13.7%, on average.In the past 60 days, the stock’s earnings estimates have increased 4.7% for fiscal 2022 (ending July 2022). The same has declined 25.6% in the past three months. 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 Emerson Electric Co. (EMR): Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report RBC Bearings Incorporated (ROLL): Free Stock Analysis Report Wolseley PLC (FERG): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksJun 22nd, 2022

4 Industrial Services Stocks to Watch in a Prospering Industry

Backed by the ongoing expansion in manufacturing activities and e-commerce, the prospects of the industrial services industry hold promise despite the ongoing supply chain disruptions. We suggest keeping an eye on stocks like GWW, SITE, MSM and SCSC that are poised well to gain on these trends. The Zacks Industrial Services industry is poised to benefit from the ongoing expansion in the manufacturing sector despite the prevailing supply chain disruptions and cost pressures. Pricing actions and cost-cutting measures undertaken by the industry players have been driving margins.It is worth mentioning that the rise in e-commerce activities will act as a key catalyst for the industry. The industry players, including W.W. Grainger, Inc. GWW, SiteOne Landscape Supply, Inc. SITE, MSC Industrial Direct Company, Inc. MSM and ScanSource, Inc. SCSC, have been making efforts to capitalize on this trend.About the IndustryThe Zacks Industrial Services industry comprises companies that provide industrial equipment products and MRO (maintenance, repair and operations) services. It includes activities such as routine maintenance work, emergency maintenance and spare parts inventory control, which keep a facility and its equipment in good operating condition. The industry participants serve a wide array of customers ranging from commercial, government, healthcare to manufacturing. The industry's products (power tools, hand tools, cutting fluids, lubricants, Personal Protective Equipment and consumables) are utilized in production and plant maintenance but are not directly related to customers’ core products or services. By offering inventory management, process and procurement solutions, these companies reduce MRO supply chain costs and improve customers' plant floor productivity.What's Shaping the Future of Industrial Services IndustryMomentum in Manufacturing Activity: Around 70% of the industry’s revenues are derived from sales in the manufacturing sector. Trends in customers’ activity have historically correlated to changes in the Metalworking Business Index (“MBI”) and the Industrial Production Index (“IP”). The MBI is a sentiment index developed from a monthly survey of the U.S. metalworking industry, focused on durable goods manufacturing. The index has been above 50 lately, which indicates expansion. Backlog remains near historic highs. Per the Federal Reserve, manufacturing output has gained 4.8% over the past 12 months. In manufacturing, new orders, production and backlogs are growing at a rapid pace. The ongoing improvement in business sentiment and operational activity instills further optimism in the industrial services industry’s prospects.Supply Chain Issues and Cost Woes Persist:  The COVID-19 pandemic has impacted factory productivity and the supply chain. These supply chain and capacity challenges have led to higher transportation and labor costs due to the need to deliver finished goods to customers in a timely manner. Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures and increased border controls or closures, in certain cases, have resulted in higher costs and delays, both for obtaining raw materials and components and shipping finished goods to customers. The companies have been witnessing tight labor availability for some positions and incurring higher labor costs to meet the high levels of demand. COVID-19-related worker absenteeism also remains an issue. Inflationary cost pressures add to the woes. Meanwhile, the industry players have been focusing on pricing actions, cost-cutting measures, efforts to improve productivity and efficiency, and diversification of supplier base to mitigate some of these headwinds.E-Commerce Acting as a Key Catalyst: MRO demand has been significantly impacted by the evolution of e-commerce. Customers’ demand for highly tailored solutions with real-time access to information and rapid delivery of products is on the rise. Customers basically want to execute their business activities in the most efficient way possible, which often means online. The pandemic led to a significant push in e-commerce activities. In 2020, over two billion people purchased goods or services online, recording e-retail sales above $4.2 trillion. In 2021, global retail e-commerce sales amounted to approximately $4.9 trillion. This is expected to go up 50% over the next four years and attain a level of around $7.4 trillion dollars by 2025. To capitalize on this trend, the players in the industrial services industry have increased their focus on making investments in e-commerce and digital capabilities.Zacks Industry Rank Indicates Bright ProspectsThe group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Industrial Services Industry, which is a 23-stock group within the broader Zacks Industrial Products Sector, currently carries a Zacks Industry Rank #48, which places it at the top 19% of 252 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Before we present a few Industrial services stocks that investors can keep an eye on, it’s worth taking a look at the industry’s stock-market performance and valuation picture. Industry Versus S&P 500 & SectorThe Industrial Services industry has underperformed its own sector and the Zacks S&P 500 composite over the past year.Over this period, the industry has fallen 53.8% compared with the sector’s decline of 24.4%. The Zacks S&P 500 composite has slumped 14% in the same time frame.One-Year Price Performance Industry's Current ValuationOn the basis of the forward 12-month EV/EBITDA ratio, which is a commonly used multiple for valuing Industrial Services companies, we see that the industry is currently trading at 21.40x compared with the S&P 500’s 10.84x and the Industrial Products sector’s forward 12-month EV/EBITDA of 13.36x. This is shown in the charts below.Enterprise Value/EBITDA (EV/EBITDA) F12M RatioEnterprise Value/EBITDA (EV/EBITDA) F12M RatioOver the last five years, the industry has traded as high as 35.77x and as low as 8.30x, with the median being at 11.87x.4 Industrial Services Stocks to Keep an Eye onGrainger: The company is well-poised to gain from efforts to increase its customer base through incremental marketing investments and effective marketing strategies. GWW has been witnessing strong growth in non-pandemic product sales as the U.S. economy recovered. The company’s product mix is stabilizing as customers return to more normal operations. Grainger is thus investing in non-pandemic product inventory and partnering with suppliers to mitigate supply-related challenges, inbound lead time challenges and any possible cost increases. Investments in e-commerce and digital capabilities will yield results. Increased e-commerce sales and strong demand for non-pandemic products will continue to drive the top line. Cost control measures undertaken by the company will sustain margins.Lake Forest, IL-based Grainger is a broad line, business-to-business distributor of MRO supplies and other related products and services. This company currently has a Zacks Rank #2 (Buy) and an estimated long-term earnings growth rate of 13%. The Zacks Consensus Estimate for 2022 earnings has moved up 7% in the past 60 days. The consensus mark indicates year-over-year growth of 32.5%. GWW currently has a trailing four-quarter earnings surprise of 4.35%, on average.Price and Consensus: GWWSiteOne Landscape Supply: The company has been benefiting from robust demand as customers continue to invest in their outdoor living spaces. In addition to organic growth, it has been enhancing its business through acquisitions to increase its customer base, broaden product lines and expand its geographic reach. SITE acquired eight new high-performing companies in 2021, followed by three buyouts (JK Enterprise Landscape Supply, BellStone Masonry Supply and Preferred Seed) so far this year. The company will gain from its focus on cost reduction, driving operational excellence, product category management, enhancing supply chain efficiency and strengthening pricing. The company has been investing more in sophisticated information technology systems and data analytics.Roswell, GA-based SiteOne Landscape is a national wholesale distributor of landscape supplies. It currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the company’s earnings for fiscal 2022 indicates year-over-year growth of 9.8%. The estimate has moved up 5% in the past 60 days. The company has a trailing four-quarter earnings surprise of 129.9%, on average.Price and Consensus: SITEMSC Industrial Direct Company: The company has been committed to acquiring new companies to expand its product offering. It recently acquired Engman-Taylor, which will strengthen its metalworking business. MSM has been awarded a five-year contract to service 10 U.S. Marine core bases across the Continental United States, Hawaii and Japan, which will fuel revenues in the remaining part of fiscal 2022 and fiscal 2023. It continues to invest in technology and expand its e-commerce channel, which generates around 60% of its revenues. The company is improving its margin and operating leverage through Mission Critical productivity initiatives. It continues to expect $25 million in cost savings in fiscal 2022 and at least $100 million in total cost savings by the end of fiscal 2023.Melville, NY-based MSC Industrial distributes metalworking and maintenance, repair, and operations products and services in the United States, Canada, Mexico, and the U.K. The Zacks Consensus Estimate for MSM’s 2022 earnings has been revised upward by 6% in the past 60 days. The consensus mark indicates year-over-year growth of 26%. The company has a trailing four-quarter earnings surprise of 3.2%, on average. It currently carries a Zacks Rank #3.Price and Consensus: MSMScanSource: The company’s leadership position in large, niche markets along with sustained growth from innovative technology offerings across hardware, software, connectivity and cloud provide it with a competitive edge. The Specialty Technology Solutions segment has been benefiting from strong market demand, increases in big deals and market share gains. Digital acceleration and technology refresh initiatives with end-users are driving demand for the company’s channel partners. The Modern Communications & Cloud segment is gaining on the shift to cloud and subscriptions. The company has immense growth potential in both its segments. Its cost-control efforts will bolster margins. Its strategy to grow through acquisitions and alliances and enhance technology offerings and service capabilities is commendable.The Zacks Consensus Estimate for the ScanSource’s 2022 earnings has been revised upward by 15% in the past 60 days. The consensus mark indicates year-over-year growth of 46%. The Greenville, SC-based company, which distributes technology products and solutions, has a trailing four-quarter earnings surprise of 38.9%, on average. The company currently sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here. Price and Consensus: SCSC Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 W.W. Grainger, Inc. (GWW): Free Stock Analysis Report MSC Industrial Direct Company, Inc. (MSM): Free Stock Analysis Report ScanSource, Inc. (SCSC): Free Stock Analysis Report SiteOne Landscape Supply, Inc. (SITE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 21st, 2022

Will Industrial ETFs Gain From Improving US Output in May?

The latest update on the U.S. industrial output is encouraging as the world's largest economy continues to struggle with the persistently high-inflation levels. May’s recently released U.S. industrial output data looks decent despite the tough market conditions. Per the Fed’s recently-released data, total industrial production rose 0.2% in the month. The metric has been increasing in each month of 2022 so far until May, seeing an average monthly upside of about 0.8%.  However, a 0.1% dip in the manufacturing output is little worrying as the Fed is in a hawkish mood to control red hot inflation levels. The decline in the metric follows three months of growth averaging about 1%. There was a 1% rise in utility production. Moreover, mining production witnessed a 1.3% uptick, mainly on strength in the oil and gas sector.Considering the latest data release, investors can track ETFs like The Industrial Select Sector SPDR Fund (XLI), Vanguard Industrials ETF (VIS), Fidelity MSCI Industrials Index ETF (FIDU) and iShares U.S. Industrials ETF (IYJ), which might gain from an improving industrial output.Total industrial production increased 5.8% from the year-ago figure in May. According to the Fed’s report, the nondurable manufacturing index inched up 0.1% in May. The durable and other manufacturing (publishing and logging) indices were down 0.2% each in the month.Capacity utilization for the industrial sector came in at 79% in May, lagging its long-run (1972-2021) average by 0.5%. The manufacturing capacity utilization for the industry, the measure for studying how efficiently firms are utilizing their resources, slightly declined in May to 79.1%, up 1.0 percentage point from its long-run average, per the Fed’s report.U.S. Grapples With High Inflation LevelsThe world’s largest economy continues to struggle with the persistently high-inflation levels. Per the latest Labor Department report, the Consumer Price Index (CPI) jumped 8.6% year over year in May (the maximum since 1981), surpassing the already high Dow Jones estimate of an 8.3% rise. The metric compared unfavorably with the 8.3% rise in April.Energy, food and shelter stood out as major contributors to the surge in the index. Notably, energy prices rose 34.6% year over year, while gas prices jumped about 49%, according to a Yahoo Finance article.The core inflation index, which excludes volatile components, such as food and energy prices, rose 6% year over year, beating expectations of a 5.9% rise. The rising inflation levels once again dashed the hopes of inflation peaking in May.The continued steep inflation levels are also weighing on consumers’ sentiment in the United States. The growing supply-chain disturbances emanating from the ongoing Russia-Ukraine war crisis and the resurging COVID-19 cases in China might trigger concerns over further rising inflation levels.Fed Chair Jerome Powell raised interest rates by 75 basis points (bps), pushing the federal funds rate between 1.5% and 1.75% to subdue inflation through a tighter monetary policy. This marked the biggest interest-rate increase since 1994. Powell said that the Fed could hike rates by 50 or 75 bps at the July meeting and stressed that the policy will be "sensitive and flexible.” To control hot inflation readings, the Fed hiked rates twice by 0.25% and 0.50% in 2022. The central bank plans to start reducing its balance sheet in June this year.Industrial ETFs in FocusIn the current scenario, we believe, it is prudent to discuss ETFs with relatively high exposure to the industrial companies:The Industrial Select Sector SPDR Fund XLI           The Industrial Select Sector SPDR Fund seeks to provide investment results that before expenses, match the performance of the Industrial Select Sector Index. The Industrial Select Sector SPDR Fund has an AUM of $12.87 billion and an expense ratio of 0.10% (read: 5 Sector ETFs to Play Robust May Jobs Data).Vanguard Industrials ETF VIS                   Vanguard Industrials ETF offers exposure to the industrial sector and follows the MSCI US Investable Market Industrials 25/50 Index. Vanguard Industrials ETF manages an AUM of $3.25 billion and an expense ratio of 0.10%.Fidelity MSCI Industrials Index ETF FIDUThe Fidelity MSCI Industrials Index ETF seeks to provide investment returns that match, before fees and expenses, the performance of the MSCI USA IMI Industrials Index. Fidelity MSCI Industrials Index ETF has an AUM of $641.7 million and an expense ratio of 0.08%.iShares U.S. Industrials ETF IYJThe iShares U.S. Industrials ETF seeks to track the investment results of the Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index. iShares U.S. Industrials ETF has an AUM of $1.06 billion and an expense ratio of 0.41%, as stated in the prospectus.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 Vanguard Industrials ETF (VIS): ETF Research Reports Industrial Select Sector SPDR ETF (XLI): ETF Research Reports iShares U.S. Industrials ETF (IYJ): ETF Research Reports Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 20th, 2022

Top Research Reports for Pfizer, Booking & Dominion Energy

Today's Research Daily features new research reports on 16 major stocks, including Pfizer Inc. (PFE), Booking Holdings Inc. (BKNG), and Dominion Energy, Inc. (D). Friday, June 17, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Pfizer Inc. (PFE), Booking Holdings Inc. (BKNG), and Dominion Energy, Inc. (D). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>Pfizer shares have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+27.6% vs. +14.0%), reflecting the company's diversified portfolio of innovative drugs and vaccines including Ibrance and Prevnar. The Zacks analyst believes that no company is as strongly placed in the COVID vaccines/treatment market as Pfizer right now. Its COVID-19 vaccine has become a key contributor to the top line.The vaccine together with Pfizer’s promising oral antiviral pill for COVID-19, Paxlovid is expected to generate a combined $54 billion in sales in 2022. Pfizer boasts a sustainable pipeline with multiple late-stage programs that can drive growth. However, currency headwinds and pricing pressure are key top-line headwinds. Concerns remain about long-term growth drivers beyond its COVID-related products due to competitive pressure.(You can read the full research report on Pfizer here >>>)Booking shares have declined -15.6% over the past year against the Zacks Internet - Commerce industry’s decline of -48.7% on the back of steady improvement in booking trends. That said, the Zacks analyst sees uncertainties related to the economic outlook and ongoing coronavirus pandemic as still a headwind. Additionally, the company is experiencing solid momentum in international regions, which is a positive. Also, strong growth in rental car, airline ticket units and booked room nights is another positive. This apart, solid momentum across the agency, merchant, and advertising and other businesses is contributing well. The ongoing vaccination drive and lifting up of travel restrictions in many parts of the world remain major tailwinds. Further, strengthening alternative accommodation business and flight capabilities are major positives.(You can read the full research report on Booking here >>>)Dominion Energy shares have modestly outperformed the Zacks Utility - Electric Power industry over the past year (+1.9% vs. +1.6%). The company’s planned investment will strengthen the electric and natural gas infrastructure, and ensure consistent high-quality services for customers. Contribution from organic as well as inorganic assets will boost its earnings. The divestiture of Gas Transmission & Storage operations will increase Dominion Energy’s focus on regulated operations. New clean energy projects will help it achieve carbon neutrality by 2050. The company has enough liquidity to meet obligations. In the past six months, Dominion's shares have outperformed the industry.However, Dominion Energy's decision to discontinue the Atlantic Coast Pipeline after investing billions of dollars will impact long-term prospects. Risks of operating nuclear power plants and any failure by third-party producers to supply gas could impact profitability.(You can read the full research report on Dominion Energy here >>>)Other noteworthy reports we are featuring today include TotalEnergies SE (TTE), Marriott International, Inc. (MAR) and Nutrien Ltd. (NTR).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadPfizer's (PFE) 2022 Sales to Ride on COVID Vaccine & PillBooking Holdings (BKNG) Banks on Improving Customer BookingsInvestment on Infrastructure & Clean Assets Aid Dominion (D)Featured ReportsInorganic Growth Moves Aid UBS Amid Prevailing Costs WoesPer Zacks analyst, strong capital position and opportunistic expansions are likely to aid UBS' financials. However, escalating costs are a threat to the profitability.Marriott (MAR) Likely to Gain From Robust Expansion EffortsThe Zacks analyst believes that Marriott's efforts to expand its footprint and improving demand bode well. At the end of first-quarter 2022, Marriott's development pipeline totaled nearly 2,878 hotelsEcolab (ECL) Continues to Gain From Cost Efficiency ProgramThe Zacks analyst is upbeat about Ecolab's cost efficiency program which will likely deliver continued strong sales gains despite its operation in a stiff competitive space.Travelers' (TRV) Auto & Homeowners Aids, Cat Loss Ails Per the Zacks analyst, persistent progress and strong market of the auto and homeowners businesses have driven revenues of the company. However, exposure to cat loss induces earnings volatility.Cheniere (LNG) to Gain from Sustained Gas Export StrengthThe Zacks analyst believes that being one of the few liquefied natural gas exporters of the U.S., Cheniere Energy is set to capitalize on the sustained strength in shipments to Europe and Asia.nGartner (IT) Benefits From High-Quality Analysis OfferingThe Zacks analyst believes that Gartner's high-quality, timely, thought-provoking and comprehensive analysis offering helps it to counter growing competition.Sensata (ST) Benefits from Product Portfolio & AcquisitionsPer Zacks analyst, Sensata's performance is gaining from strength in product portfolio. Strategic acquisitions and growth across the heavy vehicle and industrial markets are major tailwinds.New UpgradesExpanding LNG & Clean Energy Assets Aid TotalEnergies (TTE)Per the Zacks analyst TotalEnergies's presence in entire LNG value chain and expansion of clean energy generation through joint venture and acquisition will boost its performance.Nutrien (NTR) Gains on Strong Demand and Higher Prices Per the Zacks analyst, the company will gain from solid demand for fertilizers driven by the strength in global agriculture markets. Higher prices for crop nutrients will also support its margins.Investments in E-Commerce & Cost Control Aid Grainger (GWW)Per the Zacks Analyst, Grainger will benefit from investments in e-commerce and digital capabilities, focus on strengthening customer base in the United States and cost control actions.New DowngradesStiff Competition for Tepezza Weighs Heavily on Horizon (HZNP)Per the Zacks analyst, Horizon's portfolio of marketed drugs faces intense competition from other healthcare companies. Also, the recent regulatory setback for Tepezza do not bode well for the companySupply Constraints to Hurt Hewlett Packard's (HPE) ProspectsPer the Zacks analyst, despite strong demand for its technology solutions, Hewlett Packard Enterprise might not be able to fully capitalize on opportunity due to supply-chain constraints.Higher Freight Costs Hurt Abercrombie's (ANF) Gross MarginsPer the Zacks analyst, the volatile supply environment and higher freight costs have been weighing on Abercrombie's gross margin. It expects higher costs to be a headwind throughout fiscal 2022. Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>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 Pfizer Inc. (PFE): Free Stock Analysis Report Marriott International, Inc. (MAR): Free Stock Analysis Report Dominion Energy Inc. (D): Free Stock Analysis Report Nutrien Ltd. (NTR): Free Stock Analysis Report Booking Holdings Inc. (BKNG): Free Stock Analysis Report TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 17th, 2022

Top Stock Reports for Oracle, Texas Instruments & Caterpillar

Today's Research Daily features new research reports on 16 major stocks, including Oracle Corporation (ORCL), Texas Instruments Incorporated (TXN), and Caterpillar Inc. (CAT). Wednesday, June 15, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Oracle Corporation (ORCL), Texas Instruments Incorporated (TXN), and Caterpillar Inc. (CAT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Oracle shares have notably held up better than the peer group in the ongoing market turmoil (the stock is down -6.9% over the past year against the Zacks Computer - Software industry’s decline of -13.0%) despite ramped up spending on product enhancements, especially toward the cloud platform, amid increasing competition in the cloud domain. That said, Oracle continues to benefit from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure services and Autonomous Database offerings.Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM), bodes well. Solid demand for the Oracle Dedicated Region Cloud@Customer is anticipated to drive the top line. Partnerships with Accenture and Microsoft is helping Oracle win new clientele. The company’s share buybacks and dividend policy are noteworthy.(You can read the full research report Oracle here >>>)Texas Instruments shares have declined -15.1% over the past year against the Semiconductor - General industry’s decline of -17.6%. The Zacks analyst believes that weakness in the personal electronics market remains a headwind. Further, intensifying market competition and coronavirus related uncertainties are concerns. However, the company is benefiting from solid rebound in the automotive market. Further, solid demand environment in the industrial, communication equipment and enterprise systems markets is a major positive.Additionally, solid momentum across Analog segment owing to robust signal chain and power product lines, is contributing well to the top line. Also, robust Embedded Processing segment is contributing well. Notably, solid investments in new growth avenues and competitive advantages remain tailwinds. The company’s portfolio of long-lived products and efficient manufacturing strategies are other positives.(You can read the full research report Texas Instrument here >>>)Caterpillar shares have modestly outperformed the Zacks Manufacturing - Construction and Mining industry over year-to-date basis (+1.3% vs. -0.9%) The Zacks analyst believes that due to surging commodity prices and the energy-transition trend, a thriving mining sector will aid the Resource Industries segment. Its dividend yield and payout ratio are higher than its peers. A strong liquidity position, investments in expanding services and digital initiatives will help Caterpillar deliver outsized returns in the long haul.However, company’s revenues and earnings grew year over year for five straight quarters thanks to its cost-saving actions, strong end-market demand and pricing actions that helped offset the impact of the ongoing supply chain snarls and cost pressures. We expect the company’s adjusted earnings per share for 2022 to grow 20% on 14% higher revenues. The Construction Industries segment is expected to benefit from the rising construction activities in the United States and other parts of the world.(You can read the full research report Caterpillar here >>>)Other noteworthy reports we are featuring today include Berkshire Hathaway Inc. (BRK.B), Lowe's Companies, Inc. (LOW), and Enbridge Inc. (ENB).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadOracle (ORCL) Gains from Cloud Suite Adoption & PartnershipsStrength in Enterprise Systems Aids Texas Instruments (TXN)Strong Demand, Strategic Initiatives Aid Caterpillar (CAT)Featured ReportsSolid Insurance Business Aid Berkshire (BRK.B), Cat Loss AilPer the Zacks analyst, Berkshire is posed to grow on solid insurance business that drive earnings and generates maximum return on equity. However, exposure to cat loss induces earnings volatility.Lowe's (LOW) to Benefit From Its Digital & Pro BusinessesPer the Zacks analyst, strong digital base is aiding Lowe's performance for a while. It is focused on enhancing the Pro offering with improved service levels, store layout and Pro national brands.Enbridge (ENB) Banks on C$10B Midstream Growth ProjectsPer the Zacks analyst, Enbridge will gain from the C$10 billion worth of secured midstream growth projects through 2025. However, significant debt exposure is a concern. America Movil (AMX) Benefits from Increasing Subscriber BasePer the Zacks analyst, America Movil's performance is gaining from increased broadband client base However, stiff competition and the firm's high leverage remain concerns.Strong Electrification Segment Benefits ABB, High Costs HurtPer the Zacks analyst, strong momentum in ABB's Electrification segment, led by strength in the power distribution utilities market, should drive its revenues. High operating costs remain a concern.Fee-Based Contracts, Wide-spread Assets Aid ONEOK (OKE)Per the Zacks analyst ONEOK benefits from long-term fee-based commitments in its all three segments and midstream assets located in very productive region drives operation.Kimco's (KIM) Grocery-Anchored, Last Mile Assets Aid GrowthPer the Zacks Analyst, Kimco will gain from its ownership of grocery-anchored centers and last mile assets in key metro markets. E-commerce adoption and drop in traffic at retail properties are woes.New UpgradesSysco (SYY) to Keep Gaining From Recipe for Growth ProgramPer the Zacks analyst, Sysco's Recipe for Growth has been aiding. This includes enhancing customers' experience via digital tools; improving supply chain and having team-based selling among others.W.R. Berkley (WRB) Set to Grow on Solid Insurance BusinessPer the Zacks analyst, W.R. Berkley's Insurance business is set to grow on rate increases, reserving discipline, and improving premiums from international unit supported by the emerging markets.Acquisition & Product Innovation Aids UFP Industries (UFPI)Per the Zacks analyst, UFP Industries benefits from accretive buyouts and introduction of new products.New DowngradesInternational Exposure & Old Facilities Ail NRG Energy (NRG)Per the Zacks analyst, NRG Energy's international operations expose it to political and economic risks and some of its old facilities create a competitive disadvantage against its peers.Declining LPD Sales & Foreign Exchange Woes Irk IDEXX (IDXX)The Zacks analyst is concerned about IDEXX's declining revenues within the Livestock, Poultry and Dairy segment. Unfavorable foreign exchange movements also continue to threaten business performance.Escalating Expenses Continue to Hurt Cooper Companies (COO)Per the Zacks analyst, escalating expenses, mainly due to higher selling and research and development costs, continue to restrict Cooper Companies' margin expansion. Zacks' Top Picks to Cash in on Electric Vehicles Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investorsSee 5 EV Stocks With Extreme Upside Potential >>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 Texas Instruments Incorporated (TXN): Free Stock Analysis Report Caterpillar Inc. (CAT): Free Stock Analysis Report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Enbridge Inc (ENB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 15th, 2022

Top Analyst Reports for Mastercard, Comcast & NextEra

Today's Research Daily features new research reports on 16 major stocks, including Mastercard Incorporated (MA), Comcast Corporation (CMCSA), and NextEra Energy, Inc. (NEE). Wednesday, June 8, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Mastercard Incorporated (MA), Comcast Corporation (CMCSA), and NextEra Energy, Inc. (NEE). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>Mastercard shares have outperformed the Zacks Financial Transaction Services industry over the past year (+0.7% vs. -30.3%) as well as rival Visa (-15.9%). The company’s profit levels are rising thanks to increasing consumer spending. Numerous acquisitions are helping it to grow addressable markets and drive new revenue streams. The COVID-19 crisis accelerated the use of electronic payments with much greater adoption of digital and contactless solutions. The situation provides an opportunity for Mastercard's business to expedite its shift to digital mode. Its focus on the Southeast Asia and LatAm markets is expected to intensify.The company is well-poised to gain from steady cash-generating abilities. A strong capital position allows the firm to pursue acquisitions and deploy capital. However, steep operating expenses might stress margins. High rebates and incentives may weigh on net revenues. As such, the stock warrants a cautious stance.(You an read the full research report on Mastercard here >>>)Comcast shares have declined -22.7% over the past year against the Zacks Cable Television industry’s decline of -24.9%. The Zacks analyst believes that the company persistently suffering from video-subscriber attrition due to cord-cutting. Moreover, a leveraged balance sheet is a major concern. Nevertheless, Comcast is benefiting from strength in broadband subscriber base and strong momentum in the wireless business. The company’s strategy to provide high-speed Internet at an affordable price plays a pivotal role in providing connectivity and improving customer experience.Moreover, COVID-led increased media consumption and the work-from-home and online-learning waves bode well for Comcast’s Internet business. The company’s streaming service Peacock gained significant traction within a short span and is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.(You can read the full research report on Comcast here >>>)NextEra Energy shares have gained +12.3% over the past year against the Zacks Utility - Electric Power industry’s gain of +13.6%. The Zacks analyst believes that the company through proper execution of organic projects and strategic acquisitions is expanding its operations and efficiently serving more customers. NextEra Energy currently has a lot of renewable projects in its backlog and the number is rising every quarter, which is aiding NextEra to cut emissions.The merger of Gulf Power and FPL strengthens NextEra Energy’s position in Florida. Improving Florida economy and FPL’s reliable services is expanding its customer volume in every quarter. The company has ample liquidity to meet its near-term debt obligations. However, nature of its business is subject to complex federal, state and other regulations. Unfavorable weather conditions and an increase in supply costs adversely impact earnings.(You can read the full research report on NextEra Energy here >>>)Other noteworthy reports we are featuring today include TotalEnergies SE (TTE), Mondelez International, Inc. (MDLZ), and Freeport-McMoRan Inc. (FCX).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadMastercard's (MA) Accretive Buyouts Aid, Elevated Costs HurtBroadband Subscriber Gain Drives Comcast's (CMCSA) ProspectsSteady Investment & Renewable Focus Aid NextEra Energy (NEE)Featured ReportsConocoPhillips (COP) Banks On Oil-Rich Bakken Shale AssetsThe Zacks analyst is upbeat about ConocoPhillips' 750 undrilled locations in the Bakken Shale play, which will drive oil production growth. Yet, rising production and operating costs are concerning.Mondelez International's (MDLZ) Top Line Gains from BuyoutsPer the Zacks analyst, Mondelez International has been gaining from its prudent acquisitions. Contributions from Chipita, Grenade and Gourmet Food buyouts contributed to its top line in first quarter.Exploration Progress, Debt Reduction to Aid Freeport (FCX)Per the Zacks analyst, Freeport will gain from its progress in exploration activities to expand production capacity and efforts to deleverage balance sheet amid headwind from higher costs.Project Investments, Productivity to Aid Air Products (APD)While Air Products faces headwinds from higher power and fuel costs, it should gain from investments in high-return industrial gas projects and productivity actions, per the Zacks analyst.Aspen (AZPN) to Gain From Product Portfolio & AcquisitionsPer the Zacks analyst, Aspen's diversified product portfolio is witnessing heathy momentum. The integration with Emerson's OSI Inc and the Geological Simulation Software business also bodes well.Chemed's (CHE) Roto-Rooter Arm Grows Despite Staffing IssuesThe Zacks analyst is upbeat about Chemed's Roto-Rooter arm that continues to see robust demand for commercial and residential services. However, Roto-Rooter remains understaffed in several markets.Increase in Membership Aid Planet Fitness (PLNT), Traffic Low Per the Zacks analyst, Planet Fitness is likely to benefit from increased membership levels, marketing initiatives and expansion efforts. Decline in traffic from pre-pandemic levels is a concern.New UpgradesExpanding LNG & Clean Energy Assets Aid TotalEnergies (TTE)Per the Zacks analyst TotalEnergies's presence in entire LNG value chain and expansion of clean energy generation through joint venture and acquisition will boost its performance.Imperial (IMO) to Gain from Majority Holding by ExxonMobilThe Zacks analyst believes that Imperial Oil's financial backing by majority owner ExxonMobil adds to the company's economic stability and helps it to access cheap capital.Loan Demand, Higher Rates Aid SVB Financial (SIVB) RevenuesPer the Zacks analyst, SVB Financial is likely to benefit from a solid balance sheet, higher rates and solid loan demand. Global expansion strategy and acquisitions are also expected to aid growth.New DowngradesPerrigo (PRGO) Faces Pricing Pressure, Stiff CompetitionPer the Zacks analyst, Perrigo's revenues continue to be unfavourably impacted by pricing and other macro-economic pressures. Stiff competition remains a threat as well.Zumiez (ZUMZ) Witnesses High SG&A Costs & Supply-Chain IssuesPer the Zacks analyst, Zumiez is witnessing higher SG&A costs for a while, which has been hurting margins. Also, global supply-chain issues, logistics costs and a tight labor market are concerns.Challenging Market, High Costs Hurt Artisan Partners (APAM)Per the Zacks analyst, challenging operating backdrop and geopolitical concerns might disrupt traditional asset allocations for Artisan Partners. Rising costs are likely to impede the bottom line. Zacks' Top Picks to Cash in on Electric Vehicles Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investorsSee 5 EV Stocks With Extreme Upside Potential >>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 NextEra Energy, Inc. (NEE): Free Stock Analysis Report Mastercard Incorporated (MA): Free Stock Analysis Report Comcast Corporation (CMCSA): Free Stock Analysis Report FreeportMcMoRan Inc. (FCX): Free Stock Analysis Report Mondelez International, Inc. (MDLZ): Free Stock Analysis Report TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 8th, 2022

Top Stock Reports for Citigroup, Prologis & ADP

Today's Research Daily features new research reports on 16 major stocks, including Citigroup Inc. (C), Prologis, Inc. (PLD), and Automatic Data Processing, Inc. (ADP). Tuesday, June 7, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Citigroup Inc. (C), Prologis, Inc. (PLD), and Automatic Data Processing, Inc. (ADP). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>> Citigroup shares have declined -13.6% over the year-to-date basis against the Zacks Banks - Major Regional industry’s decline of -13.1%, reflecting the numerous investigations and lawsuits along with uncertainty around the new management team's turnaround plans.However, the company is advancing with its strategy to exit the consumer banking business in 14 international markets, Citigroup completed the sale of its Australian consumer business to National Australia Bank Limited (“NAB”). It targets a return on average tangible common shareholder equity (RoTCE) of 11-12% for the next three to five years. Moreover, net interest income growth, decent liquidity and capital deployment plans are positives.(You can read the full research report Citigroup here >>>)Prologis shares have outperformed the Zacks REIT and Equity Trust - Other industry over the past year (+4.6% vs. -2.8%). The Zacks analyst believes that the company has the capacity to offer high-quality facilities in key markets and with its robust balance-sheet strength, it is well-poised to bank on the favorable trends in the industrial real estate industry. Along with the fast adoption of e-commerce, this asset category is poised to gain from a likely rise in inventory levels.However, the rising supply of industrial real estate in several markets might fuel competition and curb pricing power. Also, the stabilization of e-commerce sales growth is a concern for rental rate growth.(You can read the full research report Prologis here >>>)ADP shares have outperformed the Zacks Outsourcing industry over the past year (+11.7% vs. +10.5%). The Zacks analyst believes that the company continues to enjoy a dominant position in the human capital management market through strategic buyouts like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company. It has a strong business model, high recurring revenues, good margins, robust client retention and low capital expenditure. Further, it continues to innovate, improve operations and invest in its ongoing transformation efforts.However, ADP faces significant competition in each of its product lines. Failure to remain technologically updated might reduce the demand for its solutions and services. Rising expenses due to investment in transformation efforts remains a concern. High debt remains a concern.(You can read the full research report ADP here >>>)Other noteworthy reports we are featuring today include Occidental Petroleum Corporation (OXY), Keurig Dr Pepper Inc. (KDP), and CrowdStrike Holdings, Inc. (CRWD).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadCitigroup (C) Proceeds With Strategic Sell Offs, Costs RiseExpansion Moves Amid Industry Tailwinds to Aid Prologis (PLD)ADP Rides on Strategic Buyouts Amid Technological ChallengesFeatured ReportsAmid High Debt Level, Permian Focus Aids Occidental (OXY)Per the Zacks analyst Occidental's high long-term debt level is a concern but its expanded operation in resource rich Permian Basin will boost operation in the long-run.Strength in Packaged Beverages Aids Keurig Dr Pepper (KDP)Per the Zacks analyst, Keurig Dr Pepper's top line continues to gain from solid demand and robust volume/mix for packaged beverages. Q1 sales grew 6.1% year over year and 17.5% on a two-year basis.CrowdStrike (CRWD) Rides on Product Strength, AcquisitionsPer the Zacks analyst, CrowdStrike is gaining from solid contributions of its growth-oriented products, primarily Falcon platform. Also, strategic buyouts like SecureCircle and Humio are a positive.nIllumina (ILMN) Banks on Strategic Pacts amid Stiff RivalryThe Zacks analyst is optimistic about lllumina's expansion strategy through new purchases and strategic partnerships. Yet, stiff competition remains a concern.Low Breakeven Costs to Aid Marathon Oil's (MRO) Cash FlowsThe Zacks analyst believes that Marathon's extremely low oil price breakeven costs of just $35 a barrel should generate meaningful free cash flows and improve future profitability.nMonolithic Power (MPWR) Rides on Solid 5G, Automotive DemandPer the Zacks analyst, Monolithic Power is likely to gain from solid demand across the automotive, industrial, computing and storage and communications markets driven by the rapid deployment of 5G.Strong Linzess Demand Amid Competition Drives Ironwood (IRWD)Per the Zacks analyst, Ironwood's dependence on sole marketed drug Linzess is a concern amid rising competition in the targeted segment. However, strong growth in Linzess sales provides a respite.New UpgradesMonolithic Power (MPWR) Rides on Solid 5G, Automotive DemandPer the Zacks analyst, Monolithic Power is likely to gain from solid demand across the automotive, industrial, computing and storage and communications markets driven by the rapid deployment of 5G.Solid Demand & New Products to Aid Lincoln Electric (LECO)The Zacks analyst believes Lincoln Electric is poised to benefit from the improving demand in all its end markets, focus on developing new products and investment to grow in automation.Downstream Expansion, Acquisitions to Aid Huntsman (HUN) Per the Zacks analyst, the company should gain from actions to expand its downstream specialty and formulation businesses. Acquisitions are also expected to offer significant synergies.New DowngradesSoft Gross Margin a Concern for The Children's Place (PLCE)Per the Zacks analyst, Children's Place's gross margin has been hit by higher inbound transportation costs and deleverage of fixed costs due to lower net sales. It expects margin to be under pressure.Higher Production Costs Hurt Lionsgate's (LGF.A) ProspectsPer the Zacks analyst, Lionsgate is suffering from higher movie production costs. A leveraged balance sheet is a concern.Mortality Claims, High Debts Hurt Lincoln National (LNC)Per the Zacks Analyst, the continued incidence of COVID-related mortality and morbidity claims might dampen the company's margins. The high debt level remains a concern. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Citigroup Inc. (C): Free Stock Analysis Report Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report Prologis, Inc. (PLD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 7th, 2022

Will ETFs Gain From Improving US Industrial Output in April?

The latest update on the U.S. industrial output is encouraging amid the current market turbulence. April’s encouraging U.S. industrial output data has brought some hope despite the current turbulent market conditions. Per the Fed’s recently-released data, total industrial production rose 1.1% in the month. It stood out as the fourth straight month of gains of 0.8% or higher. Moreover, a 0.8% increase in the manufacturing output also looks positive. There was a 2.4% rise in utility production. Moreover, mining production witnessed a 1.6% uptick, mainly due to strength in the oil and gas sector.Considering the latest data release, investors can track ETFs like The Industrial Select Sector SPDR Fund (XLI), Vanguard Industrials ETF (VIS), Fidelity MSCI Industrials Index ETF (FIDU) and iShares U.S. Industrials ETF (IYJ), which might gain from an improving industrial output.Total industrial production increased 6.4% from the year-ago figure in April. According to the Fed’s report, the durable and the nondurable manufacturing indexes inched up 1.1% and 0.3%, respectively, in April. The other manufacturing (publishing and logging) index was also up 0.9% in the month.Capacity utilization for the industrial sector expanded to 79% in April. The manufacturing capacity utilization for the industry, the measure for studying how efficiently firms are utilizing their resources, increased 0.6% in April to 79.2%, up 1.1 percentage points from its long-run average, per the Fed’s report (the highest level since April 2007).Present U.S. Economic ScenarioThe world’s largest economy continues to struggle with the persistently high-inflation levels. Per the latest Labor Department report, the Consumer Price Index (CPI) jumped 8.3% year over year in April, surpassing the already high Dow Jones estimate of an 8.1% rise. The metric, however, compared favorably with the 8.5% rise (the maximum since December 1981) in March.The core inflation index, which excludes volatile components, such as food and energy prices, rose 6.2% year over year, beating the expectations of a 6% rise. The rising inflation levels dashed the hopes of inflation peaking in March.The continued steep inflation levels are also weighing on consumer confidence in the United States. The growing supply-chain disturbances, emanating from the ongoing Russia-Ukraine war crisis and the resurging COVID-19 cases in China, might trigger concerns over a further rising inflation level.The Conference Board's measure of consumer confidence index stands at 107.3 in April 2022 compared with 107.6 in March. Moreover, April’s reading missed the consensus estimate of 108, per a Reuters survey of economists. Also, the metric continues to be below the pre-pandemic level of 132.6 achieved in February 2020.However, certain U.S. economic data releases have been encouraging so far. The Department of Commerce reported that retail sales in April were up 0.9% month over month, marginally below the consensus estimate of 1%. Year over year, retail sales grew 8.2% in April.Industrial ETFs in FocusIn the current scenario, we believe, it is prudent to discuss ETFs with relatively high exposure to the industrial companies:The Industrial Select Sector SPDR Fund XLI           The Industrial Select Sector SPDR Fund seeks to provide investment results that before expenses, match the performance of the Industrial Select Sector Index. The Industrial Select Sector SPDR Fund has an AUM of $13.67 billion and an expense ratio of 0.10% (read: Can Industrial ETFs Gain on Mixed Q1 Earnings?).Vanguard Industrials ETF VIS                   Vanguard Industrials ETF offers exposure to the industrial sector and follows the MSCI US Investable Market Industrials 25/50 Index. Vanguard Industrials ETF manages an AUM of $3.44 billion and an expense ratio of 0.10%.Fidelity MSCI Industrials Index ETF FIDUThe Fidelity MSCI Industrials Index ETF seeks to provide investment returns that match, before fees and expenses, the performance of the MSCI USA IMI Industrials Index. Fidelity MSCI Industrials Index ETF has an AUM of $708.5 million and an expense ratio of 0.08%.iShares U.S. Industrials ETF IYJThe iShares U.S. Industrials ETF seeks to track the investment results of the Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index. iShares U.S. Industrials ETF has an AUM of $1.29 billion and an expense ratio of 0.41%, as stated in the prospectus. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it 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 Vanguard Industrials ETF (VIS): ETF Research Reports Industrial Select Sector SPDR ETF (XLI): ETF Research Reports iShares U.S. Industrials ETF (IYJ): ETF Research Reports Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 21st, 2022

Futures Jump Amid Optimism China"s Covid Lockdowns Are Ending

Futures Jump Amid Optimism China's Covid Lockdowns Are Ending Another day, another dead cat-bouncing, bear market rally. After Monday's flattish session which saw tech names slump on fresh inflation fears, Nasdaq futures rebounded on Tuesday, setting up technology stocks for solid gains after a six-week rout as investors were encouraged by China's easing covid lockdowns and amid speculation that Beijing regulators may ease a yearlong clampdown on internet companies at an upcoming meeting with tech executives. Nasdaq 100 futures jumped 2% by 7:00 a.m. in New York after the underlying gauge sank on Monday on concerns about a slowdown in economic growth; S&P 500 futures rose 1.6%. Treasury yields rose modestly above 2.90%, and the dollar retreated. Bitcoin managed to rebound back over $30K. Confirming what we said almost three weeks ago, Shanghai reported three days of zero community transmission, a milestone that could lead officials to start unwinding a punishing lockdown. However, flareups elsewhere in China showed how hard it is to tackle the omicron strain. Among notable moves in US premarket trading, Twitter shares fell 3.3%, set to extend declines for an eighth straight session amid uncertainties around the deal with Elon Musk, while Citigroup rose 4.9% after Warren Buffett’s Berkshire Hathaway unexpectedly disclosed a new stake in the lender, a return to banks for the billionaire who purged many of his bank holdings several years ago. Tech names including Advanced Micro Devices, Tesla and Nvidia were among the biggest premarket gainers as growing recession concerns prompt markets to reasses just how many rate hikes the Fed will pull off before it is forced to reverse. Cryptocurrency-exposed stocks climbed as Bitcoin rose above $30,000 on Tuesday in cautious trading, with the fallout from a collapsed stablecoin continuing to keep sentiment in check. Chinese stocks in US jumped across the board in premarket trading on speculation that regulators may ease a yearlong clampdown on internet companies at an upcoming meeting with tech executives. Here are the most notable premarket movers: Twitter (TWTR US) shares fell 2.4% in premarket trading, on course to extend their seven-day streak of declines, as uncertainties around a deal by buyer Elon Musk weigh on the stock. Tesla (TSLA US) shares rallied 3% in premarket trading. Chinese stocks in US jump across the board in premarket trading on speculation that regulators may ease a yearlong clampdown on internet companies at an upcoming meeting with tech executives. Alibaba (BABA US) +6.2%, JD.com (JD US) +5.6%, Pinduoduo (PDD US) +7% and Baidu (BIDU US) +3.6% Cryptocurrency-exposed stocks climb in US premarket as Bitcoin rises above $30,000 on Tuesday in cautious trading, with the fallout from a collapsed stablecoin continuing to keep sentiment in check. Riot Blockchain (RIOT US) +7.8%; Coinbase (COIN US) +6.8%; Marathon Digital (MARA US) +6.1% Advanced Micro Devices (AMD US) upgraded to overweight from neutral at Piper Sandler, which says in note that the company’s core businesses are running well and mid-to-long-term catalysts remain intact. Stock gains 3.6% in New York premarket trading. United Airlines Holdings’ (UAL US) updated second-quarter guidance is “a solid step in the right direction,” Citi says. United’s shares gained 4.3% in premarket trading. Bird Global (BRDS US) shares jump as much as 40% in US premarket trading with DA Davidson noting management’s announcement of a plan to streamline operations. Take-Two (TTWO US) reported better-than-expected fourth-quarter earnings helped by popular video games like NBA 2K22. The company’s shares rise 5.4% in premarket trading. Global-e Online (GLBE US) shares slump as much as 30% in US premarket trading as analysts slash their price targets on the e-commerce software firm after it lowered its full-year guidance for revenue and gross merchandise value. Imperial Petroleum (IMPP US) shares plunge 48% in US premarket trading. The shipping company priced an underwritten public offering of 72.7m units at $0.55 per unit, with expected gross proceeds of ~$40m. US stocks have been roiled in the past six weeks as the combination of high inflation and hawkish central banks fueled fears of a potential recession. While some strategists including Morgan Stanley’s Michael Wilson expect equities to fall further before finding a floor, they don’t foresee a recession as their base case. The main focus today will be on US retail sales data, which are expected to show a rise of 1% in April. “Investors’ appetite for riskier assets is on the rise after many welcomed today’s positive unemployment and GDP figures” from the eurozone and UK, said Pierre Veyret, an analyst at ActivTrades Plc. “The improving virus situation in China is also blowing a wind of relief in investors’ trading minds.” A challenging global economic outlook amid elevated food and record fuel costs, and tightening monetary settings continues to shape sentiment.  Oil has jumped to about $114 a barrel and an index of agricultural prices is at a record high. But one bond-market measure - the five-year breakeven rate - is signaling inflation has peaked, while the latest virus developments raised hopes China’s damaging lockdowns may soon be eased. On Monday, New York Fed President John Williams on Monday downplayed deteriorating liquidity conditions in financial markets, saying it was to be expected as investors grapple with uncertainty over global events and shifting U.S. monetary policy. No less than six Fed speakers - including Chair Jerome Powell - are due to speak later Tuesday. In Europe, technology and basic-resources stocks led a broad-based advance of the Stoxx Europe 600 following a rally in Chinese tech shares on optimism Beijing may ease up on a yearlong clampdown. Italy's FTSE MIB adds 1.6%, FTSE 100 lags, adding 0.7%. Miners, financial services and banks are the strongest-performing sectors. Equities were also buoyed by data showing the euro-area economy expanded more than initially estimated at the start of the year as the region moved past a wave of Covid-19 infections and defied headwinds from the early days of the war in Ukraine. Here are the biggest European movers: Clariant shares rise as much as 8.7% after the specialty chemical company announced its governance agreement with SABIC will expire at the June 24 AGM, and won’t be renewed. Imperial Brands climbs as much as 7.9% after the tobacco company reduced its losses from next-generation products and continued on a turnaround plan. Daimler Truck gains as much as 7.8% in Frankfurt; Oddo BHF notes strong 1Q report that will reassure in the current environment, while Citi says the company delivered an “encouraging” set of results. Engie rises as much as 6.9%, hitting the highest since March 1, after the French energy company boosted its profit guidance on higher European energy prices. CaixaBank advances as much as 5.4% after the Spanish lender released a new strategic plan that predicts a jump in a key profitability metric and announced a EU1.8b share buyback program. Prosus and Naspers both raised to overweight from neutral at JPMorgan following the broker’s upgrade of Tencent. Prosus shares gain as much as 6.5% in Amsterdam, Naspers climbs as much as 6.7% in Johannesburg. ContourGlobal gains as much as 34% after US private equity firm KKR agreed to buy the power generation business for 263.6p/share in cash, representing a premium of 36% to Monday’s close. Vodafone erases losses after dropping as much as 4.2% as the telecom operator’s forecast for adjusted Ebitda after-leases missed consensus estimates at mid- point. Earlier in the session, Asian stocks advanced for a third day -- its longest winning streak since mid-March -- amid a jump in some technology firms on the back of hopes for an unwind of Chinese lockdowns that have hurt the global economic outlook as well as a dialing back of Beijing’s regulatory crackdowns. The MSCI Asia-Pacific Index climbed as much as 1.5%, on track for a third day of gains. Chinese tech giants Tencent and Alibaba contributed most to the gain, while chipmakers TSMC and Samsung also helped. Shanghai reported no new Covid infections in the broader community for a third day, hitting a crucial milestone toward reduced restrictions. China’s top political advisory body is hosting a meeting Tuesday with some of the nation’s largest private-sector firms, sparking hopes for an improved business climate.  “The mood in Asia is risk on,” said Xue Hua Cui, a China equity analyst at Meritz Securities in Seoul. “Whether this remains a dead cat bounce or not depends on how quickly demand recovers following the end of Shanghai lockdowns.” Hong Kong outperformed, with the Hang Seng Index rising more than 3%. Benchmarks in India also advanced more than 2%, even as state-run insurer Life Insurance Corporation of India dropped in its Mumbai trading debut after a record initial public offering for the nation.  Japanese equities gained with Asian peers amid hopes that China will ease up on Covid lockdowns and regulatory crackdowns. The Topix rose 0.2% to close at 1,866.71. Tokyo time, while the Nikkei advanced 0.4% to 26,659.75. Recruit Holdings contributed the most to the Topix gain, rising 2% after its earnings report. Out of 2,172 shares in the index, 1,164 rose and 932 fell, while 76 were unchanged. Australia's S&P/ASX 200 index rose 0.3% to close at 7,112.50, taking its winning run to a third session. Miners and banks contributed the most to the gauge’s advance. Beach Energy was among the top performers, climbing with other energy shares as oil rallied. Brambles was the biggest laggard after saying CVC won’t be putting forward a proposal for the pallet maker. Investors also assessed minutes from the RBA’s May meeting. The central bank said it considered three options for the size of its first interest-rate increase since 2010. In New Zealand, the S&P/NZX 50 index fell 0.2% to 11,137.88. India’s key gauges surged on Tuesday, boosted by Reliance Industries Ltd. which climbed the most since early March. Still, Life Insurance Corp. of India, the country’s biggest listing so far, slumped on debut. The S&P BSE Sensex rose 2.5%, its biggest jump in three months, to 54,318.47 in Mumbai, while the NSE Nifty 50 Index advanced 2.6%. All of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of metal companies. Reliance Industries advanced 4.2%, providing the biggest boost to the Sensex, which had all 30 members trading higher.  “It’s a much-needed breather for the bulls after five weeks of slide and we may further rise,” said Ajit Mishra, vice-president research at Religare Broking Ltd. “Since all the sectors are participating in the rebound, we suggest focusing more on stock selection. Despite strong gains in the broader market, shares in the state-controlled insurer plunged 7.8%, following a $2.7 billion IPO, India’s biggest on record. The stock trimmed losses from the low, but failed to touch the listing price in the session. LIC’s first-day performance makes for the second-worst debut among 11 global companies that listed this year after raising at least $1 billion through first-time share sales.  In FX, the Bloomberg Dollar Spot Index fell a third consecutive day and the greenback weakened against all of its Group-of-10 peers apart from the yen. The pound lead G-10 gains followed by Scandinavian and Antipodean currencies. The pound rallied and gilts slumped across the curve after a stronger-than-expected reading of the UK employment data stoked speculation that a tighter labor market may prompt the BOE to continue its monetary tightening cycle beyond a widely expected rate rise next month. Average weekly earnings surged 7% in the three months through March, compared to the 5.4% figure economists had expected. The euro rose on the back of a broadly weaker dollar. Bunds slid as haven demand was unwound. Italian bonds also tumbled as money markets wagered on up to 98bps of ECB hikes by December. The Aussie strengthened for a third day while Australia’s sovereign bonds fell after minutes from RBA’s May meeting indicated the central bank considered an outsized rate hike. The RBA said it considered three options for the size of its first interest-rate increase since 2010, according to minutes of its May 3 policy meeting, when it raised the cash rate by 25 basis points. The Australian and New Zealand dollars also benefitted from expectations that Covid lockdowns in Hong Kong and Shanghai will be lifted. The yen gave up earlier gains as US yields resumed their climb, which also weighed on Japan government bonds. In rates, yields rose as Treasuries cheapened with losses led by front-end of the curve, following a sharper bear flattening move across EGBs after ECB Governing Council member Klaas Knot said he supports a quarter-point increase in interest rates in July and that a bigger move may be justified if data show inflation worsening. US Treasury yields cheaper by up to 5.5bp across front-end of the curve, the 10Y TSY trading at 2.91% last and flattening 2s10s spread by 2.2bp on the day; 2-year German yields cheaper by 23bp on the day following Knot comments while German 10s are cheaper by 4bp vs. Treasuries. In U.S. session, focus on a stacked Fed speaker slate led by Chair Jerome Powell who will be interviewed during a Wall Street Journal live event in the afternoon. The Dollar issuance slate includes Export Development Canada 5Y SOFR, OKB 3Y SOFR and JICA 5Y SOFR; six deals priced $9.1n Monday in order books that were 3.3x oversubscribed In commodities, WTI drifts 0.2% higher to trade at around $114. Spot gold rises roughly $3 to trade above $1,825/oz. Base metals are mixed; LME tin falls 1.6% while LME zinc gains 2.4%. European gas prices hit four-week low after EU revised guidelines for purchases of Russian supplies. To the day ahead now, and there’s an array of central bank speakers including Fed Chair Powell, along with the Fed’s Bullard, Harker, Kashkari, Mester and Evans, ECB President Lagarde and BoE Deputy Governor Cunliffe. Data releases include US retail sales, industrial production and capacity utilisation for April, along with the NAHB’s housing market index for May. Elsewhere, there’s also the UK unemployment reading for March. Finally, earnings releases include Walmart and Home Depot. Market Snapshot S&P 500 futures up 1.3% to 4,057.75 STOXX Europe 600 up 1.6% to 440.47 MXAP up 1.4% to 162.83 MXAPJ up 2.2% to 535.18 Nikkei up 0.4% to 26,659.75 Topix up 0.2% to 1,866.71 Hang Seng Index up 3.3% to 20,602.52 Shanghai Composite up 0.6% to 3,093.70 Sensex up 2.1% to 54,080.42 Australia S&P/ASX 200 up 0.3% to 7,112.53 Kospi up 0.9% to 2,620.44 German 10Y yield little changed at 0.99% Euro up 0.4% to $1.0480 Brent Futures up 0.3% to $114.53/bbl Gold spot up 0.2% to $1,827.11 U.S. Dollar Index down 0.42% to 103.75 Top Overnight News from Bloomberg The euro-area economy grew more than initially estimated at the start of the year as the region moved past a wave of Covid-19 infections and defied headwinds from the early days of the war in Ukraine. Economic output rose 0.3% in the first quarter, exceeding a flash reading of 0.2%, according to Eurostat data released Tuesday. Employment, meanwhile, gained 0.5% during same period The UK will lay out its plan to amend its post-Brexit trade deal Tuesday in a direct challenge to the European Union, which is insisting that Prime Minister Boris Johnson must honor the agreement he signed China’s main bond trading platform for foreign investors has quietly stopped providing data on their transactions, a move that may heighten concerns about transparency in the nation’s $20 trillion debt market after record outflows The American and European Union chambers of commerce in separate briefings said their members are rethinking their supply chains and whether to expand investment in the face of China’s zero tolerance approach to combating Covid-19 Turkish President Recep Tayyip Erdogan said he won’t allow Sweden and Finland to join NATO because of their stances on Kurdish militants, throwing a wrench into plans to strengthen the western military alliance after Russia’s invasion of Ukraine A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were positive but with gains capped after the uninspiring lead from Wall St and growth concerns. ASX 200 was kept afloat by strength in the commodity-related sectors after recent gains in underlying prices. Nikkei 225 traded marginally higher with Japan seeking to pass an extra budget by month-end and will begin permitting entry to a small number of tourists. Hang Seng and Shanghai Comp were both firmer with tech spearheading the outperformance in Hong Kong amid hopes of an easing of the crackdown on the sector, while the mainland lagged amid economic concerns and despite Shanghai reporting no cases outside of quarantine for a 3rd consecutive day. Top Asian News China's state planner said China's economy faces increasing downward pressure, while it will step up support for manufacturing companies, contact-intensive services, small companies and home businesses, according to Reuters. Senior Chinese officials are to meet with tech industry chiefs today amid talk of crackdown easing, according to Nikkei. It was later reported that China's top political consultative body began a conference on promoting the sustainable and healthy development of the digital economy, according to state media. Hong Kong Chief Executive Carrie Lam said they will proceed with the planned COVID curbs easing on May 19th, according to Bloomberg. BoJ Deputy Governor Amamiya said it is important to continue current powerful easing to firmly support the economy and that long-term interest rates have been stable since the adoption of fixed-rate operations, while he added that if monetary easing is reduced now, it would make the 2% price goal an even more distant target, according to Reuters. Japan is to permit small groups of tourists to visit this month as a trial ahead of its border reopening, according to Japan Times. European bourses are firmer across the board, Euro Stoxx 50 +1.7%, taking impetus from and extending on a positive APAC handover as the regions COVID situation improves. Stateside, futures are firmer across the board, ES +1.8%, following yesterday's  relatively lacklustre session with participants awaiting numerous Fed speak, including Chair Powell. Twitter (TWTR) prospective purchaser Musk says that his offer was based on the Co.'s SEC filing being accurate, however, yesterday the CEO refused to show proof of less than 5% of fake/spam accounts; deal cannot move forward until this has been disclosed. -3.5% in the pre-market. Home Depot Inc (HD) Q1 2023 (USD): EPS 4.09 (exp. 3.67/3.67 GAAP), Revenue 38.9bln (exp. 36.71bln); Raises Fiscal 2022 Guidance. +2.5% in the pre-market Top European News UK Foreign Secretary Truss is to declare her intention to bring forward legislation that rips up parts of the post-Brexit trade deal on Northern Ireland, according to LBC. Expected around 12:30BST/07:30ET Irish Foreign Minister Coveney says he spoke with UK Foreign Minister Truss on Monday, notes the EU and UK sides haven't met since February and says it is "time to get back to the table" ECB is expected to raise the deposit rate in July according to 39 out of 39 respondents in a Reuters survey, while 26 out of 48 economists see the deposit rate at 0% in Q3 and 21 out of 48 see the deposit rate at 0.25% in Q4. FX Pound the standout G10 performer in wake of outstanding UK labour report; Cable clears string of resistance levels on the way towards 1.2500 and EUR/GBP probes 0.8400 after breaching technical supports . Kiwi and Aussie relish renewed risk appetite and latter also helped by hawkish RBA minutes; NZD/USD above 0.6350 and 1.3bln option expiries at 0.6300, AUD/USD back on 0.7000 handle. Greenback concedes ground ahead of top tier US data and raft of Fed speakers including chair Powell, DXY down to 103.470 vs 104.320 at best; latest session low in wake of ECB's Knot. Franc, Euro and Loonie all up at the expense of the Buck but latter also fuelled by WTI topping USD 115/bbl; USD/CHF sub-parity, EUR/USD surpassing 1.05 in wake of hawk-Knot and USD/CAD near 1.2800. Yen lags as risk sentiment improves and yields outside of Japan rebound firmly; USD/JPY rebounds through 129.00 and just over 129.50. Norwegian Crown boosted by Brent in stark contrast to crude import dependent Turkish Lira and Indian Rupee; EUR/NOK under 10.1500, USD/TRY touches 15.8850 and USD/INR crosses 78.0000 to set fresh ATH Fixed Income Bonds make way for risk revival and brace for US data amidst a raft of global Central Bank speakers. Bunds down to 152.74, Gilts hit 119.25 and 10 year T-note as low as 119-08 before paring some heavy declines UK DMO gets welcome reception for 2015 issuance, but new German Schatz receives cold shoulder even before hawkish comments from ECB's Knot not ruling out a 50 bp July hike if data warrants more than 25 bp China's main bond trading platform is said to have stopped the reporting of bond trades by foreigners following the market downside, according to Bloomberg. Commodities WTI and Brent are firmer in-fitting with broader risk appetite and the aforementioned China COVID improvement; posting gains of circa USD 0.80/bbl. However, upside remains capped amid the ongoing standoff between the EU and Hungary over a Russian import embargo. Iran set June Iranian light crude price to Asia at Oman/Dubai + USD 4.25/bbl, according to a Reuters source   OPEC+ production was 2.6mln below quotas in April, according to a report cited by Reuters; Russian production 1.28mln below the required level in April, sources add. Spot gold is firmer, taking impetus from the USD pressure; though, the yellow metal is yet to move out of earlier ranges. Base metals are bid on risk while Wheat declined amid reports that India is easing some of its export restrictions. Central Banks ECB's Knot says a 25bp hike in July is realistic; says a 50bp rate hike should not be excluded if data in the next few months suggests that inflation is broadening and accumulating. NBH's Virag says they will increase rates further, via Reuters citing slides. NBP's Kotecki says that interest rates will continue to move higher but it is currently difficult to define their target level. US Event Calendar 08:30: April Retail Sales Advance MoM, est. 1.0%, prior 0.5%, revised 0.7% April Retail Sales Ex Auto MoM, est. 0.4%, prior 1.1%, revised 1.4% April Retail Sales Ex Auto and Gas, est. 0.7%, prior 0.2%, revised 0.7% April Retail Sales Control Group, est. 0.7%, prior -0.1%, revised 0.7% 09:15: April Industrial Production MoM, est. 0.5%, prior 0.9% 09:15: April Manufacturing (SIC) Production, est. 0.4%, prior 0.9% 10:00: March Business Inventories, est. 1.9%, prior 1.5% 10:00: May NAHB Housing Market Index, est. 75, prior 77 Fed Speakers 08:00: Fed’s Bullard Discusses Economic Outlook 09:15: Fed’s Harker Discusses Healthcare as Economic Driver 12:30: Fed’s Kashkari Takes Part in a Moderated Townhall Discussion 14:00: Powell Interviewed During Wall Street Journal Live Event 14:30: Fed’s Mester Gives Opening Remarks to Panel on Inflation 18:45: Fed’s Evans Discusses the Economic Outlook DB's Jim Reid concludes the overnight wrap Recession fears have continued to dominate markets over the last 24 hours, but Deutsche Bank Research is still the only bank to actually forecast one in the US. The tone was set for the day after some incredibly weak data out of China that we discussed yesterday, but that was then followed up with disappointing survey data from the US, which arrived ahead of an array of central bank speakers today (including Fed Chair Powell). Although markets in Asia are bouncing a little this morning, the S&P 500 (-0.39%) last night followed up its run of 6 consecutive weekly declines with a further loss. It was another volatile day that saw stocks trade in a 1.5% range, including going into positive territory briefly in the afternoon before slipping into the close. Sector dispersion was pretty wide, with energy shares gaining +2.62% and consumer discretionary stocks falling -2.12%, led by Tesla retreating -5.88%. Tech was the next biggest laggard, with the NASDAQ (-1.20%) and FANG+ index (-1.34%) underperforming the broader universe. That still leaves the S&P 500 index around 2% above its recent closing low on Thursday, but remember that if we get another week in negative territory, it would still be the first time since 2001 that the S&P has posted 7 consecutive weekly declines. After opening the week much lower, the STOXX 600 did recover through that day to post a slight +0.04% gain yesterday, continuing its recent outperformance. The prevailing risk-off mood meant that longer-dated sovereign bond yields also ended the day lower for the most part. Those on 10yr Treasuries were down -3.6bps to close at 2.88%, having already fallen by -20.8bps over the previous week as investors priced in a growing risk of recession over Fed and inflation concerns. The decline was split between breakevens and real yields. To be fair 10yr yields have gained +3.3bps this morning in Asia, thus almost reversing yesterday's losses so far. At the short-end, the amount of tightening priced in over the near-term has subsided somewhat of late, as it seems investors are searching high and low for a Fed put following a poor run of risk asset performance and the prior relentless repricing towards a more aggressive monetary tightening. Indeed if you were to stop the month right now, it would be the first month in 10 that the rate priced in by the December 2022 meeting has actually fallen rather than risen. That’s been echoed further out the curve as well, with investors now barely expecting the Fed Funds rate to get above 3% in 2023 at all, even though inflation has proven much stickier than the consensus expected over recent months. As Chair Powell put it in an interview last week, getting inflation back to target will “include some pain”. Markets are starting to price some of that out though. Over in Europe longer-dated sovereign bond yields also moved slightly lower, including those on 10yr bunds (-0.8bps), OATs (-1.4bps) and BTPs (-0.8bps). That came as we heard from Bank of France Governor Villeroy, who said to expect “a decisive June meeting, and an active summer”, which fits into the broader debate recently whereby markets are increasingly expecting an initial hike as soon as July. This saw the 2yr bund increase +3.0bps to 0.12%. Another point of interest were also his comments on the exchange rate, saying that “A euro that is too weak would go against our price-stability objective”. In line with the broader theme this year, one asset class that wasn’t impacted by the risk-off tone was commodities, and both Brent crude (+2.41%) and WTI (+3.36%) moved back above $114/bbl yesterday. This morning, both are seeing slight losses though (-0.36% and -0.46%, respectively). There were major gains for wheat futures (+5.94%) too, which saw a significant daily rise following India’s move over the weekend to restrict their exports. And that went alongside other rises in agricultural goods yesterday including corn (+3.6%) and sugar (+2.66%), which is an incredibly important story for emerging markets in particular given the much higher share of disposable income that consumers put towards food in those countries. Another asset class that has had a bad time of late is Bitcoin, shedding another -3.58% to $29,909 yesterday. This morning it is climbing back above the $30k threshold. Marion Laboure in my team published a piece yesterday looking at the recent selloff in crypto, adding some much needed context for what this means for broader adoption efforts. See here for more. Overnight in Asia, it has been a good start for the Hang Seng (+2.23%) amid optimism that today’s meeting between China’s corporates and regulators may lead to an easing of draconian measures on tech companies. Hong Kong is also on track to ease covid curbs on May 19th, a theme that also lifted the Shanghai Composite (+0.29%) after the city reported a third day of no new infections in the broader community, a threshold that allows it to roll back some of the restrictions. The sentiment is upbeat elsewhere in Asia too, with the Nikkei (+0.35%) and the KOSPI (+0.80%) also rising. This optimism is shared by S&P 500 futures, up +0.31%. Elsewhere, it’s likely that Brexit will be back in the headlines today as UK Foreign Secretary Liz Truss is expected to make a statement to parliament announcing a new law that would override parts of the Northern Ireland Protocol. For reference, the Protocol is a part of the Brexit deal which the UK and the EU agreed ahead of the UK’s departure, but has been a persistent source of controversy since. Northern Irish unionists view it as undermining their place in the UK because it places an economic border between Northern Ireland and Great Britain, and the DUP (the second-largest party in the Northern Ireland Assembly) are refusing to help form an executive following their recent elections unless action is taken on the Protocol. The EU have continued to warn the UK against any unilateral action, and there’s been fears of an UK-EU trade war if the row gets worse. There wasn’t much in the way of data yesterday, although the Empire State manufacturing survey for May underwhelmed with a reading of -11.6 (vs. 15.0 expected), which was beneath every estimate in Bloomberg’s survey. There was some easing in the prices paid index though, which fell to a 14-month low of 73.7. To the day ahead now, and there’s an array of central bank speakers including Fed Chair Powell, along with the Fed’s Bullard, Harker, Kashkari, Mester and Evans, ECB President Lagarde and BoE Deputy Governor Cunliffe. Data releases include US retail sales, industrial production and capacity utilisation for April, along with the NAHB’s housing market index for May. Elsewhere, there’s also the UK unemployment reading for March. Finally, earnings releases include Walmart and Home Depot. Tyler Durden Tue, 05/17/2022 - 07:43.....»»

Category: blogSource: zerohedgeMay 17th, 2022

Futures Dead Cat Bounced As BTFDers Emerge On Turnaround Tuesday

Futures Dead Cat Bounced As BTFDers Emerge On Turnaround Tuesday The relentless rout that erased $3.4 trillion from the Nasdaq 100 in the past month paused on Turnaround Tuesday as battered tech valuations attracted scattered dip buyers, but nothing like the full-throttled BTFD buying parade observed in months gone by. Futures on the tech-heavy gauge advanced as much 1.4% as bargain hunters returned after the Nasdaq 100 slumped to the lowest since November 2020 on Monday, capping three days of major losses. S&P 500 futures were 0.7% higher to 4,016 after rising as much as 1.2% earlier but also after plunging to as low as 3,961. After rising as high as 3.20% on Monday, 10-year Treasury yields dropped for a second day, sliding below 3.0% and providing further relief to technology shares. The dollar erased a loss and Treasuries edged higher, signaling the return of some haven demand amid nervousness over the path of Federal Reserve policy. European bonds rallied. The Nasdaq’s 14-day relative-strength index (RSI) closed at 33 on Monday, getting closer to the level of 30, which to some analysts indicates a security is oversold and is poised to rise. Another sharp selloff “seems unlikely without an external trigger,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “Nevertheless, as long as the problems persist, we do not expect a big recovery and have used the relief rally to move our equity exposure to neutral.” Indeed, traders have been caught between stubbornly high inflation that erodes asset values and central-bank tightening that threatens to slow economic growth, or even push some nations into recession. Recent U.S. data suggesting the Federal Reserve will stay on an aggressive rate-hike path have sparked the latest bout of risk-off trades. Fresh outbreaks of Covid in China, and the nation’s stringent measures to control them, have worsened sentiment. “For now, investors need to be prepared for continued volatility,” Solita Marcelli, Americas chief investment officer at UBS Global Wealth Management, wrote in a note. She added “sentiment is bearish” but not capitulating. In premarket trading, electric vehicle makers are up, with Tesla, Rivian and Lucid set to rebound after losing $188 billion in three days. AMC Entertainment is 6.4% higher after reporting better-than-expected quarterly results as hits like “Spider-Man: No Way Home” lured people back to movie theaters. Bank stocks edge higher in premarket trading amid a broader rebound for equity markets after Monday’s rout. S&P 500 futures are up about 0.8% this morning, while the U.S. 10-year yield retreats for a second day to sit at roughly 3%. In corporate news, BlackRock said it won’t support efforts by shareholders who try to micromanage companies on climate change. Meanwhile, Bitcoin rebounded back above $30,000 after briefly sinking below the closely watched level. Here are some of the biggest U.S. movers today: Most large cap U.S. technology and internet stocks rose in premarket trading, on course to recoup some of the heavy losses they suffered in a steep selloff over the last three sessions. Apple (AAPL US) is up 1.2%, Microsoft (MSFT US) +1.2% and Meta (FB US) +2.8%. AMC Entertainment (AMC US) is up 3.8% in premarket trading after reporting better-than-expected quarterly results as hits like “Spider-Man: No Way Home” lured people back to movie theaters. Electric vehicle makers Tesla (TSLA US), Rivian (RIVN US) and Lucid (LCID US) are rebounding after losing $188 billion in three days of heavy selling in technology and growth stocks. Shockwave Medical (SWAV US) may move after it raised its revenue guidance for the full year, with analysts saying that the company’s performance was boosted by its coronary business. Shares rose 11% in extended trading on Monday. Upstart Holdings (UPST US) shares plunge 48% in premarket trading after the cloud-based artificial intelligence lending platform cut full- year revenue guidance on macro uncertainties. Piper Sandler cut the stock to neutral. Novavax (NVAX US) is down 21% premarket, with analysts saying that the biotech firm’s revenue for the first quarter missed expectations. Plug Power (PLUG US) shares are 5.6% lower premarket after the fuel cell company reported net revenue for the first quarter that missed the average analyst estimate, with KeyBanc noting pressure on margins and higher costs. Video game stocks may move after Sony’s earnings fell short of estimates amid supply constraints and component shortages. Watch shares in Activision Blizzard (ATVI US), Electronic Arts (EA US) and Take-Two Interactive (TTWO US). U.S. stocks and particularly the Nasdaq 100 have been crushed this year (amid a tireless tirade from JPM's Marko Kolanovic to buy each and every dip) as investors fret over recession risks from the Federal Reserve embarking on aggressive monetary tightening amid surging inflation. Higher interest rates mean a bigger discount for the present value of future profits, hurting growth and in particular tech stocks with the highest valuations.  European stocks trade well, with most cash indexes gaining over 1% to recover roughly half of Monday’s losses when the index slumped to its lowest level in two months. Euro Stoxx 50 rose as much as 1.75%, FTSE MIB outperforms slightly, FTSE 100 lags but still adds 1%. Construction, banks and autos lead broad-based Stoxx 600 sectoral gains. The Stoxx 600 energy sub-index edges lower, being one of the worst-performing sectors in a rising broader market for European stocks, as oil keeps falling. Shell declines as much as 1.5%, TotalEnergies SE -1.6%, Equinor -4.5%. Here are some of the biggest European movers today: Luxury stocks such as Kering (+0.5%) and Watches of Switzerland (+4.2%) rebounded after the declines of the previous sessions, with investors hopeful that the Covid-19 situation in the key market of China may be slightly improving. Hermes rises as much as +1.6%, LVMH +2.4% Airbus gains as much as 3.7% in Paris trading after being raised to buy from hold at Societe Generale, with the broker highlighting the planned production ramp-up of the “highly profitable” A320 family. Swedish Match rises as much as 28% after Philip Morris International said it’s in talks to buy the company. While a deal would make strategic sense, a counter-bid can’t be ruled out, analysts said. Centrica climbs as much as 6.5%, the most since Feb. 25, after the company guided adjusted earnings per share to be at the top end of the consensus range. Euroapi soars as much as 9.5% after the Sanofi spinoff is initiated with a buy recommendation and EU20 price target at Deutsche Bank, which sees “good value” and an attractive business. E-commerce stocks rise in Europe, with many outperforming the benchmark Stoxx 600 Index, buoyed by dip buyers returning to growth and technology shares that have been battered this year. Zalando up as much as 4.9%, Home24 +12%, Moonpig +3.6% Earlier in the session, Asian stocks extended their decline to a seventh day as the specter of rapid credit tightening in the U.S. and protracted lockdowns in Chinese cities prompted some investors around the region to reduce holdings of riskier assets.  The MSCI Asia Pacific Index fell as much as 2.1% to its lowest level since July 2020, weighed down tech shares after a three-day selloff in the Nasdaq 100. Hong Kong’s Hang Seng Index ended 1.8% lower as the market reopened after a holiday, though benchmarks in mainland China rebounded from early-trading lows on hopes for easier monetary conditions. MSCI Asia Pacific Index down 0.7% Japan’s Topix index down 0.9%; Nikkei 225 down 0.6% Hong Kong’s Hang Seng Index down 1.8%; Hang Seng China Enterprises down 2.2%; Shanghai Composite up 1.1%; CSI 300 up 1.1% Taiwan’s Taiex index up 0.1% South Korea’s Kospi index down 0.5%; Kospi 200 down 0.5% Australia’s S&P/ASX 200 down 1%; New Zealand’s S&P/NZX 50 down 1.3% India’s S&P BSE Sensex Index down 0.2%; NSE Nifty 50 down 0.4% “There’s nowhere to escape so it’s pretty tough,” said Yuya Fukue, a trader at Rheos Capital Works. “Economic data appears to be deteriorating of late, though that has seemed to have gone little noticed while the markets were so focused on the Fed’s policy. It feels as if the game is changing.” Among Chinese tech giants, Alibaba tumbled 4.8% in Hong Kong, while Tencent dropped 2.3%. Regional declines were broad, with investors dumping even this year’s star energy shares as oil prices eased.  Singapore’s Straits Times Index and Australia’s S&P/ASX 200 both dropped about 1%. The Philippine benchmark ended 0.6% lower, recovering after skidding more than 3%, after Ferdinand Marcos Jr. won a landslide victory in the country’s presidential election. Mainland Chinese shares closed higher after the People’s Bank of China repeated a pledge to proactively address mounting economic pressure and highlighted a drop in deposit rates, which could spur banks to lower the cost of borrowing for the first time in months. “The market was a bit oversold. In addition, PBOC is also mentioning a drop in deposit rates, raising expectations of more room for banks to increase lending,” said Aw Hsi Lien, a strategist at Tokai Tokyo Research. India’s benchmark equity index slipped to a two-month low amid a weaker trend in Asia as surging oil prices and inflationary pressures weighed on investor sentiment. The S&P BSE Sensex fell 0.2% to 54,364.85 in Mumbai, after swinging between gains and losses several times during the session. The NSE Nifty 50 Index slipped 0.4% to 16,240.05. This is the third consecutive session of declines for the key indexes.  Sixteen of the 19 sector sub-indexes compiled by BSE Ltd. dropped, led by metal stocks. Reliance Industries Ltd. slipped 1.7% to a seven-week low and was the biggest drag on the Sensex, which saw 18 out of its 30 member-stocks trading lower.   In earnings, among the 27 Nifty 50 companies that have announced results so far, 10 have missed estimates while 17 either exceeded or met forecasts.  In FX, the Bloomberg Dollar Spot Index fell 0.1% after climbing to a two-year high on Monday, and the greenback was steady or weaker against all of its Group-of-10 peers. The euro consolidated and the region’s yields fell as Italian bonds led an advance. The pound was steady against both the dollar and euro while gilts outperformed peers. Domestic focus is on the Queen’s speech laying out the government’s agenda for the next parliamentary session and Brexit risks after reports the U.K. is preparing to scrap parts of the Northern Ireland protocol. U.K. retail sales are falling on an annual basis for the first time since the start of last year as the cost of living crisis crushes consumer confidence and puts the brakes on spending. Scandinavian currencies led gains among G-10 pairs after both currencies fell to the weakest level in around two years versus the dollar on Monday. The Australian and New Zealand dollars also bounced off two-year lows as stock indexes trimmed an intraday decline. Aussie’s gains were tempered as iron ore fell for a third day to bring the three-day slide to about 15%. The yen edged lower as Treasury yields recovered from a sharp overnight drop. Bonds pared earlier gain after the 10-year debt sale. Bank of Japan Executive Director Shinichi Uchida says that widening the central bank’s yield target band would be equivalent to a rate hike and wouldn’t be favorable for Japan’s economy In rates, Treasuries rose in early U.S. trading with belly leading gains and the curve flattening modestly after Monday’s bull-steepening. Yields are richer by ~4bp across in belly of the curve, steepening 5s30s spread by ~3bp as long-end yields lag; 10-year trading just around 3%, richer by ~3bp on the day, trailing gilts by ~7bp in the sector. Core European rates outperform led by gilts while stocks and U.S. futures recover a portion of Monday’s steep losses. Bunds bull-flatten, while peripheral spreads tightened to Germany with short-dated BTPs outperforming. Treasury auction cycle begins with 3-year note sale, and several Fed speakers are slated. U.S. new-issue auction cycle consists of $45b 3-year note, followed by 10- and 30-year sales Wednesday and Thursday. WI 3-year yield ~2.800% is higher than auction stops since 2018 and ~6bp cheaper than last month’s, which stopped through by 0.1bp. Three-month dollar Libor +0.13bp at 1.39986% In commodities, crude futures are choppy, WTI dips back into the red having stalled near $104. Spot gold rises ~$9 near $1,863/oz. Much of the base metals complex trades poorly. LME copper outperforms, holding in the green but off best levels after a test of $9,400/MT. Bitcoin reclaimed the $31K handle, but is yet to make a concerted move higher. Looking ahead, we get the April NFIB Small Business Optimism print (93.2, Exp. 92.9), Chinese M2, Speeches from Fed's Williams, Waller, Bostic, Barkin, Kashkari, Mester, ECB's de Guindos & BoE's Saunders, Supply from the US. Earnings from Norwegian Cruise Line & Warner Music. Biden speaks on soaring inflation at 11am EDT. Biden will also meet with Italian Prime Minister Draghi at the White House, and the UK state opening of Parliament is taking place, where the government outlines its legislative programme for the year ahead. Of course, the big event is tomorrow morning when the US CPI print comes. Market Snapshot S&P 500 futures up 1.1% to 4,031.75 STOXX Europe 600 up 1.2% to 422.32 MXAP down 0.8% to 159.98 MXAPJ down 0.8% to 523.71 Nikkei down 0.6% to 26,167.10 Topix down 0.9% to 1,862.38 Hang Seng Index down 1.8% to 19,633.69 Shanghai Composite up 1.1% to 3,035.84 Sensex up 0.4% to 54,674.30 Australia S&P/ASX 200 down 1.0% to 7,051.16 Kospi down 0.5% to 2,596.56 German 10Y yield little changed at 1.07% Euro little changed at $1.0564 Brent Futures up 0.8% to $106.83/bbl Gold spot up 0.5% to $1,862.69 U.S. Dollar Index little changed at 103.65 Top Overnight News from Bloomberg The EU is considering the issuance of joint debt to finance Ukraine’s long-term reconstruction, which may end up costing hundreds of billions of euros, according to an EU official familiar with the plan China’s provinces are set to sell a historic amount of new special bonds by the end of June as part of an infrastructure investment push intended to rescue an economy stymied by Covid outbreaks and lockdowns Hungarian Prime Minister Viktor Orban’s talks with the head of the EU about proposed sanctions on Russian oil imports made progress, but failed to reach a breakthrough, according to both sides Investor confidence in Germany’s pandemic rebound improved, but remained deeply negative as the war in Ukraine darkens the outlook for Europe’s largest economy. The ZEW institute’s gauge of expectations rose to -34.3 in May from -41 the previous month, defying expectations for a third straight deterioration. An index of current conditions worsened Saudi Arabia’s oil minister warned that spare capacity is decreasing in all sectors of the energy market, as prices of products from crude to diesel and natural gas trade at or near multi-year highs in the wake of Russia’s invasion of Ukraine A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly negative after the resumed sell-off on Wall St where the S&P 500 slipped beneath the 4,000 level for the first time since March 2021. ASX 200 briefly gave up the 7,000 status with notable underperformance in the energy and mining-related sectors. Nikkei 225 slumped from the open although moved off its lows as participants digested stronger than expected Household Spending data and after BoJ's Uchida dismissed the prospects of a tweak to the BoJ’s 50bps yield target band. Hang Seng and Shanghai Comp both initially joined in on the selling with heavy losses in the tech sector contributing to the underperformance in Hong Kong on return from the extended weekend, although the downside in the mainland was later reversed after the recent policy support efforts by China’s MIIT and CBIRC. Top Asian News China Tech Stocks Slide as Growth Woes, Global Rout Grip Traders Investor’s Guide to the 2022 Philippine Presidential Election ArcelorMittal Evaluating Bidding for ACC, Ambuja: ET Now Philippine Stocks Fall as Traders Weigh Marcos Win, Global Rout European equities feel some reprieve following the prior session’s selloff; Euro Stoxx 50 +1.2%. Relatively broad-based gains are seen across the majors with some mild underperformance in the FTSE 100. Sectors show some of the more defensive sectors at the bottom of the bunch – alongside energy – whilst Construction, Autos, Banks, and Industrial Goods reside as the current winners. US equity futures are firmer across the board, ES +1.0%, with the NQ narrowly outpacing peers after underperforming yesterday. Top European News Russian Gas Flows to Europe Remain Steady on Key Links Highest Inflation in Three Decades Boosts Czech Rate Hike Case BPER Banca Soars After Earnings Beat, With Fees as Highlight Russia’s Economy Facing Worst Contraction Since 1994 FX The Dollar retains a firm underlying bid ahead of another slew of Fed speakers; risk sentiment remains fluid and fragile. The Swiss Franc has hit a fresh 2022 peak vs the Greenback; USD/JPY is consolidating around 130.00. EUR/USD was unfazed by mixed German ZEW data but later lost ground under 1.0550. Cable rotates either side of 1.2350 awaiting Brexit/N. Ireland news, further political fallout and more comments from BoE hawk Saunders. Crude and commodity FX have gleaned a degree of traction from partial recoveries or stabilisation in underlying prices. CBRT and regulator have asked banks to undertake FX transactions with corporate clients between 10:00-16:00, when the market is liquid, via Reuters citing bankers. Fixed Income Core benchmarks bounce further after a brief breather early on, with little in way of fresh fundamentals behind the upside. Initial highs were faded pre-UK/German issuance; once this cleared, Bunds and Gilts lifted to 152.50+ and 119.00+ peaks. Stateside, USTs are bolstered but far from best, with the curve re-flattening into today's 3yr sale and yet more Fed speak. Commodities Crude futures have come under renewed pressure in recent trade after seeing some gains in the European morning.   The initial downside coincided with the mixed Germany ZEW reports alongside the downbeat commentary from Hungary regarding an imminent oil ban; albeit, benchmarks are off overnight USD 100.44/bbl and USD 103.19/bbl respective lows. Saudi Energy Minister says it is "mind-boggling" why focus is on high oil prices and not on gasoline, diesel or others. World needs to wake up to an existing reality that it is running out of energy capacity at all levels, via Reuters. UAE Energy Minister says oil prices could double or triple in "chaotic" market. US officials reportedly asked Brazil's Petrobras in March to boost output, but it the oil Co. said it could not, according to Reuters sources. China's Shenghong Petrochemical has started a trial operation at its (320k BPD) greenfield refining complex in east China, according to Reuters sources. Germany is said to be shifting away from plans for a strategic national coal reserve, according sources cited by Reuters. Spot gold holds onto mild gains as DXY pulled back from the fresh YTD highs set yesterday. LME futures post mild gains following yesterday’s downside with the market still looking somewhat fragile. DB's Jim Reid concludes the overnight wrap It's school photo day today. After discussing it with my kids last night I said to them that I'd dig out my old school photos so they could see me at school. Without hesitation and with a straight face Maisie said, "Are they in black and white Daddy?". I was half amused and half depressed. Markets are pretty black at the moment with little white on show. Actually the only bright colour is a sea of red. Indeed after a rocky few weeks in markets, there’s been a further rout over the last 24 hours as investor jitters about the global growth outlook have continued to escalate. There has been some respite in Asia but markets remain very shaky. There wasn’t really a single catalyst to yesterday’s steep declines, but ultimately there’s been a growing scepticism in markets as to whether the Fed and other central banks will actually be able to achieve a soft landing without a recession as they seek to bring down inflation. One interesting development though was that rates rallied as the equity slump intensified, rather than both selling off as has been the norm in recent weeks. Although the day lacked a single catalyst, the bond market moves seem to turn around the same time as Atlanta Fed President Bostic spoke. He picked up where Chair Powell left things after last week’s press conference. Bostic signaled that +50bp hikes were part of his core view, placing low odds on anything larger, stating +50bp hikes were “already a pretty aggressive move.” Like other Fed speakers, he signaled a desire to get policy to neutral and then assess. While he isn’t a voter this year, his voice does carry weight at the hawkish end of the committee so the price action likely reflected the market believing that a consensus continues to build for 50bps, and not 75bps, even among the hawks. Sovereign bonds were actually seeing a strong sell-off before his comments but rallied fairly fiercely from around the same time. 10yr Treasury yields hit an intraday high of 3.20% during the European morning (+7.5bps on the day) but ended up closing -9.3bps lower at 3.03%, showing that wide intraday ranges and volatility continue to grip the market. With the Fed continuing to put a perceived ceiling on the near-term pace of hikes, 2yr yields rallied -13.7bps on the day with the curve steepening another +5.3bps. The amount of Fed hikes priced in by the December meeting down by -15.5bps. As I type, 10yr US yields are fairly flat in Asia. The move echoed in Europe, where 10yr bunds rallied -3.5bps to 1.09%. The broader risk-off move meant that there was a further widening in spreads yesterday, with the gap between Italian 10yr BTPs over bunds widening by +4.9bps to 205bps, which is the widest they’ve been since May 2020. And that widening was seen on the credit side as well, where iTraxx Main moved above 100bps for the first time since April 2020 in trading, before falling back somewhat to settle at 98bps (+1.4bps). Against this backdrop, the S&P 500 fell by a sizeable -3.20% that takes the index to its lowest level in over a year. That comes on the backs of 5 consecutive weekly losses, which is already the longest run in over a decade, and given the performance yesterday it would take a strong comeback over the remaining four days this week to avoid that run extending to 6 weeks. See my Chart of the Day yesterday (link here) for more on how rare it has been to see an 11 year run without a 5 successive weekly decline. Energy was the worst performing US sector, falling an astonishing -8.30%, in its worst one-day performance since June 2020, after the fall in oil (more below). The sector is still by far the best performing S&P sector YTD, up +36.79%, with every other sector in the red. Despite the rate rally, it was a bad day for mega-cap and other growth tech stocks. Indeed, the NASDAQ fell a further -4.29% to its lowest level since November 2020, whilst the FANG+ index of 10 megacap tech stocks fell an even larger -5.48%. For reference, that now takes the FANG+ index’s decline since its all-time high in November to a massive -38.22%. Even a high quality component like Amazon is now down -35.75% since March 29th and is pretty much back to pre-covid levels. Over the other side of the pond, Europe saw some sizeable declines as well, with the STOXX 600 down -2.90% to leave the index not far away from its recent lows in early March. With the Fed set to continue their hiking cycle, just as the ECB are still pondering on when to even start hikes and China’s growth prospects are fading, the US dollar has continued to benefit. Yesterday, the Japanese Yen (+0.21% vs USD) was the top-performing G10 currency, in line with its traditional status as a safe haven, but Bitcoin continued to lose ground, falling to its lowest level since July last year, after falling to $31,562. It briefly fell below 30k this morning. It's been interesting that Bitcoin is not getting much mention with all the inflationary issues seen in recent months. It seems to be suffering from a higher dollar, higher real yields and a tech related sell-off. Markets continue to fall in Asia but US futures are up. Hang Seng (-3.06%) is the largest underperformer, but is paring its losses after falling more than -4% as the market returned after a holiday with the Chinese listed tech firms among the worst hit. Elsewhere, the Nikkei (-0.93%) and Kospi (-0.95%) are down. Meanwhile, mainland Chinese stocks are trading in positive territory with the Shanghai Composite (+0.17%) and CSI (+0.15%) somewhat recovering from opening losses. Looking ahead, S&P 500 (+0.56%), NASDAQ 100 (+0.92%) and DAX (+0.25%) futures are moving higher. Early morning data showed that Japan’s household spending declined -2.3% y/y in March, its first drop in three months albeit the fall was less than -3.3% estimated by Bloomberg and followed +1.1% growth in February. Back to inflation and one potentially problematic indicator came from the New York Fed’s latest consumer survey, which found that median inflation expectations for 3 years ahead rose to +3.9%, which is the highest since December, and up from +3.5% back in January. It’s still not as high as the +4.2% readings back in September and October, but will obviously be unwelcome news to the Fed whose path to a soft landing is in part reliant on inflation expectations remaining well anchored around target. Turning to the situation in Ukraine, a key risk event yesterday had been Russia’s Victory Day parade, where it was speculated that President Putin would move towards a general mobilisation. However, in reality it finished with surprisingly little news, and whilst not showing a path towards de-escalation, didn’t move to escalate things further. Separately, it was reported by Bloomberg that the EU would soften its proposed sanctions package on Russian oil exports, with an article saying that they would drop the proposal to ban EU-owned vessels transporting Russian oil to third countries. The sanctions package has already come under criticism from some member states, and the article said that Hungary and Slovakia had been offered a longer time period lasting until end-2024 to comply with the proposals to ban Russian oil imports, with Hungary in particular saying more talks were needed to support oil-related sanctions. So with no further escalation and a softening in sanctions, oil prices fell back significantly amidst weak risk appetite more generally. Brent crude was down -5.74%, whilst WTI fell -6.09%, which follows 2 consecutive weekly gains for both. This morning oil prices are again lower with Brent and WTI futures -1.74% and -1.68% lower respectively. To the day ahead now, and central bank speakers include the Fed’s Williams, Barkin, Waller, Kashkari and Mester, along with ECB Vice President de Guindos and Bundesbank President Nagel. Data releases include Italy’s industrial production for March and Germany’s ZEW survey for May. Finally on the political side, President Biden will meet with Italian Prime Minister Draghi at the White House, and the UK state opening of Parliament is taking place, where the government outlines its legislative programme for the year ahead. Tyler Durden Tue, 05/10/2022 - 07:57.....»»

Category: smallbizSource: nytMay 10th, 2022

Top Analyst Reports for Oracle, Linde & Caterpillar

Today's Research Daily features new research reports on 16 major stocks, including Oracle Corporation (ORCL), Linde plc (LIN), and Caterpillar Inc. (CAT). Wednesday, April 20, 2022 The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Oracle Corporation (ORCL), Linde plc (LIN), and Caterpillar Inc. (CAT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today ’s research reports here >>>Shares of Oracle have outperformed the Zacks Computer - Software industry over the past year (+3.2% vs. +2.7%). The Zacks analyst believes that the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure services and autonomous Database offerings. Solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM), bodes well. Solid demand for the Oracle Dedicated Region Cloud@Customer is anticipated to drive the top line. Partnerships with Accenture and Microsoft is helping Oracle win new clientele. The company’s share buybacks and dividend policy are noteworthy. However, higher spending on product enhancements, especially toward the cloud platform, amid increasing competition in the cloud domain is likely to limit margin expansion.(You can read the full research report on Oracle here >>>)Linde's shares have gained +14.4% over the past year against the Zacks Oil and Gas - Field Services industry’s gain of +34.2%. The company’s primary product is industrial gases including oxygen, which is used as life support in hospitals. Linde process gas like hydrogen is being utilized for clean fuels, while its high-purity and specialty gases are employed to manufacture electronics. The Zacks analyst believes that with improving industrial productions worldwide, Linde is gaining on the back of recovering industrial gas demand. The company has long-term contracts with on-site customers backed by minimum purchase requirements, thereby securing stable cashflows. However, the cost of sales continues to increase, hurting the firm’s bottom line.(You can read the full research report on Linde here >>>)Shares of Caterpillar have outperformed the Zacks Manufacturing - Construction and Mining over the past year (+4.7% vs. +2.4%). Caterpillar’s backlog was a solid $23 billion at the end of 2021. This will drive its top line in the upcoming quarters. Strong demand in its end markets and savings from its restructuring actions might negate the impact of high material and labor costs and supply chain headwinds that is currently being faced by the company. The Zacks analyst believes that the construction industries segment is expected to continue to benefit from the strength in residential construction and non-residential construction in the United States, as well as rising demand in other parts of the world. Meanwhile, demand from mining backed by higher commodity prices will aid the Resource Industries segment. A robust liquidity position and investments in expanding services and digital initiatives will drive growth.(You can read the full research report on Caterpillar here >>>)Other noteworthy reports we are featuring today include Salesforce, Inc. (CRM), Sony Group Corporation (SONY), and Vale S.A. (VALE).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadOracle (ORCL) Rides on Cloud Suite Adoption & PartnershipsLinde (LIN) to Gain on Contracts With On-Site CustomersStrong Demand to Aid Caterpillar (CAT) Amid Margin PressuresFeatured ReportsDigital Transformation and Acquisitions Aid Salesforce (CRM)Per the Zacks analyst, Salesforce is benefiting from ongoing digital transformations and adoption of its cloud services. Moreover, strategic acquisitions like Slack and Tableau are positive.nBrand Focus to Aid Sony (SONY) Amid G&NS Segment WeaknessWhile Sony's focus on premium segment of branded products is helping it gain momentum, declining sales in the Game & Network Services (G&NS) segment is likely to dent margins, per the Zacks analyst.Boston Scientific (BSX) MedSurg Arm Gains amid Stiff RivalryThe Zacks analyst is impressed with Boston Scientific registering faster recovery in recent times within MedSurg business than rest of its business arms. Yet, stiff rivalry remains a concern.Synchrony's (SYF) Strategic Buyouts and Collaborations AidPer the Zacks analyst, Synchrony's strategic buyouts will boost its digital capabilities & diversify the business, leading to significant growth. Yet, a slowdown in the payment rate remains a concern.Darden (DRI) Banks on Digital Initiatives, High Costs AilPer the Zacks analyst, Darden is likely to benefit from technological enhancements with reference to online ordering and To Go business. However, rise in labor and commodity costs are headwinds. Investments Aid AES Corp (AES) Amid the Rising InflationPer the Zacks Analyst, increased investments in renewables bolsters AES Corporation earnings growth prospects. Yet, the rising inflation resulting in increased expenses remains a bottleneck.Ionis' (IONS) Dependence on Collaboration Revenues A WoeIonis' RNA antisense technology has allowed it to form partnerships with leading drugmakers for development/marketing of its drugs. However, the recent pipeline setbacks concern the Zacks Analyst.New UpgradesSM Energy (SM) Banks On High-Grade Austin Chalk InventoryThe Zacks analyst is impressed by SM Energy's high-quality inventory of the Austin Chalk play, leading to encouraging results due to additional wells drilled in the region.Vale (VALE) Bets on Rising Iron Ore Prices & Cost ControlPer the Zacks analyst, high iron ore prices and demand, lower debt levels and focus on improving productivity and lowering costs will drive growth for Vale.Pilgrim's Pride (PPC) Gains From Robust U.S. OperationsPer the Zacks analyst, Pilgrim's Pride is gaining from higher sales in the U.S. Operations for a while. During fourth-quarter 2021 sales in the region surged 27.9% year over year.New DowngradesHigh Fuel Costs Dent Allegiant Travel's (ALGT) ProspectsThe Zacks analyst is concerned with the escalating fuel costs, which are limiting the company's bottom-line growth. Increase in labor expenses is also worrying.Envestnet (ENV) Grapples With Expenses and High DebtThe Zacks Analyst believes that rising operating expenses are likely to weigh on Envestnet's bottom line. Meanwhile, a debt-laden balance sheet remains a concern.Supply Chain Woes to Hurt Bed Bath & Beyond's (BBBY) GrowthPer the Zacks analyst, Bed Bath & Beyond has been witnessing supply-chain pressures, cost inflation and rising freight costs. The lack of available inventory is likely to persist in early fiscal 2022. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Salesforce Inc. (CRM): Free Stock Analysis Report Caterpillar Inc. (CAT): Free Stock Analysis Report VALE S.A. (VALE): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Linde plc (LIN): Free Stock Analysis Report Sony Corporation (SONY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 20th, 2022

Will Industrial Gain From Improving US Output in March?

The latest update on the U.S. industrial output is encouraging amid an improving labor market and easing pandemic conditions. March's encouraging U.S. industrial output data can largely be attributed to the improving labor market and easing pandemic conditions. Per the Fed’s recently-released data, total industrial production rose 0.9% in March. A 0.9% rise in the manufacturing output also looked encouraging. There was a 0.4% rise in utility production. Moreover, mining production witnessed a 1.7% uptick, mainly due to strength in the oil and gas sector.Considering the latest data release, investors can track ETFs like The Industrial Select Sector SPDR Fund (XLI), Vanguard Industrials ETF (VIS), Fidelity MSCI Industrials Index ETF (FIDU) and iShares U.S. Industrials ETF (IYJ), which might gain from an improving industrial output.Total industrial production increased 5.5% from the year-ago figure in March. According to the Fed’s report, the durable and the nondurable manufacturing indexes rose 1.3% and 0.4%, respectively, in March. The other manufacturing (publishing and logging) index was also up 0.2% in the month.Capacity utilization for the industrial sector expanded to 78.3% in March. The manufacturing capacity utilization for the industry, which is the measure for studying how efficiently firms are utilizing their resources, increased 0.6% in March to 78.7%, per the Fed’s report.Present U.S. Economic ScenarioThe world’s largest economy is grappling with rising inflation levels. Per the latest Labor Department report, the Consumer Price Index (CPI) jumped 8.5% year over year in March, reaching the highest level since December 1981 (according to a CNBC report). The reading also surpassed the already high Dow Jones estimate of 8.4%. The high inflation level can set the tone for another interest rate hike soon.The core inflation index, which excludes volatile components such as food and energy prices, rose 6.5% year over year, marking the hottest reading since August 1982 (per a CNBC article).The recently released FOMC minutes of the March meeting highlighted the central bank’s plans to control the inflation levels by larger interest rate hikes. It also outlined the method and magnitude of reducing the balance sheet holding around $9 trillion in assets. Notably, the Federal Reserve officials have decided to shrink their balance sheet by approximately $95 billion a month. More precisely, the Fed plans to reduce $60 billion in Treasurys and $35 billion in mortgage-backed securities, phasing in over three months, starting May (per a CNBC article).Meanwhile, the strong labor market and recovering U.S. economy have boosted the positive market sentiments as consumer confidence also improved in March after declining for the first two months of 2022. The Conference Board's measure of consumer confidence index stands at 107.2 in March 2022 versus 105.7 in February. Moreover, March’s reading nominally surpassed the consensus estimate of 107, per a Bloomberg survey of economists. However, the metric continues to be below the pre-pandemic level of 132.6 achieved in February 2020.The latest encouraging preliminary consumer sentiment readings for early April can also be largely attributed to the improving job market. The University of Michigan’s preliminary consumer sentiment rose to 65.7 in early April from a final reading of 59.4 last month, improving 10.6% over the prior month. The metric surpassed the market forecast of the index, coming in at 59.Industrial ETFs in FocusIn the current scenario, we believe it is prudent to discuss ETFs that have relatively high exposure to industrial companies:The Industrial Select Sector SPDR Fund XLI           The Industrial Select Sector SPDR Fund seeks to provide investment results that, before expenses, match the performance of the Industrial Select Sector Index. The Industrial Select Sector SPDR Fund has AUM of $15.06 billion and an expense ratio of 0.10% (read: 5 ETF Areas Shining Bright as US Economy Looks Strong).Vanguard Industrials ETF VIS                   Vanguard Industrials ETF offers exposure to the industrial sector and follows the MSCI US Investable Market Industrials 25/50 Index. Vanguard Industrials ETF manages AUM of $4.40 billion and an expense ratio of 0.10%.Fidelity MSCI Industrials Index ETF FIDUThe Fidelity MSCI Industrials Index ETF seeks to provide investment returns that match, before fees and expenses, the performance of the MSCI USA IMI Industrials Index. Fidelity MSCI Industrials Index ETF has AUM of $799.2 million and an expense ratio of 0.08%.iShares U.S. Industrials ETF IYJThe iShares U.S. Industrials ETF seeks to track the investment results of the Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index. iShares U.S. Industrials ETF has AUM of $1.33 billion and an expense ratio of 0.41%, as stated in the prospectus. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it 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 Vanguard Industrials ETF (VIS): ETF Research Reports Industrial Select Sector SPDR ETF (XLI): ETF Research Reports iShares U.S. Industrials ETF (IYJ): ETF Research Reports Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 19th, 2022

3 Silver Mining Stocks to Watch in a Challenging Industry

The Zacks Mining Silver industry participants like Buenaventura Mining Company (BVN), MAG Silver (MAG) and Fortuna Silver Mines (FSM) are poised well to benefit from high demand for the metal and their growth projects. The Zacks Mining - Silver industry has been seeing rising silver prices driven by mounting geopolitical tensions and inflationary pressures. This momentum might be cut short as these tensions subside and interest rates are hiked. However, strong demand for the metal from all key sectors will continue to support the industry.We suggest keeping an eye on companies like Buenaventura Mining Company BVN, MAG Silver MAG and Fortuna Silver Mines FSM, which are poised to benefit from their efforts to enhance efficiency and cost management, and solid growth projects.About the IndustryThe Zacks Mining - Silver industry comprises companies that are engaged in the exploration, development, and production of silver. These include big and small players operating mines of widely varying types and scales. Silver-bearing ores are mined by open-pit or underground methods and then are crushed and ground. The miners continually search for opportunities to expand their reserves and resources through targeted near-mine exploration and business development. They strive to upgrade and improve the quality of their existing assets, internally and through acquisitions. Only 20% of silver comes from mining activities, where silver is the primary source of revenue. The balance comes from projects where silver is a by-product of mining other metals, such as copper, lead and zinc. Thus, several companies in the silver mining industry are engaged in mining other metals as well.What's Shaping the Future of Mining-Silver IndustrySilver Prices Might Lose Steam:  Silver's unrivaled characteristics make it an indispensable component for several industrial products. With industrial applications accounting for roughly 60% of the global silver consumption, expansion in the manufacturing sector has supported prices so far this year. The Russia-Ukraine conflict and inflationary pressures fueled the safe-haven demand for the precious metal. Silver prices are currently at around $26 per ounce, reflecting a 9.7% gain so far this year. While macroeconomic and geopolitical conditions have supported silver prices in the first half of the year, it would eventually come under pressure due to interest rate hikes and the easing of geopolitical tensions. The Silver Institute thus projects an annual average silver price of around $24.80 this year, 1% lower than 2021's average price.Cost Control & Innovation to Increase Efficiency: The industry players are currently facing escalating production costs, including electricity, wages, water and materials. Mining companies are major consumers of energy, with around 50% of their production costs closely linked to energy prices. A shortage of skilled workforce has led to a spike in wages. With no control over silver prices, the industry has to focus on improving sales volumes while being cost-effective. The companies are investing heavily in R&D and resorting to technological innovations targeted at nearly every level of operation to increase efficiency, sustain growth and keep costs low.Demand to Remain Strong: Silver demand in all key sectors is expected to remain strong this year. The Silver Institute projects global silver demand to hit a new record of 1.112 billion ounces in 2022, registering an 8% year-on-year increase. Industrial demand is expected to establish a new record in 2022. Ongoing improvements in the global economy will support demand for the metal for industrial applications and mitigate near-term headwinds stemming from supply chain bottlenecks and the persisting COVID-19-related challenges. Jewelry demand is expected to rise 11% in 2022, backed by India, courtesy of improving consumer sentiment and growing interest in silver jewelry. India is expected to be the main contributor to the 21% surge expected in silverware fabrication this year. The outlook for silver demand in automotive and 5G related applications and the photovoltaic (PV) industry remains robust this year. Silver physical investment is likely to be up in double-digit in 2022 aided by the ongoing macroeconomic uncertainties and inflationary pressure.Zacks Industry Rank Indicates Dull ProspectsThe group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates gloomy prospects in the near term. The Zacks Mining - Silver industry, which is a 12-stock group within the broader Zacks Basic Materials Sector, currently carries a Zacks Industry Rank #226, which places it at the bottom 11% of 256 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group's earnings growth potential. So far this year, the industry's earnings estimate for the current year has plunged 38%.Despite the bleak near-term prospects, we will present a few Mining-Silver stocks that one can retain, given their growth prospects. But it's worth taking a look at the industry's shareholder returns and current valuation first. Industry Versus Broader MarketThe Mining-Silver Industry has underperformed the S&P 500 and its sector over the past year. The stocks in this industry have collectively declined 10.4% in the past year against the Zacks S&P 500's growth of 6.2%. The Zacks Basic Material Sector has rallied 10.2% over the same time frame.One-Year Price Performance Industry's Current ValuationOn the basis of forward 12-month EV/EBITDA ratio, which is a commonly used multiple for valuing silver-mining companies, we see that the industry is currently trading at 10.74X compared with the S&P 500's 14.10X and the Basic Material sector's forward 12-month EV/EBITDA of 5.30X. This is shown in the charts below.Enterprise Value/EBITDA (EV/EBITDA) F12M Ratio Enterprise Value/EBITDA (EV/EBITDA) F12M RatioOver the last five years, the industry has traded as high as 16.58X and as low as 5.68X, with the median being at 10.74X.3 Mining-Silver Stocks to Keep an Eye OnBuenaventura Mining Company: The company recently announced that it has received government of Peru's approval of all required permits for the San Gabriel Mine Project — an important milestone that enables this important project to move forward. San Gabriel will almost double the company's current gold production starting in 2025 and will contribute between 120,000-150,000 gold ounces annually. This project is aligned with its strategy to deliver growth projects and strengthen its precious metals portfolio. The company has announced multiple transactions this year to enhance balance sheet strength, reduce debt, invest in growth projects and focus on its portfolio. Backed by these efforts, the shares of the company have surged 51% so far this year. It has a solid pipeline of projects that will deliver growth in the long haul. The company's efforts to reduce costs at its direct operation mines have resulted in significant cost savings in each of its mines and led to higher EBITDA performance.The Zacks Consensus Estimate for the Lima, Peru-based company's current-year earnings has moved up 40% over the past 30 days. The estimate indicates year-on-year growth of 65.3%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Price & Consensus: BVNFortuna Silver: The company recently reported a 93% surge in gold production to 66,800 ounces in the first quarter of 2022. Total gold output benefited from contributions of 30,068 ounces from the Lindero mine and 28,235 ounces from the Yaramoko mine (acquired in July 2021). Silver production was 1,670,128 ounces, suggesting a 13% drop year on year as expected, primarily due to a decrease in head grade at the San Jose mine, which was in line with the Mineral Reserve average grade. FSM stated that all of its mines remain on track to achieve the full-year guidance and maintain its silver production guidance at 6.2-6.9 million ounces. Its share price has appreciated 11.6% year to date. The company will continue to gain from its focus on maximizing production while simultaneously maintaining operational efficiencies to lower cash costs. Its disciplined strategy of locating new deposits or pursuing mergers and acquisitions will continue to drive growth.The Zacks Consensus Estimate for Fortuna Silver's 2022 earnings has moved up 9.5% over the past 30 days. The company has a trailing four-quarter earnings surprise of 15%, on average. FSM currently carries a Zacks Rank #3 (Hold).Price & Consensus: FSMMAG Silver: It primarily holds 44% interest in the high-grade silver Juanicipio project located in the Fresnillo District, Zacatecas State, Mexico. It is a high-margin underground silver project with low development risks. Significant progress was achieved last year with the completion of construction of the 4,000 tons per day Juanicipio processing plant in the fourth quarter of 2021. The plant commissioning timeline was extended by approximately six months until the regulatory approval to tie into the national power grid is obtained. MAG recently announced that the plant commissioning timeline is now anticipated to commence in the ongoing quarter. The project is expected to come in on budget, with the processing plant expected to be ramped up to 85% to 90% of plant capacity by the end of this year. MAG recently announced that it has entered into an agreement to acquire Gatling Exploration Inc. in an all-share transaction. Gatling is a Canadian gold exploration company focused on advancing the Larder Gold Project, located in the prolific Abitibi greenstone belt in Northern Ontario, Canada. The Larder project hosts three high-grade gold deposits along the Cadillac-Larder Lake Break, 35 km east of Kirkland Lake. Backed by these developments, shares of the company have gained 14% year to dateThe Zacks Consensus Estimate for MAG Silver's earnings for fiscal 2022 indicates a 1000% improvement from 2021. The consensus mark has been revised upward by 3% over the past 30 days. It currently carries a Zacks Rank #3.Price & Consensus: MAG  Just Released: Zacks' 7 Best Stocks for Today Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +25.4% per year. These 7 were selected because of their superior potential for immediate breakout. See these time-sensitive tickers now >>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 Buenaventura Mining Company Inc. (BVN): Free Stock Analysis Report Fortuna Silver Mines Inc. (FSM): Free Stock Analysis Report MAG Silver Corporation (MAG): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksApr 19th, 2022

Top Stock Reports for Texas Instruments, Intuit & Lockheed Martin

Today's Research Daily features new research reports on 16 major stocks, including Texas Instruments Incorporated (TXN), Intuit Inc. (INTU), and Lockheed Martin Corporation (LMT). Tuesday, April 5, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Texas Instruments Incorporated (TXN), Intuit Inc. (INTU), and Lockheed Martin Corporation (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>Texas Instruments shares have gained +76.6% over the past two years as against the Zacks Semiconductor - General industry’s gain of +113.2%. The Zacks analyst believes that Texas Instruments is benefiting from a solid rebound in the automotive market. Further, a strong demand environment in the industrial, communication equipment, and enterprise systems markets is a major positive. Investments in new growth avenues and competitive advantages remain tailwinds.The company’s portfolio of long-lived products and efficient manufacturing strategies are other positives. Also, continuous returns to shareholders are likely to help the stock in gaining investor’s optimism further. However, coronavirus related uncertainties remain major headwinds.(You can read the full research report on Texas Instruments here >>>)Shares of Intuit have outperformed the Zacks Computer - Software industry over the past one year period (+26.7% vs. +16.9%). The Zacks analyst believes that the company is benefiting from strong momentum in online ecosystem revenues and solid professional tax revenues. The TurboTax Live offering is also driving growth in the Consumer tax business. Solid momentum in the company’s lending product, QuickBooks Capital, remains positive. Moreover, the company’s strategy of shifting its business to a cloud-based subscription model will help generate stable revenues over the long run.However, Intuit’s near-term prospect looks gloomy as the global lockdown amid the coronavirus crisis has affected small businesses, posing risks to its revenue growth. Additionally, higher costs and expenses due to increased investments in marketing and engineering teams are likely to continue impacting bottom-line results in the near term.(You can read the full research report on Intuit here >>>)Shares of Lockheed Martin have outperformed the Zacks Aerospace - Defense industry over the past one year period (+20.6% vs. -32.4%). Lockheed Martin is the largest U.S. defense contractor that has a steady inflow of orders from its leveraged presence in the Army, Air Force, Navy and IT programs. The Zacks analyst believes that expansionary U.S. budgets will also boost its business. The F-35 program continues to be a key growth program for its Aeronautics business unit. Apart from enjoying a strong forte on the domestic front, Lockheed Martin’s products are also well-acclaimed in the international market.However, America and Turkey's tiff on the latter accepting Russian products may hurt its component supply from Turkey. The company is facing performance issues concerning some of its products, which, in turn, may hurt its results. Also, an uncertainty revolving around the possible Chinese sanction on Lockheed might impact the latter.(You can read the full research report on Lockheed Martin here >>>)Other noteworthy reports we are featuring today include ConocoPhillips (COP), International Business Machines Corporation (IBM), and Stryker Corporation (SYK).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadAutomotive & Industrial Growth Aids Texas Instruments (TXN)Intuit (INTU) Rides on Product Refresh, Higher SubscriptionsOrder Growth Boosts Lockheed (LMT), Tiff With Turkey AilsFeatured ReportsConocoPhillips (COP) to Gain From Delaware Acreage PositionPer the Zacks analyst, ConocoPhillips is poised to gain from its prolific Delaware Basin position, which has enhanced prospects for its upstream business. Yet, rising production costs are concerning.IBM Gains From Investments to Expand its Business PortfolioPer the Zacks analyst, IBM is benefiting from investments in growth opportunities supporting its evolution as a platform-centric hybrid cloud and AI company while maintaining a strong balance sheet.Core MedSurg Unit Aids Stryker (SYK), Pricing Pressure AilsPer the Zacks analyst, Stryker continues to gain from solid prospects of its core MedSurg arm. However, pricing pressure continues to remain a woe.Target's (TGT) Omnichannel Efforts, Digitization to Aid SalesPer the Zacks analyst, Target's focus on enhancing omni-channel capacities, coming up with new brands, remodeling stores and expanding same-day delivery options have been fueling sales.Altria (MO) Gains on Robust Pricing, Oral Tobacco ProductsPer the Zacks analyst, Altria's adjusted operating companies income has been gaining from strong pricing power. Strength in oral tobacco products, such as on! is also working well for the company.Strategic Buyouts, Solid Balance Sheet Aid Public Storage (PSA)Per the Zacks Analyst, Public Storage is poised to benefit from its high brand value, healthy demand, robust presence in key cities, strategic acquisitions and a solid balance sheet position.Incyte (INCY) Jakafi Drive Growth, Pipeline Setbacks A WoePer the Zacks analyst, Incyte's lead drug Jakafi's label expansions should continue to fuel growth. The approval of new drugs will diversify the revenue base. However, the recent pipeline setbacks weiNew UpgradesReliable Assets, Free Cash Flow Plan Aid CNX Resources (CNX)Per the Zacks analyst CNX Resources' Marcellus and Utica shales assets will continue to boost production and long-term plan to generate $3.3 billion free cash flow will help to fortify balance sheet.Higher Methanol Pricing, Geismar 3 Aid Methanex (MEOH)Per the Zacks analyst, higher methanol prices will drive the company's margins. The Geismar 3 project will also enhance its asset portfolio and future cash generation.Rising Iron Prices to Aid Vale (VALE) Amid High CostsPer the Zacks analyst, high iron ore prices and demand, lower debt levels and Vale's focus on improving productivity and lowering costs will help offset input costs.New DowngradesChip-Crunch Associated Headwinds to Hurt Autoliv (ALV)Chip famine exacerbated by the Russia-Ukraine war along with high commodity and logistical costs borne by the firm have made the Zacks analyst bearish on Autoliv.Reducing Cash Reserves, High Leverage Ail Western Union (WU)Per the Zacks analyst, Western Union is grappling with decreasing cash balance, which raises concern. Moreover, its steep leverage ratio with high debt level reflects its weak solvency level.Rising Material Cost Hurts IPG Photonics' (IPGP) ProspectsPer the Zacks analyst, IPG Photonics is suffering from inflationary pressure on input costs. Increasing lead time for certain components is a significant headwind. Just Released: The Biggest Tech IPOs of 2022 For a limited time, Zacks is revealing the most anticipated tech IPOs expected to launch this year. Concerns about Federal interest rates and inflation caused many private companies to stay on the bench- leading to companies with better brand recognition and higher growth rates getting into the game. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity. See the complete list today.>>See Zacks Hottest IPOs NowWant 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 Lockheed Martin Corporation (LMT): Free Stock Analysis Report Texas Instruments Incorporated (TXN): Free Stock Analysis Report International Business Machines Corporation (IBM): Free Stock Analysis Report ConocoPhillips (COP): Free Stock Analysis Report Stryker Corporation (SYK): Free Stock Analysis Report Intuit Inc. (INTU): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 5th, 2022

Top Research Reports for Alphabet, Abbott, & Charles Schwab

Today's Research Daily features new research reports on 16 major stocks, including Alphabet Inc. (GOOGL), Abbott Laboratories (ABT) and The Charles Schwab Corporation (SCHW). Friday, March 25, 2022 The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Alphabet Inc. (GOOGL), Abbott Laboratories (ABT) and The Charles Schwab Corporation (SCHW). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>> Shares of Alphabet have outperformed the Zacks Internet - Services industry over the past year (+39.8% vs. +17.8%) on the back of solid momentum across search, advertising, cloud and YouTube businesses.  Further, the growing proliferation of consumer online activities and rising advertiser spending remained tailwinds. Alphabet's robust cloud division continues to be the key catalyst. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results. Moreover, Google’s mobile search is constantly gaining solid traction. Also, strong focus on AI techniques and the home automation space should aid business growth in the long term. Yet, its growing litigation issues remain concerns. (You can read the full research report on Alphabet here >>>) Abbott shares have declined -2% over the past year against the Zacks Medical - Products industry’s decline of -7.3%. However, Abbott did post better-than-expected earnings and revenue numbers for the fourth quarter of 2021. Barring Neuromodulation (a 7.5% year-over-year decline), the company registered organic sales growth across all its operating segments. The Zacks analyst believes that COVID-19 testing-related sales were driven by demand for BinaxNOW, Panbio and ID NOW rapid testing platforms. Within the Diabetes Care business, the company has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. Within Adult Nutrition, the company gained from the strong performance of Ensure and Glucerna brands. However, the company’s projection indicates a fall in COVID testing revenues through the later part of 2022. Year-over-year drop in Neuromodulation sales was concerning. (You can read the full research report on Abbott here >>>) Shares of Charles Schwab have outperformed the Zacks Financial - Investment Bank industry over the past year (+39.3% vs. +7.6%). The Zacks analyst believes that strategic acquisitions have reinforced Schwab's position as a leading brokerage player. The same will likely be accretive to earnings. Offering commission-free trading has led to a rise in client assets and brokerage accounts, thereby improving trading revenues. Schwab's efficient capital deployments reflect a solid balance sheet position, through which it will enhance shareholder value. However, despite expectations of a few rate hikes, relatively lower interest rates will likely keep hurting margins in the near term. Elevated operating expenses might hamper the company's bottom-line growth to an extent. (You can read the full research report on Charles Schwab here >>>)Other noteworthy reports we are featuring today include Philip Morris International Inc. (PM), Canadian National Railway Company (CNI) and Air Products and Chemicals, Inc. (APD).Sheraz Mian Director of Research Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>> Today's Must ReadAlphabet (GOOGL) Benefits From Cloud & Search InitiativesAbbott Thrives on COVID-19 Testing Amid Forex WoesBuyouts, Trading Focus Aid Schwab (SCHW), Higher Costs A WoeFeatured ReportsWide Customer Base, Renewable Focus Aid NRG Energy (NRG)Per the Zacks analyst NRG Energy's wide customer base provides surety to future earnings and its initiatives to trim emission will continue to boost its performance over the long-run.Marathon (MPC) Gains from Sale of Speedway Retail UnitThe Zacks analyst likes Marathon's sale of Speedway business, which provided a much-needed cash infusion and came with a supply agreement ensuring a steady revenue stream.CrowdStrike (CRWD) Rides on Product Strength, AcquisitionsPer the Zacks analyst, CrowdStrike is gaining from solid contributions of its growth-oriented products, primarily Falcon platform. Moreover, strategic buyouts like Humio and Preempt are a positive.Owens Corning (OC) Banks on Business Initiatives, AcquisitionPer the Zacks analyst, strategic initiatives like expansion via acquisitions, technology investments, commercial and operational execution, and cost controls are benefiting Owens Corning.Phillip Morris (PM) Gains From Smoke-Free Product CategoryPer the Zacks analyst, Philip Morris has been gaining from solid focus on the reduced-risk smokeless products category. In fourth quarter, sales from RRP's increased 23.4% year over year.Low Debt Aids Canadian National (CNI) Amid High Fuel CostsThe Zacks analyst is impressed with Canadian National's low debt levels. However, rising fuel costs are hurting bottom-line growth.Project Investments, Productivity to Aid Air Products (APD)While Air Products faces headwinds from higher power and fuel costs, it should gain from investments in high-return industrial gas projects and productivity actions, per the Zacks analyst.New UpgradesBuyouts, Higher Fees & Commissions Aid Arthur J. Gallagher (AJG) Per the Zacks analyst, a number of acquisitions have helped Arthur J. Gallagher to enhance its capabilities and drive growth. Also, improving fees and commissions should drive organic revenue growth. Strong Demand & Increased Prices to Drive Sonoco (SON)The Zacks analyst believes that Sonoco will benefit from strong demand in many of its key end market as well as strong price and cost recovery across most of its businesses.High Demand & Online Strength Aids Nordstrom's (JWN) Top LinePer the Zacks analyst, Nordstrom has been gaining from solid demand for apparel and footwear as well as robust digital traffic in both Nordstrom and Nordstrom Rack. As a result, sales grew 23% in Q4.New DowngradesHigh Fuel Costs, Reduced Capacity Hurt Alaska Air (ALK)The Zacks analyst is concerned about escalating fuel prices, which have the potential to hurt Alaska Air's bottom line. Additionally, reduced capacity is pushing up the company's unit costs.Supply Chain Woes & Stiff Competition to Hurt Plexus (PLXS)Per the Zacks analyst, pandemic induced supply chain troubles continue to be a major headwind for Plexus. Intensifying competition in the contract manufacturing space is an added concern.Prothena's (PRTA) Dependence on Collaboration Revenues A Woe With no marketed drugs, Prothena is highly dependent on its pipeline candidates which are still several years from commercialization. The Zacks Analyst feels concerns for any development setback. Just Released: Zacks' 7 Best Stocks for Today Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +25.4% per year. These 7 were selected because of their superior potential for immediate breakout. See these time-sensitive tickers now >>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 Air Products and Chemicals, Inc. (APD): Free Stock Analysis Report Abbott Laboratories (ABT): Free Stock Analysis Report Canadian National Railway Company (CNI): Free Stock Analysis Report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Philip Morris International Inc. (PM): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMar 26th, 2022

Will Industrial ETFs Gain From Improving US Output?

The latest update on the U.S. industrial output is encouraging amid an improving labor market and easing pandemic conditions. The latest release on U.S. industrial output data came out to be relieving amid an improving labor market and easing pandemic conditions. Per the Fed’s recently-released data, total industrial production rose 0.5% in February.A 1.2% rise in the manufacturing output compared favorably with the index remaining almost flat in the last two months. There was a 2.7% decline in utility production. The return of seasonable weather after a drop in temperature in January induced such a discouraging metric. However, mining production witnessed a nominal 0.1% gain, mainly as weakness in oil and gas extraction activities was offset by strength in support activities for oil and gas operations.Considering the latest data release, investors can track ETFs like The Industrial Select Sector SPDR Fund (XLI), Vanguard Industrials ETF (VIS), Fidelity MSCI Industrials Index ETF (FIDU) and iShares U.S. Industrials ETF (IYJ), which might gain from an improving industrial output.Total industrial production increased 7.5% from the year-ago figure in February. However, the comparison may seem a little biased due to extreme winter weather conditions witnessed in February 2021, disturbing the industrial output activities. To analyze more logically, the index has risen 4.2% since January 2021. According to the Fed’s report, the durable and the nondurable manufacturing indexes rose 1.3% and 1.1% in February, whereas the other manufacturing (publishing and logging) index was down 0.4%.Capacity utilization for the industrial sector rose 0.3% in February to 77.6%. The manufacturing capacity utilization for the industry, which is the measure for studying how efficiently firms are utilizing their resources, increased 0.9% in February to 78%, up 2.5 percentage points from its pre-pandemic level, per the Fed’s report.Present U.S. Economic ScenarioMarket gyrations have been a common phenomenon in 2022 so far. The Federal Reserve finally gave a nod on Mar 16 to the first rate hike of a 0.25 percentage since December 2018. At the same time, while taking an aggressive approach to increasing the rates, the central bank informed about plans to increase interest rates six times this year. The Federal Reserve is aiming at a consensus funds rate of 1.9% by 2022 end (per a CNBC article).The Russia-Ukraine crisis, inflation at a 40-year high and the Fed’s hawkish outlook for the interest rate are persistently adding to market ambiguity. As the war tension continues, rising commodity prices and fears of further disruptions in global supply-chain distributions might stoke higher inflation. Also, as the Federal Reserve took an aggressive approach to increasing the rates, market participants are worrying about the U.S. economy slipping into stagflation due to high interest rates and steep inflation.The surge in gasoline prices to record high levels hurt the consumer sentiment. The latest disappointing preliminary consumer confidence readings for early March that have slipped to the lowest level in about 11 years highlight the same.Meanwhile, the U.S. economic fundamentals have been staying strong. Despite disappointing U.S. consumer sentiment levels, consumer spending remained robust. Moreover, the labor market continues to improve. According to the Bureau of Labor Statistics, the U.S. economy added 678,000 jobs in February, beating economists’ expectations of 440,000 (per Dow Jones). The unemployment rate also dropped to 3.8%.The Institute of Supply Management (ISM) reported that its manufacturing index for February rose to 58.6% from 57.7% in January, beating the consensus estimate of 57.7%. This marked the 21st successive month of growth for the U.S. manufacturing industry.Industrial ETFs in FocusIn the current scenario, we believe, it is prudent to discuss ETFs that have relatively high exposure to industrial companies:The Industrial Select Sector SPDR Fund XLI           The Industrial Select Sector SPDR Fund seeks to provide investment results that before expenses, match the performance of the Industrial Select Sector Index. The Industrial Select Sector SPDR Fund has an AUM of $16.44 billion and an expense ratio of 0.10% (read: 6 Sector ETFs That Show Promise After Jobs Data).Vanguard Industrials ETF VIS                   Vanguard Industrials ETF offers exposure to the industrial sector and follows the MSCI US Investable Market Industrials 25/50 Index. Vanguard Industrials ETF manages an AUM of $4.74 billion and an expense ratio of 0.10%.Fidelity MSCI Industrials Index ETF FIDUThe Fidelity MSCI Industrials Index ETF seeks to provide investment returns that match, before fees and expenses, the performance of the MSCI USA IMI Industrials Index. Fidelity MSCI Industrials Index ETF has an AUM of $820.8 million and an expense ratio of 0.08%.iShares U.S. Industrials ETF IYJThe iShares U.S. Industrials ETF seeks to track the investment results of the Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index. iShares U.S. Industrials ETF has an AUM of $1.40 billion and an expense ratio of 0.41%, as stated in the prospectus. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it 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 Vanguard Industrials ETF (VIS): ETF Research Reports Industrial Select Sector SPDR ETF (XLI): ETF Research Reports iShares U.S. Industrials ETF (IYJ): ETF Research Reports Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMar 24th, 2022

4 Top Stocks to Ride the Momentum in Manufacturing Activity

With the Industrial Products sector on a roll for 18 straight months, we suggest betting on these four stocks - EMR, BERY, RS and AIT that are poised to gain on this momentum. The U.S manufacturing sector has been performing well for 18 consecutive months now, courtesy of strong demand for goods. Considering the plethora of issues plaguing the sector currently — labor shortage, inflationary pressures, shortage of critical raw materials, record-long lead times and hurdles in transporting products, this momentum in manufacturing activity looks promising.The sector has rebounded strongly from the contraction suffered in March to May last year due the COVID-19 pandemic. Factory closures due to restrictions imposed by several governments, pandemic-induced supply chain disruptions and low demand for goods crippled the sector. The sector regained its ground in mid-2020 as economies started reopening and businesses resumed operations. It has been gaining momentum ever since, with new orders and production on a roll. Stocks like Emerson Electric Co. EMR, Berry Global Group BERY, Reliance Steel & Aluminum Co. RS and Applied Industrial Technologies AIT are well-poised to gain on these trends.Per the Federal Reserve, U.S industrial production increased 1.6% in October, which was 5.1% above its year-earlier level and marking the highest reading since December 2019. Manufacturing output advanced 1.2% — the highest level since March 2019. All major market groups posted gains; the largest increases coming from materials, consumer goods, and defense and space equipment.Farm equipment makers have been gaining from the improving farm income dynamics, which has persuaded farmers to resume investing in new equipment and replacing their aging fleets. Increasing demand from residential construction, backed by the rising need for more work-at-home spaces and record-low mortgage rates, has been acting as a tailwind for the construction equipment manufacturers. The companies that provide packaging solutions are gaining from the e-commerce boom and the solid demand for essential products amid the pandemic. Increased spending in the mining industry on the back of improving commodity prices and the industry’s increasing preference for automation to increase efficiency bolstered demand for the mining equipment manufacturers. On top of this, increased government spending to rebuild roads, bridges and waterways will translate into fresh demand for construction materials and equipment, infrastructure engineering and design companies, and ones making machinery parts.Per our latest Earnings Trends report, the Industrial Products sector is expected to deliver a 38.2% growth in earnings in 2021 — a stark contrast to the COVID-19 induced drop of 14.7% in earnings witnessed in 2020. The earnings growth forecast for the next year for the sector is at 15.3%.To capitalize on the sector’s growth, we highlight the following four stocks with a solid Zacks Rank and robust growth prospects. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.4 Stocks to Bet OnImage Source: Zacks Investment ResearchEmerson Electric: The company is poised to benefit from a strong recovery in discrete and hybrid end markets. Improvements in process automation end markets and robust backlog level at its Automation Solutions segment are likely to drive its revenues in the quarters ahead. Strength across the food and beverage, cold chain, residential heating, ventilation, and air conditioning end markets also remain conducive. Its shares have gained 13.1% so far this year. Acquisitions have been the company’s preferred mode of business expansion. Its restructuring actions will boost margins.Emerson Electric has a Zacks Rank #2 and a VGM Score of A. It has an expected earnings growth of 18.7% for the current year. The Zacks Consensus Estimate for AMR’s current-fiscal earnings has been revised upward by 7% over the last 60 days. The company has a trailing four-quarter earnings surprise of 10.7%, on average. The company also has an estimated long-term earnings growth rate of 8.7%.Berry Global: The company continues to gain from the ongoing strength in the food & beverage and healthcare end markets, along with recovery in the construction space. Backed by this, its share price has appreciated 25.8% so far this year. Focus on improving operational productivity, along with its partnerships across the value chain, is likely to act as a key catalyst. Its investments in equipment technologies, advantaged film development and design for circularity are likely to boost its competency.Berry Global has an expected earnings growth of 2.6% for the current year. The consensus mark for its current-year earnings has gone up 17% over the last 60 days. The company has a trailing four-quarter earnings surprise of 16.5%, on average. It has a long-term estimated earnings growth of 10%. It has a Zacks Rank #2 and a VGM Score of B.Reliance Steel & Aluminum: The company is seeing a strong rebound in non-residential construction — its largest market. It is also witnessing healthy bidding activities for new projects. Its broad and diversified product base and a wide geographic footprint provide it with a competitive edge. Strategic acquisitions and investments in new processing capabilities will also drive growth. Its shares have gained 28.5% so far this year.Reliance Steel currently has a Zacks Rank #2 and a VGM Score of B. It has an expected earnings growth of 162.5% for the current year. Over the past 60 days, the Zacks Consensus Estimate for its current-year earnings has been revised upward by 6%. The company has a trailing four-quarter earnings surprise of 4.4%, on average.Applied Industrial Technologies: The company is likely to benefit from the strengthening demand environment in industrial markets along with pricing actions and growth. Focus on acquisitions, improving the product line, value-added services, initiatives to drive operational excellence and cost-saving initiatives will yield results. Its investments in expanding automation, IIoT, and digital offerings and customer development initiatives are likely to act as tailwinds. The company’s shares have rallied 30.6% year to date.Applied Industrial currently has a Zacks Rank #2 and a VGM Score of B. It has an expected earnings growth rate of 14% for the current year. The Zacks Consensus Estimate for its current-year earnings has moved up 2% in the last 60 days. AIT has a trailing four-quarter earnings surprise of 26.7%, on average. 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 Emerson Electric Co. (EMR): Free Stock Analysis Report Reliance Steel & Aluminum Co. (RS): Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report Berry Global Group, Inc. (BERY): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 7th, 2021

Stocks Soar On Optimism Omicron Is A Dud As Traders Focus On Growing China Stimulus

Stocks Soar On Optimism Omicron Is A Dud As Traders Focus On Growing China Stimulus U.S. index futures rallied, led by gains for Nasdaq 100 contracts, amid waning omicron worries and a booster shot of Chinese stimulus lifted world stock markets and oil on Tuesday and left traders offloading safe-haven currencies and bonds for the second day in a row. Emini S&P futures were up 61 point to 4,650.75 or about 120 points higher then where Gartman said "stocks are headed lower" some 24 hours ago. Nasdaq futures were up 1.8% and Dow futures rose 1% in premarket trading. In fact, futures are now just 50 points away from where they were below the Black Friday Omicron panic plunge. The FTSEurofirst 300 index was on track for its first back-to-back run of plus 1% gains since February while Asia saw record bounces from some of China's biggest firms such as Alibaba which soared by the most since its 2019 listing in Hong Kong, leading a rebound in Chinese tech stocks, as bargain hunters piled in amid improved sentiment following Beijing’s move to bolster the economy. The MSCI Asia Pacific Index climbed 1.7% while Japan’s Topix index closed 2.2% higher. The VIX dropped for a second day, sliding below 24, but remained above this year’s average. The risk-on mood also helped the dollar climb against safe haven currencies such as the Japanese yen, , which had lost 0.6% overnight, as the confidence-sensitive Australian dollar also found buyers. Safe-haven government bonds went the other way with yields  up 2.5% on Germany's benchmark 10-year Bund after falling to a three-month low on Monday. Reports in South Africa said Omicron cases there had only shown mild symptoms and the top U.S. infectious disease official, Anthony Fauci, told CNN "it does not look like there's a great degree of severity" so far. "Good news relating to the severity of Omicron should be taken with a pinch of salt. Faster transmission could offset the benefits of milder symptoms," researchers at ING said in a note. "More broadly, it is still early days, even if markets are starting to display Omicron fatigue." "While epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably surmised that last week's brutal sell-off ought to have been milder," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note. "After all, early assessments of Omicron cases have been declared mild, spurring half-full relief." There are signs of “a fragile improvement in market mood,” said Ipek Ozkardeskaya, senior analyst at Swissquote. Still, “no headline addresses the major concern of the week: the rising U.S. inflation, which is a big threat to the investor mood, as the U.S. CPI data is due Friday, and the expectation is an advance to a strong 6.7%,” Ozkardeskaya wrote in a report. “We could see wild mood swings into the second half of the week.” The gains also came after China's central bank on Monday injected its second shot of stimulus since July by cutting the RRR - or the amount of cash that banks must hold in reserve. Then on Tuesday, the PBOC said that the Interest rate for relending to support rural sector and smaller firms will be cut by 0.25 percentage point, effective from today, with 3-mo, 6-mo and 1-yr relending rates will be cut to 1.7%1.9% and 2%. After pretending it would let the economy falter for months, Beijing is finally firmly in pro-growth mode with the Politburo stating that stability is the top priority ahead of next year’s Communist Party congress. Premier Li Keqiang also said China has room for a variety of monetary policy tools after yesterday’s reserve ratio cut. As a result, the beaten down financial and property stocks were the biggest winners amid the change in tone from policy makers. In Hong Kong, Alibaba Group Holding Ltd. soared by the most since its 2019 listing. Global markets are also getting a lift from the easing policy pivot in world’s second-largest economy which we first flagged more than a weeks ago. * * * In the premarket, Intel shares rose 7.7% in premarket trading after the chipmaker confirmed a WSJ report that it plans to float a minority stake in its Mobileye self-driving car business by the middle of next year. Alibaba jumped as much as 5.4% in U.S. premarket trading Tuesday, adding to a 10% rally on Monday as with Chinese tech stocks rebound. Alibaba’s climb in the U.S. comes after its shares posted their biggest gain since June 2017 on Monday. Cruise operators and airline stocks are trading higher for a second session as investors assess the severity of the omicron virus variant. American Airlines was among the notable outperformers after naming President Robert Isom to replace retiring CEO Doug Parker. AAL rose 3% in premarket trading, while UAL climbs 2.6% and JBLU jumps 2.7%; other gainers include: ALK +2.6%, DAL+2.3%, LUV +2.4%, Royal Caribbean and Norwegian Cruise added 3.3%, while Carnival increased 3.1% in premarket trading. Casino operators also rebounded, led by Las Vegas Sands +3.5%, Wynn Resorts +2.7%, MGM Resorts +2.3% after Hong Kong’s Carrie Lam said the city will prioritize quarantine-free travel for business people when its border with mainland China reopens. In Europe every industry sector rose, led by tech and mining companies, to push the Stoxx 600 Index to a 2% gain led by technology, mining and consumer companies. AstraZeneca was an outliker, falling 2% in London after the company agreed to pay Ionis Pharmaceuticals as much as $3.6 billion to gain rights to a promising medicine for a rare disease. European e-commerce stocks that benefited from increased demand during pandemic-related lockdowns rose in Europe on Tuesday, with many outperforming the benchmark Stoxx 600’s biggest gain since March. Among the names were Allegro +6.3%, Moonpig +5.3%, Global Fashion Group +5.3%, Asos +5.1%, Zalando +4.6%, THG +3.7%, Boozt +3.3%, Ocado +2.4%, Boohoo +1.9%. “As concerns grow over rising case numbers, we expect some people will prefer to shop online again to limit their visits to stores,” Fraser McKevitt, head of retail and consumer insight at Kantar, says in emailed comments. Asian equities advanced, on track for their best day in more than three months, following China’s latest moves to bolster growth in the world’s second-largest economy.  The MSCI Asia Pacific Index rose as much as 1.8%, poised for its biggest gain since Aug. 24. Consumer-discretionary firms contributed most to the market’s climb, led by Alibaba as bargain hunters snapped up recently rattled Chinese tech stocks. Benchmarks in Hong Kong and Japan led broad gains around the region.  China’s central bank said it will cut the amount of cash most banks must keep in reserve from Dec. 15, providing a liquidity boost. Meanwhile the Communist Party’s Politburo signaled an easing of curbs on the battered real-estate sector. “Anxiety over the Chinese economy is abating thanks to the cut in the banks’ reserve ratio and a partial easing of real-estate regulations,” said Hiroshi Namioka, chief strategist at T&D Asset Management Co. Plus, “an overall risk-on mood is being created as people turn increasingly optimistic about any impact from the omicron, leading to higher U.S. equities and long-term yields.”  Financials and industrials also boosted the region’s key equity gauge Tuesday as investors looked toward reopening prospects. The day’s rebound marks a sharp turnaround following weeks of declines since mid-November. U.S. equities overnight rebounded from Friday’s selloff after reports that cases of the omicron variant have been relatively mild. Japanese equities rose by the most in over a month, as investors were cheered by reports of Chinese policy makers moving to support the nation’s economy and that global omicron virus cases have been relatively mild. Electronics makers and telecoms were the biggest boosts to the Topix, which gained 2.2%, the most since Nov. 1. SoftBank Group and Tokyo Electron were the largest contributors to a 1.9% rise in the Nikkei 225. The yen extended its loss against the dollar after weakening 0.6% overnight. U.S. stocks climbed Monday after news from South Africa that showed hospitals haven’t been overwhelmed by the latest wave of Covid cases. Meanwhile, China President Xi Jinping oversaw a meeting of the Communist Party’s Politburo on Monday that concluded with a signal of an easing in curbs on real estate. “Cyclical stocks, China-linked names and automakers that had been sold on a stronger yen will likely be bought up following China’s change in policy stance,” said Hideyuki Ishiguro, a strategist at Nomura Asset Management in Tokyo. “This will alleviate worry over a slowdown in the Chinese economy.” India’s benchmark equity index bounced back from a three-month low on optimism that the global economic recovery may be able to withstand risks associated with the omicron virus variant.  The S&P BSE Sensex climbed 1.6% to 57,633.65, in Mumbai, while the NSE Nifty 50 Index also advanced by a similar magnitude. ICICI Bank Ltd. provided the biggest boost to both the gauges with a 3.5% gain. Out of the 30 shares in the Sensex, 29 rose and one fell. All 19 industry sub-indexes compiled by BSE Ltd. gained, led by a measure of metals companies. The uncertainty from the omicron variant, along with expectations of rapid tapering by the U.S. Federal Reserve have tested the risk appetite of investors in the previous two sessions in India. However, markets across Asia advanced Tuesday after China pledged measures to support slowing economic growth. “Indian markets mirrored the sharp buoyancy in global indices on the back of short-covering by market participants. The rally was backed by a sharp upsurge in banking and metal stocks, which had taken a severe hammering in recent sessions,” Shrikant Chouhan, head of equity research at Kotak Securities Ltd. wrote in a note.  Australia’s central bank -- at its monetary policy meeting Tuesday -- left its key interest rate unchanged and said that while the strain is a source of uncertainty, it’s not expected to derail the recovery. Reserve Bank of India will announce its rate decision on Wednesday.  In FX, the Dollar Spot Index inched lower as commodity currencies led gains among Group-of-10 peers. The volatility skew for the Bloomberg Dollar Spot Index shows bullish bets on the greenback over the one-month tenor stand near their lowest since August. This may change as soon as next week after Friday's CPI report. The euro reversed an Asia session gain to touch a December low of $1.1254 in early European hours. Bunds and Italian bonds slumped, led by the belly after ECB’s Holzmann yesterday said rate hikes are possible while still buying debt. Money markets continue to price the first 10bps rate hike in December 2022 but October pricing jumps to 7.5bps from 6bps on Monday. The pound was steady against the dollar, trailing other risk-sensitive currencies, with focus on next week’s Bank of England meeting and how officials will assess the threat of the omicron strain. The Norwegian krone and the Canadian dollar advanced amid rising oil prices and before the Bank of Canada meeting Wednesday. Australian bond yields extended gains and the Aussie dollar advanced versus all of its G-10 peers as central bank optimism that omicron won’t disrupt the economic recovery underscored bets on sooner-than-expected rate hikes. Australia’s central bank left monetary settings unchanged, citing uncertainties from omicron, while highlighting positive signs in the labor market and broader economy. Finally, the yen fell a second day after easing concern over the coronavirus omicron variant In rates, Treasuries were narrowly mixed with the front-end lagging ahead of today's 3-year auction. Treasury 2-year yields were cheaper by 2.2bp on the day, flattening 2s10s spread by 1.8bp and unwinding portion of Monday’s steepening move; 10-year yields around 1.436%, slightly cheaper on the day. Bunds lag by 1.3bp after ECB’s Holzmann says rate hikes are possible while still buying debt -- BTP’s cheapen 2.5bp vs. Treasuries in 10-year sector. U.S. TSY auctions resume with $54b 3-year note sale at 1pm ET, before $36b 10- and $22b 30-year Wednesday and Thursday; the WI 3-year around 0.973% is above auction stops since Feb. 2020 and ~22bp cheaper than November’s sale, which tailed the WI by 1bp. In commodities, oil prices jumped another 2% to $74.60 a barrel, adding to a near 5% rebound the day before as concerns about the impact of Omicron on global fuel demand eased; WTI rose about 3% near $71.50. Copper prices also ticked higher while gold was steady at $1,778.5 per ounce on expectations U.S. consumer price data due later this week will show inflation quickening. European natural gas futures rose on talk of fresh Russian sanctions. Spot gold is choppy near $1,780/oz. Base metals are well bid given the broader risk-on tone: most of the complex rises over 1% with LME zinc outperforming.  Looking at today's calendar, we have trade balance data for October at 8:30 a.m, while the EIA short-term energy outlook is published at 12:00 p.m. The US sells $54 billion of 3-year notes at 1:00 p.m. Biden and Putin talk from 10:00 a.m. Jeffrey Gundlach hosts his Total Return webcast from 4:15 p.m. Autozone Inc. and Toll Brothers Inc. report results. Market Snapshot S&P 500 futures up 1.3% to 4,650 STOXX Europe 600 up 1.7% to 476.71 MXAP up 1.7% to 193.18 MXAPJ up 1.7% to 627.71 Nikkei up 1.9% to 28,455.60 Topix up 2.2% to 1,989.85 Hang Seng Index up 2.7% to 23,983.66 Shanghai Composite up 0.2% to 3,595.09 Sensex up 1.6% to 57,657.07 Australia S&P/ASX 200 up 0.9% to 7,313.90 Kospi up 0.6% to 2,991.72 Brent Futures up 2.3% to $74.73/bbl Gold spot up 0.0% to $1,778.95 U.S. Dollar Index little changed at 96.36 German 10Y yield little changed at -0.36% Euro down 0.2% to $1.1268 Top Overnight News from Bloomberg The ECB said its supervision arm will focus its scrutiny in the coming three years on risks that lenders face from a potential spike in bad loans and their search for higher returns Hungary’s central bank is nowhere close to stopping a monetary tightening campaign that will make the country’s real interest rates the highest in central Europe, Deputy Governor Barnabas Virag said The U.S. and European allies are weighing sanctions targeting Russia’s biggest banks and the country’s ability to convert rubles for dollars and other foreign currencies should President Vladimir Putin invade Ukraine, according to people familiar with the matter China’s exports and imports grew faster than expected in November, with both hitting records as external demand surged ahead of the year-end holidays and domestic production rebounded on an easing power crunch. Some China Evergrande Group bondholders have not received overdue coupon payments after the end of a month-long grace period, putting the world’s most indebted property developer on the brink of its first default on offshore notes U.K. house prices hit a record in November, with values over the past three months rising at their fastest pace for 15 years, according to mortgage lender Halifax A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mostly positive following the heightened risk appetite among global peers, including in the US, where the DJIA posted its best performance since March and all sectors in the S&P 500 finished positive. Omicron concerns abated throughout the session and resulted in notable outperformance across travel and leisure stocks, while the region also took its opportunity to digest the PBoC's recent RRR cut announcement and mostly better than expected Chinese trade data. The ASX 200 (+1.0%) was positive with broad gains across its sectors aside from utilities and with momentum helped after a lack of surprises at the RBA policy decision - which refrained from any policy tweaks. Nikkei 225 (+1.9%) outperformed and regained a firm footing above the 28k level as exporters benefitted from a weaker currency, and with the advances led by SoftBank which atoned for the recent declines in its portfolio companies. The Hang Seng (+2.7%) and Shanghai Comp. (+0.2%) were both initially lifted in early trade after the announcement of the PBoC’s RRR cut, which is said to likely calm markets amid increasing developer risks, although the mainland bourse then gave back its gains after the PBoC continued to drain liquidity in its daily open market operations. Furthermore, reports that the PBoC lowered its relending rate by 25bps for agricultural and small companies also failed to boost the mainland as this is viewed as a more targeted supportive measure. Finally, 10yr JGBs declined and re-approached the key psychological 152.00 level on spillover selling from USTs as stocks gained and Omicron fears abated. The results of the latest 30yr JGB auction were mixed with higher accepted prices and lower yield offset by a weaker b/c and wider tail in price. Top Asian News Asian Stocks Set for Best Day in 3 Months as China Tech Rebounds Alibaba Jumps Most Since H.K. Listing as China Tech Rebounds Malaysia Court Dismisses Najib’s Plea, SRC Verdict Due Wednesday LG Energy Seeks Up to 12.75t Won IPO, Biggest in Korea European stocks have conformed to the risk appetite seen across global peers (Euro Stoxx 50 +2.5%; Stoxx 600 +2.0%), which initially emanated from Wall Street, before seeping into APAC and reverberating in Europe. There is no clear catalyst behind the gains, although desks have been attributing the optimism to receding fears regarding the Omicron variant – with no recorded deaths thus far. That being said, some of the key tail risks to markets have not subsided, with liquidity also expected to be more anemic in the run-up to next week’s risk-packed docket before year end. Nonetheless, US equity futures are grinding higher with the NQ (+1.9%) in the lead, closely followed by the RTY (+1.7%), whilst the ES (+1.3%) and YM (+1.0%) see slightly less pronounced gains. Back in Europe, Euro-bourses see broad-based upside but the UK’s FTSE 100 (+1.1%) and the Swiss SMI (+0.7%) are capped by underperformance in the defensive sectors – with Healthcare and Food & Beverages towards the bottom of the bunch. Sectors are overall in the green with a clear and firm pro-cyclical bias. Tech leads the gains following its recent underperformance, with Basic Resources also among the winners as base metals post decent gains. In terms of individual movers GSK (+0.5%) remains supported after pre-clinical data demonstrate the potential for monoclonal antibody Sotrovimab to be effective against the latest variant, Omicron, plus all other variants of concern defined to date by the WHO. As a reminder, the co. last week said its COVID treatment Sotrovimab retains its activity against the Omicron variant. British American Tobacco (+2.1%) is firmer followed by a positive trading update alongside Babcock (+5.2%) and Ferguson (+4.0%). On the downside, AstraZeneca (-1.7%) resides towards the foot of the Stoxx 600 amid a downgrade at Jefferies, alongside the broader anti-defensive narrative. Looking at analysts’ commentary, Barclays suggests that the Fed is unlikely to over-deliver on the rate hikes that are already priced in, with the bank unphased by the recent Powell pivot and Omicron resurgence. Barclays maintains its positive view on 2022 equities and upgraded its European small caps to overweight on improving fundamentals but oversold performance, and downgraded Momentum to market-weight. Top European News U.K. House Prices Post Strongest Quarterly Increase Since 2006 Republicans’ Pecresse Ties With Le Pen in French Poll Ferguson 1Q U.S. Organic Revenue Beats Estimates EU Aims to Unveil Green Rules for Gas, Nuclear Projects Dec. 22 In FX, although the Buck remains bid on bullish US fundamentals and the index is finding plenty of underlying buying interest/support into 96.000, the overall market mood is constructive enough to help riskier currencies outperform, and shrug off another dovish RBA policy meeting in the case of the Aussie. Instead, Aud/Usd and Aud/Nzd are gaining more ground on the coattails of iron ore prices and favourable tradewinds, as Chinese imports surged beyond expectations and outpaced exports that also beat consensus to leave the surplus somewhat short of the mark. The headline pair reached 0.7101 before running into resistance and 1.2 bn option expiry interest at the 0.7100 strike, while the cross has breached 1.0450 convincingly to expose 1.0500 ahead of NZ Q3 manufacturing sales on Wednesday and following RBNZ Assistant Governor Hawkseby sticking to a considered line on further rate normalisation overnight. He also said the Kiwi is in a broad range of where it is expected to be and that a higher currency in the short-term will help us achieve objectives more quickly. Nzd/Usd is still rotating around 0.6750, while the Loonie is latching on to the latest leg up in WTI over Usd 71/brl to test offers protecting 1.2700 vs its US rival in advance of Canadian and US trade data, Ivey PMIs and tomorrow’s BoC, with the DXY fading following a fleeting breach of Monday’s peak within 96.447-168 confines, Note also, 1.1 bn option expiries reside between 1.2750-55 in Usd/Cad and could cap recovery rallies. Elsewhere, the Scandinavian Crowns continue to rebound from recent lows against the Euro, and Brent’s bounce to the brink of Usd 75/brl is helping the Nok probe 10.2000 rather than a somewhat mixed Norges Bank regional network survey, while the Sek is lagging circa 10.2400 amidst Riksbank concerns over the lack of liquidity and transparency in Sweden’s corporate bond market that needs to be addressed. CHF/GBP/EUR/JPY - The G10 laggards to varying degrees, with the Franc trying to pare losses from sub-0.9250 vs the Dollar and more successfully against the Euro from almost 1.0450 towards 1.0400, while the Pound is holding mostly above 1.3250 in Cable terms and Eur/Gbp is pivoting 0.8500 as the single currency remains under the psychological 1.1300 level vs the Greenback irrespective of supportive Eurozone macro impulses via better than forecast German industrial output and ZEW economic sentiment over bleak current conditions. Similarly, the Yen remains weak on risk and rate/yield dynamics and Usd/Jpy is now firmer within a loftier 113.40-74 range before a raft of Japanese releases including Q3 GDP revisions and October’s current account balance. EM - More easing in China, but resilience or even ongoing strength in the Cny and Cnh in wake of the PBoC shaving 25 bp off the relending rate for agricultural and small companies, according to sources in the Securities Times that also suggests in tune with the China Daily that an LPR cut may be in the offing. Conversely, weakness in the Rub awaiting the call between Putin and Biden and the Zar on the back of SA GDP missing already low-key expectations, but the Try is nursing some declines in what could be reasonably described as intervention fashion. In commodities, WTI and Brent front-month futures are firmer on the session, buoyed by the risk appetite across the markets. From a fundamental standpoint, the benchmarks remain underpinned by the lack of progress in Iranian nuclear talks coupled with the OSP hike seen by Saudi Aramco over the weekend for Asia and US customers – typically a reflection of firmer demand. The morning also saw some reports suggesting Yemen Houthis fired several ballistic missiles and 25 armed drones on Saudi Arabia, including Aramco facilities in Jeddah, but details remain light. Aside from that, the morning’s newsflow has been on the quiet side, with the macro environment currently dictating price action. WTI Jan is back on a USD 71/bbl handle (vs low 69.50/bbl) while Brent Feb topped USD 75.00/bbl (vs low USD 73.20/bbl). In terms of bank forecasts, Citi sees a dramatic fall in energy prices from Q4 2021 to Q4 2022 averages – with Brent seen at USD 62/bbl (from USD 79/bbl) and WTI seen at USD 59/bbl (from USD 75/bbl). Over to metals, spot gold and silver move in tandem with the Buck featuring the former around USD 1,780/oz and caged below that cluster of DMAs which today sees the 50, 100 and 200 at USD 1,793/oz, USD 1,790/oz and USD 1,791/oz respectively. Elsewhere LME copper takes impetus from the broader risk appetite, with prices back north of USD 9,500/t and extending on gains, with the Chinese trade data also supportive for the base metal complex. Overnight, Dalian iron ore futures gained focus as prices were bolstered by the recent liquidity action taken by the PBoC coupled with more sanguine commentary surrounding the Chinese housing market, according to some analysts. US Event Calendar 8:30am: 3Q Unit Labor Costs, est. 8.3%, prior 8.3% 8:30am: 3Q Nonfarm Productivity, est. -4.9%, prior -5.0% 8:30am: Oct. Trade Balance, est. -$66.8b, prior -$80.9b 3pm: Oct. Consumer Credit, est. $25b, prior $29.9b DB's Jim Reid concludes the overnight wrap It’s with much trepidation that I take an hour off work this morning to visit my 4-year old twins’ nativity play. They are by far the youngest in their Reception year and given they were premature, in reality there are technically older kids in the nursery year. As such my expectations were always well managed when the parts were being doled out that they wouldn’t be competing for the blockbuster roles such as Joseph! These expectations were met as they have been cast as “presents”. So I think they have to sit there with a bow around them and try to remember some of the words in the songs they have been given to sing. Success would be for them not to have a fight mid-performance as they do most evenings when I see them. Only when you have identical twins can you witness such love and hatred displayed within the space of a few seconds. Markets have been swinging between love and hate over the last 10 days with the former winning out yesterday as investors’ concerns eased around the Omicron variant. Obviously we’re still awaiting definitive data on a number of points, but more generally the suggestions that it could be less likely to cause severe disease has injected some optimism back into markets after the recent selloffs. As a result, we saw a decent bounceback among the major equity indices on both sides of the Atlantic, an advance for oil prices following 6 successive weekly declines, and investors even moved to marginally bring forward the likely timing of central bank rate hikes. We’ll start with equities, where risk appetite only increased as the day went on, with the S&P 500 (+1.17%) posting a broad-based advance that saw over 85% of the index’s members advancing. Europe also put in a strong performance, with the STOXX 600 up +1.3%, whilst many indices saw their biggest advances in months. That included the UK’s FTSE 100 (+1.5%), Spain’s IBEX 35 (+2.4%), and Italy’s FTSE MIB (+2.2%), which, outside of last Wednesday, were the best daily performances since July. European tech shares lagged the broader rally, with the STOXX Technology index down -0.33%, though US tech shares gained steam after the European close, with the Nasdaq up +0.93%, trailing the S&P by a more modest amount. Greater optimism about the new variant proved supportive for oil prices too, with Brent crude (+4.58%) and WTI (+4.87%) posting gains after a run of 6 consecutive weekly declines, having also been supported by Saudi Arabia’s move to raise oil prices to Asia and the US in January. Oil prices are up another 1% this morning. However, there was a big decline in US natural gas futures (-11.50%) yesterday, the worst daily performance since January 2019, as the mild weather outlook has served to dampen demand. Over in sovereign bond markets there was a fresh selloff in US Treasuries, and a steepening of the yield curve, as the optimism about Omicron led investors to bring forward their expectations of future rate hikes. Yields moved higher across the curve, with those on 10yr yields up +9.1bps to 1.43%, as both real yields and inflation breakevens moved higher on the day, whilst the 2s10s curve managed to steepen +4.7bps to 79.9bps. 10yr yields are up another +1.4bps this morning. Near-term, the first Fed rate hike is again fully priced by the June FOMC meeting. Over in Europe, yields were lower, with those on 10yr bunds (-0.1bps), OATs (-0.4bps) and BTPs (-3.8bps) all declining, though the greater risk appetite was reflected in the narrowing of peripheral spreads, with the gap between Italian and Spanish yields over bunds both tightening by the close. Overnight in Asia stocks are all trading up with the Nikkei (+2.09%), Hang Seng (+1.62%), CSI (+0.51%), KOSPI (+0.47%) and Shanghai Composite (+0.12%) all stronger. China’s RRR cut yesterday is certainly helping sentiment. On the data front, China's trade balance for November came in at $71.72 bn (consensus $83.60 bn and $84.54 bn previously), lower than expected as imports grew at +31.7% year-on-year against +21.5% consensus. Exports (+22%) were slightly higher than expected. Elsewhere the Reserve Bank of Australia held its benchmark interest rate unchanged while cautioning that price pressures remain subdued in Australia compared with other economies as the RBA expects it to reach 2.5% by 2023. Our economists put out a note suggesting that if you squint, the RBA commentary was slightly hawkish though. See more here if you’d like their review. Elsewhere futures are pointing to a positive start in the US and Europe with the S&P 500 (+0.34%) and DAX (+0.38%) contracts trading in the green. Looking ahead, one of the important events today will be the scheduled video call between US President Biden and Russian President Putin. The Biden administration, in concert with European allies, is reportedly weighing whether to bring economic tools to bear against Russia in response to the recent flare up on the Ukrainian border. Measures being considered included sanctions against President Putin’s inner circle, energy producers, and banks, as well as the more drastic option of denying Russian access to US-run international payments system, SWIFT. The Ruble depreciated -0.66% against the US dollar after having appreciated +0.50% in the morning before the headlines. In terms of other developments on the pandemic, the global case count has been moving higher for 7 consecutive weeks now, and we got fresh news of tougher restrictions in New York City yesterday. They’re set to place a vaccine mandate on private sector workers from December 27, whilst indoor dining and entertainment will be requiring those aged 12 and over to be fully vaccinated, and those aged 5-11 to have one dose. Here in the UK, over 50k confirmed cases were reported yesterday once again, and the average number of cases over the last week now stands up +9% on the week before. Turning to Germany, the main news yesterday was that the Greens became the final party of the incoming traffic-light coalition to approve the negotiated agreement, with 86% of members in favour. That follows similar moves by the SPD and the FDP, and today the parties are set to formally sign the deal, with Olaf Scholz set to become chancellor tomorrow in a Bundestag vote, which will also bring an end to Chancellor Merkel’s 16-year tenure. For a run down on what to expect from the new government, our research colleagues in Germany have put together a guide on the various policy areas (link here). Staying on Germany, data also showed yesterday that factory orders fell by a much larger-than-expected -6.9% in October (vs. -0.3% expected), with the decline driven by a -13.1% fall in foreign orders, contrary to domestic orders which actually expanded +3.4%. To the day ahead now, and data highlights include German industrial production for October and the ZEW survey for December, along with the US trade balance for October. Otherwise, US President Biden and Russian President Putin will be holding a video call. Tyler Durden Tue, 12/07/2021 - 07:59.....»»

Category: worldSource: nytDec 7th, 2021

Top Research Reports for Apple, Cisco & Linde

Today's Research Daily features new research reports on 16 major stocks, including Apple Inc. (AAPL), Cisco Systems, Inc. (CSCO), and Linde plc (LIN). Friday, December 3, 2021The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Apple Inc. AAPL, Cisco Systems, Inc. CSCO, and Linde plc LIN. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Shares of Apple have outperformed the S&P 500 over the past year (+34.4% vs. +26%). The Zacks analyst believes that Apple has been benefiting from the continued momentum in the Services segment and robust performances from iPhone, iPad, Mac.Apple’s Services and Wearables businesses are expected to drive top-line growth in fiscal 2022 and beyond. AAPL’s Services portfolio has emerged as its new cash cow. Apple expects revenues for each product category to grow year-over-year, except for iPad, which is expected to decline on the back of supply shortages. Supply chain constraints due to paucity of silicon and COVID-related manufacturing disruptions remain a headwind.(You can read the full research report on Apple here >>>)Cisco shares have gained +29.7% in the year to date period against the Zacks Computer Networking industry’s gain of +27.1%. The Zacks analyst is optimistic about dominant market position, innovative prowess, product range, growth initiatives and dividend payouts. Order growth in new markets is another major positive.Healthy uptake of identity and access, advanced threat and unified threat management security solutions amid high growth in Internet traffic is likely to drive Cisco’s growth in the quarters ahead. The buyout of Acacia Communications also bodes well. Integration risks as well as stiff competition from smaller players remain headwinds, though.(You can read the full research report on Cisco here >>>)Shares of Linde have gained +7.3% in the last six months against the Zacks Oil and Gas - Field Services industry’s loss of -3.5%. The Zacks analyst believes that Linde is gaining on the back of recovering industrial gas demand at a time when industrial production is improving worldwide.With a wide range of applications for its industrial gases, Linde is making the world more productive by the day. Linde’s process gas, hydrogen, is being utilized for clean fuels, while its high-purity and specialty gases are employed to manufacture electronics. Since the third quarter last year, however, there has been a steady decline in LIN’s contractual sale of gas product backlog.(You can read the full research report on Linde here >>>)Other noteworthy reports we are featuring today include Capital One Financial Corp. COF, Exelon Corp. EXC and Keurig Dr Pepper Inc. KDP.Mark VickerySenior EditorNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>> Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>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 Exelon Corporation (EXC): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Cisco Systems, Inc. (CSCO): Free Stock Analysis Report Capital One Financial Corporation (COF): Free Stock Analysis Report Linde plc (LIN): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

JinkoSolar Announces Third Quarter 2021 Financial Results

SHANGRAO, China, Nov. 30, 2021 /PRNewswire/ -- JinkoSolar Holding Co., Ltd. ("JinkoSolar" or the "Company") (NYSE:JKS), one of the largest and most innovative solar module manufacturers in the world, today announced its unaudited financial results for the third quarter ended September 30, 2021. Third Quarter 2021 Business Highlights JinkoSolar's high-efficiency N-Type monocrystalline silicon solar cell sets new world record with highest conversion efficiency of 25.4%. Over 7GW of new cell capacity put into production in the second quarter reached full production in the third quarter, reducing cell production cost in the third quarter by more than 10% compared with the second quarter. China has strong market demand, and JinkoSolar's percentage of module shipments in the Chinese market in the third quarter doubled compared to the second quarter. JinkoSolar's competitive large-size module products accounted for nearly 50% of module shipments in the third quarter, compared with less than 20% in the first half of 2021. Third Quarter 2021 Operational and Financial Highlights Quarterly shipments were 4,993 MW (4,671 MW for solar modules, 322 MW for cells and wafers), total shipments down 4.0% sequentially, and down 2.4% year over year. Total revenues were RMB8.57 billion (US$1.33 billion), up 8.1% sequentially and down 2.3% year over year. The sequential increase was mainly attributable to an increase in the shipment of solar modules with higher selling price compared with cells and wafers. Gross profit was RMB1.30 billion (US$201.1 million), down 4.6% sequentially and down 13.3% year over year. Gross margin was 15.1%, compared with 17.1% in Q2 2021 and 17.0% in Q3 2020. Net income was RMB194.2 million (US$30.1 million), up 193.2% sequentially and up 27.3 times year over year. Non-GAAP net income was RMB15.9 million (US$2.5 million), down 94.2% sequentially and down 95.1% year over year. Basic earnings per ordinary share and diluted loss per ordinary share were RMB1.02 (US$0.16) and RMB(0.12) (US$(0.02)), respectively. This translates into basic earnings per ADS and diluted loss per ADS of RMB4.07 (US$0.63) and RMB(0.49) (US$(0.08)), respectively. Non-GAAP basic and diluted earnings per share were RMB0.08 (US$0.01) and RMB0.08 (US$0.01), respectively. Non-GAAP basic and diluted earnings per ADS were RMB0.33 (US$0.05) and RMB0.31 (US$0.05), respectively. Mr. Xiande Li, JinkoSolar's Chairman of the Board of Directors and Chief Executive Officer, commented, "the release of more efficient new cell capacity significantly reduced our cell production costs in the third quarter, partially offsetting the impact of high prices of polysilicon and other materials on production costs. Total shipments were impacted by the delay in sales revenue recognition caused by logistical issues and blockages. Logistics costs have further increased compared with the second quarter, and module prices hit a new high in almost a year. However, due to the transition to renewable energy in most regions of the world, the increase in electricity prices, financing support and other favorable policies, clients are more willing to accept higher module prices. Currently in its most severe shortage, we expect polysilicon supply will gradually return to sufficient levels starting next year, and as a result, installation demand is expected to increase significantly.  Our high-efficiency N-type monocrystalline silicon solar cell reached a maximum conversion efficiency of 25.4%, setting a world record yet again. Based on our continuous leading R&D capabilities and two years of mass production experience, we are quickly expanding N-type cell production capacity. We are preparing for approximately 16 GW of N-type cell production capacity to be operational in the first quarter of 2022, and are planning to increase our global market share by enhancing our sales and promotions of N-type products to achieve at least 50% growth in annual shipments in 2022. Our 7GW monocrystalline silicon wafer plant in Vietnam will commence production in the first quarter of 2022. After that, we will have approximately 7 GW of integrated mono wafer-cell-module manufacturing capacity overseas. A sound and diversified global industrial chain infrastructure will enable us to be more flexible in terms of order production and customer delivery, as we continue to provide integrated services to our global customers." Third Quarter 2021 Financial Results Total Revenues Total revenues in the third quarter of 2021 were RMB8.57 billion (US$1.33 billion), an increase of 8.1% from RMB7.93 billion in the second quarter of 2021 and a decrease of 2.3% from RMB8.77 billion in the third quarter of 2020. The sequential increase was mainly attributable to an increase in the shipment of solar modules, while the year-over-year decrease was mainly attributable to a decrease in the shipment of solar modules. Gross Profit and Gross Margin Gross profit in the third quarter of 2021 was RMB1.30 billion (US$201.1 million), compared with RMB1.36 billion in the second quarter of 2021 and RMB1.49 billion in the third quarter of 2020. Gross margin was 15.1% in the third quarter of 2021, compared with 17.1% in the second quarter of 2021 and 17.0% in the third quarter of 2020. The sequential and year-over-year decreases were mainly attributable to cost increases due to the rise of material prices and a decline in the average selling price of solar modules in response to the intensified market competition globally. Income from Operations and Operating Margin Income from operations in the third quarter of 2021 was RMB111.2 million (US$17.3 million), compared with RMB356.4 million in the second quarter of 2021 and RMB546.0 million in the third quarter of 2020. Operating margin was 1.3% in the third quarter of 2021, compared with 4.5% in the second quarter of 2021 and 6.2% in the third quarter of 2020. Total operating expenses in the third quarter of 2021 were RMB1.18 billion (US$183.9 million), an increase of 18.2% from RMB1.00 billion in the second quarter of 2021 and an increase of 24.9% from RMB948.9 million in the third quarter of 2020. The sequential and year-over-year increases were mainly attributable to increases in shipping costs of solar modules in the third quarter of 2021. Total operating expenses accounted for 13.8% of total revenues in the third quarter of 2021, compared to 12.6% in the second quarter of 2021 and 10.8% in the third quarter of 2020. Interest Expense, Net Net interest expense in the third quarter of 2021 was RMB165.6 million (US$25.7 million), an increase of 5.1% from RMB157.5 million in the second quarter of 2021 and an increase of 28.1% from RMB129.2 million in the third quarter of 2020. The sequential and year-over-year increases were mainly due to an increase in interest expense, as the Company's interest-bearing debts increased.  Subsidy Income Subsidy income in the third quarter of 2021 was RMB63.5 million (US$9.9 million), compared with RMB162.2 million in the second quarter of 2021 and RMB62.8 million in the third quarter of 2020. The sequential decrease was mainly attributable to a decrease in the cash receipt of subsidies from local governments in China which are non-recurring, not refundable and with no conditions. Exchange Loss and Change in Fair Value of Foreign Exchange Derivatives The Company recorded a net exchange loss (including change in fair value of foreign exchange derivatives) of RMB6.2 million (US$1.0 million) in the third quarter of 2021, compared to a net exchange loss of RMB4.4 million in the second quarter of 2021 and a net exchange loss of RMB63.9 million in the third quarter of 2020. The net exchange loss was mainly due to the exchange rate fluctuation of the US dollars against the RMB in the third quarter of 2021. Change in Fair Value of Convertible Senior Notes and Call Option The Company issued US$85.0 million of 4.5% convertible senior notes due 2024 (the "Notes") in May 2019 and has elected to measure the Notes at fair value derived by valuation model, i.e. Binomial Model. The Company recognized a gain from a change in fair value of the Notes of RMB239.0 million (US$37.1 million) in the third quarter of 2021, compared to a loss of RMB335.7 million in the second quarter of 2021 and a loss of RMB593.7 million in the third quarter of 2020. The change was primarily due to a decrease in the Company's stock price in the third quarter of 2021. Concurrent with the issuance of the Notes in May 2019, the Company entered into a call option transaction with an affiliate of Credit Suisse Securities (USA) LLC. The Company accounted for the call option transaction as freestanding derivative assets in its consolidated balance sheets, which is marked to market during each reporting period. The Company recorded a loss from a change in fair value of the call option of RMB38.2 million (US$5.9 million) in the third quarter of 2021, compared to a gain of RMB137.9 million in the second quarter of 2021 and a gain of RMB280.7 million in the third quarter of 2020. The change was primarily due to a decrease in the Company's stock price in the third quarter of 2021. The Company exercised all the remaining call option using cash settlement in the third quarter of 2021. Equity in Earnings/(loss)of Affiliated Companies The Company indirectly holds a 20% equity interest in Sweihan PV Power Company P.J.S.C, a developer and operator of solar power projects in Dubai, and accounts for its investment using the equity method. The Company also holds a 30% equity interest in Jiangsu Jinko-Tiansheng Co., Ltd, which processes and assembles PV modules as an OEM manufacturer, and accounts for its investments using the equity method. The Company recorded equity in earnings of affiliated companies of RMB13.2 million (US$2.0 million) in the third quarter of 2021, compared with a loss of RMB0.3 million in the second quarter of 2021 and a gain of RMB24.7 million in the third quarter of 2020. The gain primarily arose from interest rate swap recorded by the equity affiliate due to an increase in long-term interest rates in the third quarter of 2021. Hedge accounting was not applied for the derivative. Income Tax Expense/(Benefit) The Company recorded an income tax expense of RMB22.0 million (US$3.4 million) in the third quarter of 2021, compared with an income tax benefit of RMB6.9 million in the second quarter of 2021 and an income tax expense of RMB69.2 million in the third quarter of 2020. The sequential increase of tax expense was mainly due to additional 2020 income tax deduction for R&D costs approved by the local tax bureau in the second quarter of 2021. Net Income and Earnings/(loss) per Share Net income attributable to the Company's ordinary shareholders was RMB194.2 million (US$30.1 million) in the third quarter of 2021, compared with net income attributable to the Company's ordinary shareholders of RMB66.2 million in the second quarter of 2021 and RMB6.9 million in the third quarter of 2020. Net income attributable to non-controlling interests decreased in the third quarter of 2021 mainly attributable to lower profit generated from the Company's certain subsidiary of which non-controlling shareholders own equity interests. Basic earnings per ordinary share and diluted loss per ordinary share were RMB1.02 (US$0.16) and RMB(0.12) (US$(0.02)), respectively, during the third quarter of 2021, compared to RMB0.35 and RMB0.35, respectively, in the second quarter of 2021, and RMB0.04 and RMB(1.55), respectively, in the third quarter of 2020. As each ADS represents four ordinary shares, this translates into basic earnings per ADS and diluted loss per ADS of RMB4.07 (US$0.63) and RMB(0.49) (US$(0.08)), respectively in the third quarter of 2021; RMB1.39 and RMB1.38, respectively, in the second quarter of 2021; and RMB0.16 and RMB(6.20), respectively, in the third quarter of 2020. The difference between basic earning and diluted loss per share in the third quarter of 2021 was mainly due to the dilutive impact of convertible senior notes. Non-GAAP net income attributable to the Company's ordinary shareholders in the third quarter of 2021 was RMB15.9 million (US$2.5 million), compared with RMB274.7 million in the second quarter of 2021 and RMB321.4 million in the third quarter of 2020. Non-GAAP basic and diluted earnings per ordinary share were both RMB0.08 (US$0.01) during the third quarter of 2021; both RMB1.44 in the second quarter of 2021 and both RMB1.81 in the third quarter of 2020. This translates into non-GAAP basic and diluted earnings per ADS of RMB0.33 (US$0.05) and RMB0.31 (US$0.05), respectively, in the third quarter of 2021; RMB5.76 and RMB5.75, respectively, in the second quarter of 2021, and both RMB7.22 in the third quarter of 2020. Because of the dilutive impact of call option arrangement during the third quarter of 2020,   potential shares underlying the call option arrangement were removed from weighted average number of ordinary shares outstanding since their issuance date, and changes in income of the assumed exercise of call option, including the change in fair value of the call option, foreign exchange gain/(loss) on the call option, and the issuance costs of the call option were also recorded as the adjustment to the Company's consolidated net income to arrive at the diluted net income available to the Company's ordinary shareholders. Under that situation, the Company implemented the same denominator for both non-GAAP basic and dilutive earnings per ordinary share in the third quarter of 2020. Financial Position As of September 30, 2021, the Company had RMB7.32 billion (US$1.14 billion) in cash and cash equivalents and restricted cash, compared with RMB6.52 billion as of June 30, 2021. As of September 30, 2021, the Company's accounts receivables due from third parties were RMB4.27 billion (US$662.5 million), compared with RMB3.91 billion as of June 30, 2021. As of September 30, 2021, the Company's inventories were RMB13.47 billion (US$2.09 billion), compared with RMB9.88 billion as of June 30, 2021. As of September 30, 2021, the Company's total interest-bearing debts were RMB23.76 billion (US$3.69 billion), of which RMB438.2 million (US$68.0 million) was related to the Company's overseas downstream solar projects, compared with RMB20.15 billion, of which RMB436.5 million was related to the Company's overseas downstream solar projects as of June 30, 2021. Third Quarter 2021 Operational Highlights Solar Module, Cell and Wafer Shipments Total shipments in the third quarter of 2021 were 4,993 MW, including 4,671 MW for solar module shipments and 322 MW for cell and wafer shipments. Solar Products Production Capacity As of September 30, 2021, the Company's in-house annual mono wafer, solar cell and solar module production capacity was 31 GW, 19 GW (940 MW for N type cells) and 36 GW, respectively. Operations and Business Outlook Highlights With JinkoSolar's industry-leading N-type cell R&D capabilities and over two year's mass production experience, it is investing in N-type cells, with an expected output of about 10GW in 2022. On the one hand, it helps alleviate challenges related to the Company's insufficient cell production capacity, and on the other hand, the N-type technology greatly improves module performance. The Company recently released a brand new Tiger Neo N-type product with mass production output of up to 620W. The Company's monocrystalline silicon wafer factory in Vietnam has started construction recently and will commence production in the first quarter of 2022, after which it will have approximately 7GW of overseas integrated production capacity, from mono silicon wafers to high-efficiency cells and modules. JinkoSolar is committed to improving the supply chain worldwide and producing high-quality and efficient products to serve global customers. Fourth Quarter and Full Year 2021 Guidance The Company's business outlook is based on management's current views and estimates with respect to market conditions, production capacity, the Company's order book and the global economic environment. This outlook is subject to uncertainty on final customer demand and sale schedules. Management's views and estimates are subject to change without notice. For the fourth quarter of 2021, the Company expects total shipments to be in the range of 7.3 GW to 8.8 GW (solar module shipments to be in the range of 7 GW to 8.5 GW). Total revenue for the fourth quarter is expected to be in the range of US$1.8 billion to US$2.2 billion. Gross margin for the fourth quarter is expected to be between 13% and 16%. For full year 2021, the Company estimates total shipments (including solar modules, cells and wafers) to be in the range of 22.8 GW to 24.3 GW. Solar Products Production Capacity JinkoSolar expects its annual mono wafer, solar cell and solar module production capacity to reach 32.5 GW, 24 GW (including 940 MW N-type cells) and 45 GW, respectively, by the end of 2021. Recent Business Developments In August 2021, JinkoSolar's principal operating subsidiary, Jinko Solar Co., Ltd. signed a long-term polysilicon supply agreement with Wacker Chemie AG. In September 2021, JinkoSolar's principal operating subsidiary, Jinko Solar Co., Ltd. signed a strategic cooperation framework agreement with Contemporary Amperex Technology Co., Ltd. In September 2021, JinkoSolar announced that it is investing $500 million to build a monocrystalline ingot and wafer manufacturing facility in Quảng Ninh Province, Vietnam. In September 2021, JinkoSolar was awarded the 'Top Brand PV USA' seal by EUPD Research. In September 2021, the stock listing committee of Shanghai Stock Exchange's Sci-Tech innovation board reviewed application of Jinko Solar Co., Ltd., the principal operating subsidiary of JinkoSolar, and considered that it had met the offering, listing and disclosure requirements related to its proposed IPO. In October 2021, JinkoSolar achieved a major technical breakthrough on its N-type monocrystalline silicon solar cell, setting a new world record for the fourth time in a year with the maximum solar conversion efficiency of 25.4% for its large-size passivating contact solar cell. In October 2021, JinkoSolar won the prestigious Green World Awards for Environmental Best Practice named by the Green Organization in the global campaign to find the world's greenest countries, companies, and communities. In October 2021, JinkoSolar's Tiger and Tiger Pro module series met the carbon footprint verification standards of TÜV Rheinland Group, a leading global services provider in the testing of PV modules and components. In October 2021, JinkoSolar worked with Catholic Charities Jacksonville to provide refugees living in Jacksonville access to devices and internet in order to facilitate their English classes and better acclimate to life in America. In November 2021, JinkoSolar launched a new series of ultra-efficient 2021 Flagship Tiger Neo modules. In November 2021, JinkoSolar announced that its principal operating subsidiary, Jinko Solar Co., Ltd. plans to invest RMB450 million for equity in Sichuan Yongxiang Energy Technology Co., Ltd., a subsidiary of Tongwei Co., Ltd. (Shanghai Stock Exchange: 600438). Conference Call Information JinkoSolar's management will host an earnings conference call on Tuesday, November 30, 2021 at 7:30 a.m. U.S. Eastern Time (8:30 p.m. Beijing / Hong Kong the same day). Dial-in details for the earnings conference call are as follows: Hong Kong / International: +852 3027 6500 U.S. Toll Free: +1 855-824-5644 Passcode: 71417350# Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. A telephone replay of the call will be available 2 hours after the conclusion of the conference call through 23:59 U.S. Eastern Time, December 7, 2021. The dial-in details for the replay are as follows: International: +61 2 8325 2405 U.S.: +1 646 982 0473 Passcode: 520000271# Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of JinkoSolar's website at www.jinkosolar.com. About JinkoSolar Holding Co., Ltd. JinkoSolar (NYSE:JKS) is one of the largest and most innovative solar module manufacturers in the world. JinkoSolar distributes its solar products and sells its solutions and services to a diversified international utility, commercial and residential customer base in China, the United States, Japan, Germany, the United Kingdom, Chile, South Africa, India, Mexico, Brazil, the United Arab Emirates, Italy, Spain, France, Belgium, and other countries and regions. JinkoSolar has built a vertically integrated solar product value chain, with an integrated annual capacity of 31 GW for mono wafers, 19 GW for solar cells, and 36 GW for solar modules, as of September 30, 2021. JinkoSolar has 9 productions facilities globally, 22 overseas subsidiaries in Japan, South Korea, Vietnam, India, Turkey, Germany, Italy, Switzerland, United States, Mexico, Brazil, Chile, Australia, Portugal, Canada, Malaysia, UAE, Hong Kong, Denmark, and global sales teams in China, United Kingdom, France, Spain, Bulgaria, Greece, Ukraine, Jordan, Saudi Arabia, Tunisia, Morocco, South Africa, Costa Rica, Colombia, Panama, Kazakhstan, Malaysia, Myanmar, Sri Lanka, Thailand, Vietnam, Poland and Argentina, as of September 30, 2021. To find out more, please see: www.jinkosolar.com Use of Non-GAAP Financial Measures To supplement its consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), JinkoSolar uses certain non-GAAP financial measures including, non-GAAP net income, non-GAAP earnings per Share, and non-GAAP earnings per ADS, which are adjusted from the comparable GAAP results to exclude certain expenses or incremental ordinary shares relating to share-based compensation, convertible senior notes and call option: Non-GAAP net income is adjusted to exclude the expenses relating to issuance cost of convertible senior notes, change in fair value of convertible senior notes and call option, interest expenses of convertible senior notes and call option, exchange (gain)/loss on the convertible senior notes and call option, and stock-based compensation (benefit)/expense; given these Non-GAAP net income adjustments above are either related to the Company or its subsidiaries incorporated in Cayman Islands, which are not subject to tax exposures, or related to those subsidiaries with tax loss positions which result in no tax impacts, therefore no tax adjustment is needed in conjunction with these Non-GAAP net income adjustments; and Non-GAAP earnings per share and non-GAAP earnings per ADS are adjusted to exclude the expenses relating to issuance cost of convertible senior notes, change in fair value of convertible senior notes and call option, interest expenses of convertible senior notes and call option, exchange gain on the convertible senior notes and call option, and stock-based compensation. As the Non-GAAP net income is adjusted to exclude the change in fair value of call option, the dilutive impact of call option, if any, is also excluded from the denominator for the calculation of Non-GAAP earnings per share and non-GAAP earnings per ADS. The Company believes that the use of non-GAAP information is useful for analysts and investors to evaluate JinkoSolar's current and future performances based on a more meaningful comparison of net income and diluted net income per ADS when compared with its peers and historical results from prior periods. These measures are not intended to represent or substitute numbers as measured under GAAP. The submission of non-GAAP numbers is voluntary and should be reviewed together with GAAP results. Currency Convenience Translation The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the readers, is based on the noon buying rate in the city of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of September 30, 2021, which was RMB6.4434 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized, or settled into U.S. dollars at that rate or any other rate. The percentages stated in this press release are calculated based on Renminbi. Safe-Harbor Statement This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends, "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and the Company's operations and business outlook, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in JinkoSolar's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. For investor and media inquiries, please contact: In China:Ms. Stella WangJinkoSolar Holding Co., Ltd.Tel: +86 21-5180-8777 ext.7806Email: ir@jinkosolar.com Rene VanguestaineChristensenTel: +86 178 1749 0483Email: rvanguestaine@ChristensenIR.com In the U.S.:Ms. Linda BergkampChristensenTel: +1-480-614-3004Email: lbergkamp@ChristensenIR.com       JINKOSOLAR HOLDING CO., LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except ADS and Share data) For the quarter ended For the nine months ended      Sep 30, 2020 Jun 30, 2021 Sep 30, 2021.....»»

Category: earningsSource: benzingaNov 30th, 2021