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5 Stocks to Deflect Delta Variant Curveball From Orthopedic Space

OrthoPediatrics (KIDS), Orthofix (OFIX), Zimmer Biomet (ZBH), Stryker (SYK) and SeaSpine (SPNE) are expected to hold ground despite a challenging business climate. Orthopedic device, an integral part of MedTech, has been on a gradual rebound following a pandemic-battered 2020. The opening up of the economy following the lifting of strict social-distancing norms and increased hospital visits with rush toward opting for earlier-deferred non-COVID procedures were vastly seen after the widespread vaccination drives. The orthopedic device subsector, which covers orthopedic implants, minimally-invasive surgeries and robotic surgeries, had been witnessing robust performances over the past few months after a pandemic-led hiatus in elective procedures.However, the emergence of the highly-contagious Delta variant of coronavirus seems to again derail the growth trajectory of elective orthopedic surgeries.Orthopedics’ SnapshotAfter an impressive performance over the past few months where the key orthopedic players recorded improved patient volumes on the back of pent-up demand, the potential concerns over the emergence of new variants looms large. With increasing cases of infections with the Delta strain, patients are increasingly deferring their elective orthopedic surgeries as they fear getting infected with the latest potentially vaccine-resistant strain.Not only patients, even hospitals are increasingly attending to COVID-19 patients, thereby pushing other admissions to the back. This is also likely to hamper sales of orthopedic implants of key orthopedic MedTech players by leading to lower procedure volumes.Aggravating the fear of the Delta impact, key MedTech player NuVasive, Inc. NUVA has voiced concerns. The company, during its second-quarter 2021 earnings call, confirmed that patient sentiment is a major factor that will determine elective procedure deferrals.However, given the fact that a meaningful portion of this orthopedic sub-sector comprises essential, nondeferrable surgeries, the adverse business impacts are likely to be mitigated to some extent. Particularly, spine surgeries and trauma settings are expected to fetch business even amid the difficult pandemic situation. Market watchers are of the view that enabling technologies within orthopedic and spine are going to steal the limelight amid the difficult financial situation of the hospitals in the coming months.Per a report published on Fortune Business Insights, the global orthopedic devices market size was worth $53.44 billion in 2019 and is anticipated to reach $68.51 billion by 2027, at a CAGR of 6.6%. Factors like rising cases of osteoporosis and musculoskeletal diseases, increasing incidents of sports and traumatic injuries, and an expanding elderly population are expected to drive the market.5 Stocks to Focus onHere we have listed five orthopedic stocks that have an upside growth potential despite the looming concern over surging infection rates. Investors can turn their attention to these stocks, which can turn out to be prudent investment choices for long-term benefits.OrthoPediatrics Corp. KIDS, in August, announced the continuation of its navigation partnership with Mighty Oak Medical, Inc., thereby extending its current five-year deal by another five years till August 2027. This Zacks Rank #2 (Buy) company, which has been the exclusive distributor of Mighty Oak Medical’s FIREFLY Technology in children’s hospitals across the United States, will be able to maintain that exclusivity through August 2027 via the extended agreement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchIts expected earnings growth rate for 2022 is pegged at 45.6%. The company is likely to report 2021 revenue growth of 39.6%. Over the past year, the stock has gained 59.2% compared with the industry’s 21.8% rise.Global medical device company focused on spine and orthopedics, Orthofix Medical Inc. OFIX, announced the full market launch of the Opus Mg Set osteoconductive scaffold, a synthetic magnesium-based bone void filler for orthopedic procedures, this month.Image Source: Zacks Investment ResearchIts expected earnings growth rate for 2022 is pegged at 58.9%. The company is expected to report 2021 revenue growth of 16.1%. Over the past year, this Zacks Rank #2 company has gained 37.4% compared with the industry’s 21.8% rise.Renowned MedTech player Zimmer Biomet Holdings, Inc. ZBH along with Canary Medical (a medical data company) announced the FDA’s De Novo classification grant and authorization to market the tibial extension for Persona IQ, the world's first and only smart knee cleared by the FDA for total knee replacement surgery, in August.Image Source: Zacks Investment ResearchIts long-term expected earnings growth rate is pegged at 8.8%. The company is expected to report 2021 revenue growth of 15.4%. Over the past year, this Zacks Rank #3 (Hold) company has gained 10.3% compared with the sector’s 0.2% rise.Stryker Corporation SYK, well-known medical technology company, announced robust second-quarter 2021 results along with strong segmental performance in July.Image Source: Zacks Investment ResearchIts long-term expected earnings growth rate is pegged at 9.6%. This Zacks Rank #3 company is expected to report 2021 revenue growth of 20.7%. Over the past year, the stock has gained 36.5% compared with the industry’s 14.9% rise.Renowned medical technology company, SeaSpine Holdings Corporation SPNE, entered into a distribution agreement with OrthoPediatrics this month to exclusively distribute its 7D Surgical FLASH Navigation platform for pediatric applications.Image Source: Zacks Investment ResearchIts expected earnings growth rate for 2022 is pegged at 14.4%. The company is likely to report 2021 revenue growth of 31.1%. Over the past year, this Zacks Rank #3 company has gained 14.8% compared with the sector’s 0.2% rise. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stryker Corporation (SYK): Free Stock Analysis Report ORTHOFIX MEDICAL INC. (OFIX): Free Stock Analysis Report NuVasive, Inc. (NUVA): Free Stock Analysis Report Zimmer Biomet Holdings, Inc. (ZBH): Free Stock Analysis Report SeaSpine Holdings Corporation (SPNE): Free Stock Analysis Report OrthoPediatrics Corp. (KIDS): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksSep 23rd, 2021

Nu Skin"s (NUS) Solid Innovations Aid, Pandemic-Led Hurdles Hurt

Nu Skin (NUS) is benefiting from effective product launches. However, the company is battling challenges stemming from the spread of the delta variant across several markets. Nu Skin Enterprises, Inc. NUS is benefiting from strategic growth efforts like innovation and effective product launches. The company’s focus on strengthening sales leaders and expanding the customer base bodes well. That being said, it is battling challenges caused by the spread of the delta variant across several markets.Let’s discuss.Innovations Fueling GrowthWith the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. The company’s long-term strategies stand on three key pillars — Products, Programs and Platforms. Management is encouraged about the company’s launch of beauty device system — ageLOC Boost — in some markets in the first half of the year. Management is also impressed with the rollout of Nutricentials Bioadaptives, a customizable skincare line targeted at millennials and Gen Z.In a recent update, management highlighted that it is impressed with the launch of Collagen+ in the United States amid pandemic-inflicted disruptions. The company’s Tencent digital tools’ introduction across China, during the third quarter of 2021, bodes well. Management is optimistic about its upcoming product roll outs. It expects to introduce more social commerce tools by the end of 2021 and into 2022. Nu Skin expects 2021 revenues to improve modestly on a year-over-year basis.Other Growth EffortsNu Skin sells and distributes products through a network of sales leaders and consumer groups. The company is focused on empowering them through product launches and engaging technology platforms among other initiatives. It has been conducting a number of promotional seminars online. Nu Skin rolled out its Velocity sales compensation plan as well as enJoy rewards program in the past three years. These programs are doing well and boosting growth in sales leaders and customers. In the second quarter, sales leaders were up 15% year over year to 64,228 on new product introductions and better leader qualification programs.Management is transforming its business with the help of robust social commerce and distinctive person-to-person affiliate marketing channel to create more brand awareness as well as acquire customers at a higher rate. The company’s focus on building a robust digital ecosystem to enhance customer attraction bodes well.Several other companies in the cosmetic space have been benefiting from focus on growing its online business. Players like Helen of Troy Limited HELE, Coty Inc. COTY and The Estee Lauder Companies Inc. EL are gaining from strong online trends.Coming back to Nu Skin, management is on track to roll out its personal recommendation app, Vera, globally. The rollout of its personal product storefront, My Site, bodes well. Further, management is on track to introduce its digital ecosystem, Empower Me. The digital ecosystem will offer personalized beauty and wellness solutions via interactive as well as engaging digital experiences.Pandemic-led HurdlesNu Skin recently lowered third-quarter 2021 revenue guidance to the band of $637-$642 million. The company had earlier guided quarterly revenues in the band of $700-$730 million. The company’s revenues came in at $703.3 million in the same quarter last year.Management stated that quarterly revenues were hurt by challenges stemming from the disruptions caused by the delta variant across several markets. Unexpected government-imposed restrictions disrupted the sale and distribution of the company’s products, especially across the Mainland China and Southeast Asia regions. Nu Skin also encountered disturbances in its promotional activities including incentive trips and performance of local expos across various markets.Although the aforementioned upsides have been aiding Nu Skin’s performance, the pandemic-induced hurdles cannot be ignored. 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. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a 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 The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report Helen of Troy Limited (HELE): Free Stock Analysis Report Nu Skin Enterprises, Inc. (NUS): Free Stock Analysis Report Coty (COTY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 13th, 2021

Nu Skin (NUS) Lowers Q3 Revenue View Amid Pandemic-Led Hurdles

Nu Skin (NUS) expects Q3 revenues in the band of $637-$642 million, lower than the previous range. Challenges caused by the delta variant across several markets are a downside. Nu Skin Enterprises, Inc. NUS seems to be in a tight spot, as it announced third-quarter 2021 revenue guidance in the band of $637-$642 million. The projection is lower than the earlier-anticipated range. The beauty and wellness solutions provider had earlier guided quarterly revenues in the band of $700-$730 million. The company’s revenues came in at $703.3 million in the same quarter last year.Management stated that quarterly revenues bore the brunt of challenges stemming from the disruptions caused by the delta variant across several markets. Unexpected government-imposed restrictions disrupted the sale and distribution of the company’s products, especially across the Mainland China and Southeast Asia regions. Nu Skin also encountered disturbances in its promotional activities including incentive trips and performance of local expos across various markets.Image Source: Zacks Investment ResearchThat being said, management is impressed with the launch of Collagen+ in the United States amid pandemic-inflicted disruptions. The company’s Tencent digital tools’ introduction across China, during the third quarter, bodes well. Management is optimistic about its upcoming product roll outs. It expects to introduce more social commerce tools by the end of 2021 and into 2022. Incidentally, the company expects 2021 revenues to improve modestly on a year-over-year basis.What Else Should You Know?With the help of advanced technology and well-strategized product programs, Nu Skin tries to capture greater market share and maintain growth momentum. The company’s long-term strategies stand on three key pillars — Products, Programs and Platforms. Management is encouraged about the company’s launch of beauty device system — ageLOC Boost — in some markets in the first half of the year. Management is also impressed with the rollout of Nutricentials Bioadaptives — a customizable skincare line targeted toward the millennials and Gen Z. The company plans to introduce a key Pharmanex innovation — ageLOC Meta — a metabolic health supplement. Nu Skin hopes to start introducing connected devices in 2022. This will accelerate personalization and enhance customers’ experience further.Nu Skin, which shares space with Coty Inc. COTY, sells and distributes products through a network of sales leaders and consumer group. The company is focused on empowering them through product launches and engaging technology platforms among other initiatives. Management is transforming its business with the help of robust social commerce and distinctive person-to-person affiliate marketing channel to create more brand awareness as well as acquire customers at a higher rate. The company’s focus on building a robust digital ecosystem to enhance customer attraction bodes well.The Zacks Rank #3 (Hold) company’s shares have declined 25.6% so far this year against the industry’s 7.1% growth.Top 2 Cosmetics Pickse.l.f. Beauty, Inc. ELF, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 48.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Helen of Troy Limited HELE, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 28.2%, on average. 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 Helen of Troy Limited (HELE): Free Stock Analysis Report Nu Skin Enterprises, Inc. (NUS): Free Stock Analysis Report Coty Inc. (COTY): Free Stock Analysis Report e.l.f. Beauty Inc. (ELF): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksOct 6th, 2021

3 Great Blue-Chip Stocks to Buy at Discounts in October and Hold

Here are three blue-chip stocks from totally different industries investors might want to consider buying at discounts in October to anchor their portfolios for years to come... Stocks tumbled to start the final week of the third quarter and continued to fall Thursday in what’s been an up and down period. Wall Street’s attention remains on the Fed and what’s next for the U.S. economy as supply chain setbacks and the delta variant disrupt what was a booming comeback.Economists and big Wall Street banks have lowered their 2021 GDP forecasts, citing supply chain logjams, rising prices, and the delta variant’s impact on sectors such as travel and leisure. These impacts are real, but the longer-term bullish case remains. For instance, August retail sales were surprisingly solid, highlighting resilience heading into the holidays.The overall S&P 500 earnings and margin outlook is still strong. Plus, even when the Fed raises rates, we could still be years away from a return to pre-financial crisis levels. It’s worth stressing that the 10-year U.S. Treasury yield has rarely and barely moved above 3% in the last decade and with 2% or higher inflation, Wall Street will likely continue chasing returns in equities (also read: Previewing the Q3 Earnings Season).The S&P 500 has climbed 16% in 2021 and there could certainly be more selling on the horizon, even though the benchmark index is currently down around 5% from its early September records. That might sound scary, but selling is a part of well-functioning markets (see nearby chart).Timing the market is difficult and long-term investors are often best served buying strong stocks whenever there’s a pullback, even if there is more selling or volatility ahead. Given this backdrop, here are three blue-chip stocks from totally different industries investors might want to consider buying at discounts in October to anchor their portfolios for years to come…Image Source: Zacks Investment ResearchAdobe ADBEAdobe created the PDF and went public in the mid-1980s. These days it’s a cloud software powerhouse, with a portfolio full of the most important creative and design software on the market. The firm’s subscription-based offerings include Photoshop, InDesign, Premiere, and newer software geared to the digital media age.ADBE’s subscription-based model helps create stable growth and its creative cloud suite is invaluable to countless businesses, schools, and creatives. The company also boosted its business-focused portfolio to include e-signature, documents, marketing, and more. Adobe’s diversified and relatively unique solutions provide a sturdy moat in a crowded and sometimes redundant SaaS space.Adobe’s FY20 revenue climbed 15% and it topped our Q3 estimates on Sept. 21, with sales and adjusted earnings both up around 22%. Zacks estimates call for its revenue to surge 22.5% this year and jump another 15% higher to $18.2 billion in FY22 and extend its streak of around 15% or stronger top-line growth to eight years running. Meanwhile, its adjusted earnings are expected to climb 23% and 14%, respectively.ADBE outclimbed Microsoft MSFT and Apple AAPL over the last five years, up 430%. The stock has cooled off in the last year to lag well behind the benchmark and recent profiting-taking around earnings—and the larger downturn—sets up an enticing buying opportunity. Adobe is down 15% from its records and its quick drop pushed it from overbought RSI levels (70 or higher) in early September to oversold (30 or under) at 25.Adobe lands a Zacks Rank #3 (Hold) right now and Wall Street is extremely high on the stock, with 18 of the 19 brokerage recommendations Zacks has resting at “Strong Buys.” The company also continues to repurchase its stock and its subscription software offerings aren’t going out of style anytime soon.Caterpillar CATAlong with big tech, diversification and dividends are key aspects to any portfolio. Caterpillar fits the bill and it’s a straightforward way to play economic growth, including continued infrastructure spending. CAT and its iconic yellow machines are synonymous with every corner of construction. The company is also plugged into various resource industries through mining equipment and more, as well the energy and transportation sectors.Along with the huge equipment the average person might see on a daily basis, Caterpillar produces everything from marine diesel engines to gas generators. The Illinois-based firm in recent years has also introduced a services segment to help smooth the sometimes-bumpy road caused by economic boom and bust cycles.CAT is also rolling out IoT-connected machines that enable customers to know when repairs and spare parts are needed for various equipment that can cost millions of dollars. And Caterpillar’s executive team is prepared to embark on the massive energy transition in the U.S. and elsewhere.CAT began to break out of a several-year slump after the market hit its coronavirus lows with shares now up 60% in the past two years to easily outpace its industry. Luckily, it has pulled back after it got overheated following a long, post-election run. The stock now trades 20% below its May records and hovers close to oversold RSI levels at 36.CAT is trading at a 30% discount to its own year-long median at 17.2X forward earnings, which marks value vs. its industry. Caterpillar is also a dividend aristocrat and its 2.30% yield tops the 30-year Treasury’s roughly 2.1% and its industry’s 1% average.Caterpillar currently lands a Zacks Rank #3 (Hold), alongside “B” grades for Value and Growth in our Style Scores system and it returns value to shareholders through buybacks.Zacks estimates call for CAT’s adjusted FY21 earnings to skyrocketed 54% on 22% higher revenue. The industrial power is then projected to follow up this strong showing with another 19% earnings growth and 12% strong sales that would see it pull in around $57 billion. The company is set to report its Q3 financial results on Oct. 28.Walmart WMTWalmart posted a banner year in 2020 (FY21), with sales up 7% and comps 9% higher. The retail giant’s e-commerce revenue skyrocketed 80%, driven by beefed-up delivery and pick-up options. WMT also last year launched its subscription service dubbed Walmart+ to compete directly against Amazon AMZN Prime. The service costs $98 a year and offers unlimited free deliveries, discounts on fuel, access to new-age in-store checkout offerings, and more.On top of that, etail titan has expanded its customer base through diversification, including teaming up with secondhand e-commerce clothing firm ThredUp, partnering with Shopify SHOP to bring more small businesses to its own third-party marketplace, and more.Walmart’s digital advertising business is also on track to be a multi-billion-dollar-a-year segment. WMT is set to improve its financial services offerings and eventually roll out telehealth services around the country to complement its in-person Walmart Health centers.Despite coming up against its best performance in years, Zacks estimates call for WMT’s revenue to climb another 1% this year and 2.2% higher next year to reach $578 billion. Plus, its adjusted earnings are projected to jump 16% and 5%, respectively.Investors should also note that analysts have raised their EPS estimates for the stock recently and it’s crushed our bottom-line estimates in the past two periods. This positivity helps Walmart land a Zacks Rank #2 (Buy) right now, alongside its overall “A” VGM grade.The firm’s Retail – Supermarkets space is in the top 17% of over 250 Zacks industries and Wall Street analyst are largely high on the stock. And its 1.59% dividend yield tops the recently-rising 10-year U.S. Treasury.Like its peers on the list, Walmart stock has fallen recently, down over 6% in the past month and nearly 10% from its records. The recent selling sent it into oversold RSI levels at 26. Therefore, now could be a solid entry point for the stock that’s climbed 100% in the past five years to nearly double its industry. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 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 Amazon.com, Inc. (AMZN): Get Free Report Apple Inc. (AAPL): Get Free Report Microsoft Corporation (MSFT): Get Free Report Caterpillar Inc. (CAT): Get Free Report Walmart Inc. (WMT): Get Free Report Adobe Inc. (ADBE): Get Free Report Shopify Inc. (SHOP): Get Free Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 30th, 2021

3 Top Retail Stocks to Buy Ahead of the Holidays and Hold

Let's look at 3 highly-ranked retail stocks that investors might want to consider buying now for the holiday season and holding... Today’s episode of Full Court Finance at Zacks dives into where the market stands heading into the holiday shopping season, following another big pullback Tuesday. The focus then shifts to three highly-ranked retail stocks that investors might want to consider buying now and holding.Stocks tumbled Tuesday, with the S&P 500 down 1.8%, the Nasdaq 2.5% lower, and the Dow off 1.4% through early afternoon trading. The sharp drop marked the S&P 500’s second straight day of losses as Wall Street focuses on what’s next for the Fed. Meanwhile, bond yields have climbed to near three-month highs, with the 10-year U.S. Treasury at around 1.52%, up from the 1.18% it touched in early August—bond yields rise as prices fallThe recent selling comes after the Fed signaled last week that it could start to slowly reverse its pandemic stimulus, or massive bond buying program as soon as November. Meanwhile, the central bank said it could start to raise its interest rates sometime next year—higher yields make growth tech stocks less attractive.Stocks could remain shaky in the fall and winter, and some Wall Street analysts think the U.S. economic comeback already peaked. Others cite cooling earnings revisions, rising prices, and global supply chain setbacks as reasons to worry.But it is worth noting that even when the Fed starts to raise its interest rates, they will likely continue to favor stocks. For example, the 10-year U.S. Treasury yield has rarely and barely moved above 3% in the last decade, and with higher than 2% inflation, Wall Street will likely continue chasing returns in equities.The market was also due for a pullback or even a correction (10% move lower from its highs) given the massive 2021 run. In fact, traders and analysts have been calling for a downturn for months and when it does come it will be healthy.Still, long-term investors should try to stay relatively exposed to the market at all times. And let’s remember the overall earnings picture remains strong and the margins outlook for 2022 and 2023 suggests inflation could be somewhat transitory. On top of that, August retail sales were surprisingly solid, highlighting economic resilience in the face of delta variant worries.Given this backdrop, investors might want to consider adding strong retail stocks poised to benefit from holiday season spending and grow for years, within different aspects of the market. The first stock up is high-end cooler and drinkware giant Yeti YETI that’s carved out a niche within a group of up-and-coming retailers like Lululemon LULU and others.Meanwhile, Best Buy BBY has outpaced Walmart WMT over the last five years and its dividend yield is impressive. And, of course, it’s prepared to gain from the booming consumer electronics space that includes giants like Apple AAPL and new standouts such as Sonos SONO.The last stock up is mattress power Tempur Sealy International, Inc. TPX, which has benefited from the soaring housing market and home improvement-style sales. 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 Apple Inc. (AAPL): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Best Buy Co., Inc. (BBY): Free Stock Analysis Report lululemon athletica inc. (LULU): Free Stock Analysis Report Tempur Sealy International, Inc. (TPX): Free Stock Analysis Report Sonos, Inc. (SONO): Free Stock Analysis Report YETI Holdings, Inc. (YETI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 29th, 2021

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

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

Category: blogSource: zerohedgeSep 24th, 2021

Stocks Up for the Week After Soaring Over 2% in 2 Days

Stocks Up for the Week After Soaring Over 2% in 2 Days Not only did yesterday’s post-Fed rally continue on Thursday, but it also picked up steam and left the major indices with a chance for their first positive weekly performance since the beginning of September. The Dow surged by 1.48% (or about 506 points) to 34,764.82, while the S&P jumped 1.21% to 4448.98. The NASDAQ improved 1.04% (or around 155 points) to 15,052.24. All of these indices are now up more than 2% in the past 2 days. We’re enjoying the first real rally for stocks during this difficult month of September. In fact, it’s the first time the major indices all advanced by more than 1% since July 20. And now stocks are in striking distance of snapping a two-week slump with a solid performance on Friday. (The Dow has actually been in the red for three straight weeks.) Big moves after a Fed statement are normal… and sometimes this action goes in the oppositive direction as the day before. However, investors are obviously still feeling pretty good about what they heard yesterday. Basically, the stimulus policies that helped us survive the pandemic will stay put for now. However, we’re growing closer to scaling back the asset purchase program now that the Fed’s inflation and employment mandates are nearly met. We’ll most likely get an announcement in the next Fed meeting before the end of the year. “Despite the more hawkish tone from Fed Chair Powell yesterday afternoon, it seemed to be what the markets wanted to hear,” said Dan Laboe in Headline Trader. “As I have said in previous commentaries, a tapering timetable from the Fed now comes as a relief due to its implications on our economic health.” In a nutshell, the economic recovery is still moving forward despite the delta variant, and the progress is so substantial that it’s time to start thinking about throwing the crutches away. The Evergrande situation continues to be a potential problem, as China’s largest property developer remains precariously close to defaulting after taking on a debt load of approximately $300 billion. The company resolved a $36 million interest payment yesterday, which allowed for some breathing room on Thursday. But Evergrande is still in trouble as investors wonder if the Chinese government will let it fail or not. We’ll be watching this story with great interest in the days ahead. We’ll also be keeping a close eye on Washington here at home as it attempts to stop a government shutdown by raising the debt ceiling. The jobless claims report on Thursday was a bit of a disappointment, but fortunately it didn’t get much attention considering all the other news. The print came to 351,000 claims last week, which was more than expectations of 320K and the previous week’s 335K. It would be quite a feat for stocks to finish this week in the green after such a rough start on Monday. Let’s see what happens tomorrow... Today's Portfolio Highlights: Technology Innovators: The market is heating up after a cold start to September, so Brian decided to turn up the temperature in this portfolio by adding Thermon Group Holding (THR). This Zacks Rank #2 (Buy) is engaged in thermal solutions, known as heat tracing, for process industries such as energy, chemical processing and power generation. The editor thinks that this company, which has maintained profitability throughout the last year, is poised to turn around and head back to recent highs. THR saw topline growth of 25% in the most recent quarter while margins have advanced to 5.9% from 3.7%, which could potentially boost EPS moving forward. Read the full write-up for more on this new buy and get ready for two additions next week as Brian works to get the portfolio fully invested with 15 names. Home Run Investor: If you want to get more aggressive in your portfolio (as Brian wants to do with the market on the rise), then the chip space is a good place to make that happen. The editor bought again on Thursday by picking up Camtek (CAMT), which makes automatic optical inspection systems for several industries, including semiconductor manufacturing & packaging. The company has beaten the Zacks Consensus Estimate three times and matched once over the past four quarters, while rising earnings estimates gave CAMT a Zacks Rank #2 (Buy) status. Meanwhile, Brian also sold defensive pick BellRing Brands (BRBR) for a slight loss. See the complete commentary for more on all of today’s action. Stocks Under $10: The staffing business is booming right now, which is why Brian added RCM Technologies (RCMT) over a week ago. The stock is still in the red since being picked up on September 14, but things may be about to change. The stock was the best performer among all ZU names on Thursday with a surge of nearly 14%. Remember, the service’s biggest winner is staffing firm Cross Country Health (CCRN), which has soared 157% in ten months. See You Friday, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 24th, 2021

Mixed Session as Fed, Earnings Compete For Market’s Attention

Mixed Session as Fed, Earnings Compete For Market’s Attention We’re in the thick of big tech earnings right now and also had to deal with a Fed statement on Wednesday, so it’s no surprise that today’s session saw an indecisive, choppy and ultimately mixed performance. The NASDAQ, which plunged over 1.2% yesterday, rebounded by 0.70% (or about 102 points) to 14,762.58. The S&P pretty much broke even, though it was technically down by 0.02% to 4400.64. The Dow slipped 0.36% (or about 127 points) to 34,930.93. The indices were at record highs on Monday with a five-day winning streak, before pulling back on Tuesday. The major news today was the Fed statement after its two-day policy meeting. For the most part, Chair Jerome Powell stayed dovish, admitting that the economy is getting stronger but is still a ways off from the goals that would require a change in policy. They’re not too concerned about the delta variant and will remain patient for now. In other words, it’s just what the market wanted to hear. “Powell did a great job at telling the market to expect tapering while at the same time saying it is not imminent,” said Dan Laboe in Headline Trader. “He wants the market to have fully discounted or even over discounted the Fed's tapering plan before it's announced. Powell has proven an exceptional ability to provide smooth monetary lift-off, with no shocks to any asset class.” Meanwhile, this solid earnings season continues, even if the market remains stubborn and refuses to reward strong results. Last night, Alphabet (GOOGL), Microsoft (MSFT) and Apple (AAPL) each reported impressive quarterly results that beat on both the top and bottom lines by double digits. GOOGL was up more than 3% on Wednesday, but the other two were still in the red. AAPL was down more than 1%. The FAANG caravan continued on Wednesday with social media pioneer Facebook (FB) reporting after the close. Its second-quarter results continued the above-mentioned trend, as earnings beat the Zacks Consensus Estimate by 19% while revenues soared 56%. However, it warned that growth could slow in the quarters ahead. Shares of FB are down nearly 4% afterhours, as of this writing. The final FAANG of the season comes to the plate tomorrow when e-commerce giant Amazon (AMZN) reports after the bell. Other names scheduled for tomorrow include Mastercard (MA), Comcast (CMCSA), Merck (MRK), T-Mobile (TMUS) and hundreds more. Today's Portfolio Highlights: Options Trader: The premium for the October 105.00 Call in Floor & Décor (FND) has doubled, so you know what that means. It’s time for Kevin to pull profits and reposition into a new option with the original dollars committed. Therefore, he sold to close the Oct 105.00 for a nearly 128% return and then bought to open an October 120.00 Call in FND. Now the principal is protected, while the position can continue making profits. Meanwhile, the editor also bought to open a November 120.00 Call in Akamai Technologies (AKAM), a leading global services provider for accelerating content and business processes online. The company has a fantastic history of beating the Zacks Consensus Estimate, which it will likely do again when it reports on August 3. Kevin thinks the stock is attempting to break out of a 2-month long base... and maybe even a larger 12-month base. Read the full write-up for more specifics on all of today’s moves.   TAZR Trader: Sales are just beginning to grow at Luminar Technologies (LAZR), a provider of light detection and ranging (LIDAR) technologies for autonomous vehicle platforms. Basically, these sensors help self-driving cars gain a three-dimensional view of the road by boomeranging lasers from all directions. The technology will be standard equipment on the fully electric Volvo sedan due out next year. This Zacks Rank #2 (Buy) also made a key acquisition by buying OptoGration, a chip design partner and manufacturer that’s a key part of its supply chain. Kevin started a small 5% position in LAZR on Wednesday. Read the full write-up for a lot more on this new addition. Home Run Investor: The portfolio filled an empty spot on Wednesday by adding Open Lending Corporation (LPRO), which ensures profitable auto loan portfolios for financial institutions. More specifically, it offers loan analytics, risk-based pricing, risk modeling and default insurance. This Zacks Rank #2 (Buy) had 152% growth in the most recent quarter, which means it’s on track for nearly 100% growth this year. Analysts expect 37% growth next year. Brian believes that small improvements in gross margins and operating margins would have a significant impact on EPS moving forward. Read the complete commentary for more on today’s addition. Surprise Trader: Exposure to the chip space during this shortage sounds like a good idea to Dave, which is why he added Veeco Instruments (VECO) on Wednesday. This Zacks Rank #2 (Buy) is engaged in the design, development, manufacture and support of thin film process equipment, which are primarily sold to make electronic devices. The company has beaten the Zacks Consensus Estimate in 16 of the last 17 quarters. The most recent surprise was 13.6%. Now it has a positive Earnings ESP for the quarter coming after the bell on Tuesday, August 3. The editor added VECO with a 12.5% allocation today, while also selling NextEra Energy (NEP) for a more than 4% return in just a little over a week. The complete commentary has more on today’s action. Healthcare Innovators: The portfolio re-added two names on Wednesday that had been big winners in the past. Guardant Health (GH) is a premier oncology diagnostics company that has formed a nice support base while we wait for some important trial data. Meanwhile, Natera (NTRA) is a major player in non-invasive prenatal screening that Kevin thinks has more upside than downside after a strong quarterly report and successful secondary. This service cashed in a more than 83% profit in GH back in March and approximately 40% in NTRA back in August 2020. The editor is looking for more success in the future. Make sure to read the complete commentary for price targets on these buys. And one more thing, Kevin also sold Alnylam Pharmaceuticals (ALNY) for more than 28% in a little over 13 months. Marijuana Innovators: It was a good day for marijuana stocks, which explains why this portfolio had two double-digit winners on Wednesday. The best performer was easily Tilray (TLRY) after soaring nearly 26% in the session even though its fiscal fourth quarter results fell short of expectations. This result marked the first report since its merger with Aphria closed in May. TLRY is the biggest winner in the portfolio right now with a surge of nearly 190% since being added in July 2020. In other news, Organigram Holdings (OGI) also made the Top 5 today by climbing just under 11%. Until Tomorrow, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P Rises More Than 2% in July

S&P Rises More Than 2% in July The final week of July was a bit of a dud, but the month as a whole was very solid for all the major indices as they fought through ongoing inflation concerns to each gain by well over 1%. The S&P was by far the biggest winner with a rise of 2.3% in July, which pretty much equaled its June performance and marked the sixth straight positive month. The Dow rose 1.3% and the NASDAQ advanced 1.2%, which is a rare bit of agreement between two indices that often go their separate ways during this recovery. For instance, the Dow was down 0.8% in June while the NASDAQ soared over 5%. It was certainly a month of extremes. We saw numerous record highs, but also growing inflation worries and the rise of the delta variant. Those two issues led to the worst single-day performance of the Dow this year. The index plunged nearly 2.1% (or about 725 points) on Monday, July 19… but it finished that week with a gain of 1%! The second half of July also included earnings season, which has been solid thus far despite some high-profile disappointments. According to our Director of Research Sheraz Mian, the nearly 60% of S&P members that have already reported beat earnings expectations by 89.2% and topped revenue forecasts by a record 87.5%. Make sure to read his new Earnings Preview article titled: “Is Big Tech Growth Really Decelerating?” Of course, it’s really hard to impress this market. Oftentimes, it focuses more on the misses, especially when it’s a leader like Amazon (AMZN). Last night after the close, the retail giant reported earnings that beat the Zacks Consensus Estimate by nearly 24%... but it also missed the revenue forecast and offered a weak Q3 guidance. Shares dropped more than 7.5%. That report took a toll on Friday’s session, along with other sharp drops like in Pinterest (PINS, -18.2%). As a result, the NASDAQ was down 0.71% (or about 105 points) today to 14,672.68 and dropped 1.1% for the week. Meanwhile, the S&P slipped 0.54% to 4395.26 and the Dow was off 0.42% (or almost 150 points) to 34,935.47, marking declines of around 0.4% each for the five days. Get some rest over the weekend because next week is going to be just as busy. The FAANGs may have reported, but there’s still tons of earnings season left. We’ll also be getting the turn-of-the-month data deluge that culminates with the Government Employment Situation report next Friday. Most of the data of late has shown an economy that is definitely recovering from the pandemic, but not to the extent that would accelerate policy changes. The Fed has pretty much supported that viewpoint in recent statements. And earnings season has been solid even if the market doesn’t always reward the results. Now, let’s see what August throws into the mix! Today's Portfolio Highlights: Stocks Under $10: It’s finally time to say goodbye to one of the biggest success stories among all ZU services. Cassava Sciences (SAVA) had routinely been in the top performers list ever since it was added back on January 5. It focuses on the early detection and treatment of neurodegenerative diseases, such as Alzheimer’s. Brian was getting a lot of subscriber questions after the stock plunged 30% the other day in sympathy with some “bad” data for a competitor. But he held onto the name. But today SAVA was the focus of a “really ugly headline” about scientists critiquing its study results. The editor decided to play it safe and get out of the name just in case there’s another “re-pricing” in the Alzheimer’s space. Therefore, he sold SAVA on Friday for an impressive 856% return in just about seven months. Read the complete commentary for all the specifics on why Brian made this move today. ETF Investor: The portfolio swapped out dividend growth ETFs on Friday by selling WisdomTree U.S. Quality Dividend Growth ETF (DGRW) and buying iShares Core Dividend Growth ETF (DGRO). Both of these names focus on stocks with potential for sustainable dividend growth. They have similar performances over the past five years and have similar holdings. So why buy DGRO and sell DGRW? Well, DGRO has a lower expense ratio and has more exposure to financials, which Neena wants as we move slowly but surely toward tapering. Plus, selling DGRW gives the portfolio an opportunity to bank a 98.5% return. Make sure to read the full commentary for more on the editor’s move. Technology Innovators: As promised in last night’s commentary, Brian made an addition to the portfolio on Friday. He picked up Celestica (CLS), a leading electronics manufacturing services company that serves the computer and communications sectors. The editor thinks we’ll see a solid post earnings drift higher, as CLS just reported a beat-and-raise quarter. That result makes eight straight positive surprises with an average beat of 15.5% over the past four. Rising earnings estimates have made the stock a Zacks Rank #1 (Strong Buy). Brian also reached the “point of no return” with International Game Technology (IGT), which continues to drop on COVID fears. He sold the name today for a loss. Read the full write-up for more on today’s action. By the way, this portfolio had the top performer among all ZU names today as Silicon Motion Technology (SIMO) climbed 16.6% after strong quarterly results. Grid Dynamics (GDYN) also made the Top 5 with a rise of 10.4% for the service's second double-digit winner of the day. Headline Trader: "The public equity market looks exceptionally toppy with the incredible mega-cap tech earnings (except for Amazon) in the rearview mirror and monetary tightening on the horizon. This past week has illuminated a shift in investor sentiment as this bull market matures. "We came from a buy anything and everything bull run in the last 3 quarters of 2020 to an overweight value approach in the first half of 2021, and now we are entering the mature side of this stock market cycle. Investors are pulling profits on their biggest winners while holding on to quality names: companies with healthy balance sheets and a secular profitable growth outlook. "Investors are taking on a risk-off strategy as we enter August. Traders are trying to time a broader market correction (10%+ pullback), which has been moving its way to the forefront of market sentiment. On average, there is at least one broader stock market correction each year, and many analysts are projecting this to occur sometime next month, but I remain skeptical." -- Dan Laboe Have a Great Weekend! Jim Giaquinto   Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P Reaches New Record as Stocks Bounce Back

S&P Reaches New Record as Stocks Bounce Back SPECIAL ALERT: The August episode of the Zacks Ultimate Strategy Session will be available for viewing no later than Wednesday, August 11. Kevin Matras, David Bartosiak, Neena Mishra, CFA, FRM, and Sheraz Mian will cover the investment landscape from several angles in this popular event. Don’t miss your chance to hear: • Sheraz and Neena Agree to Disagree on whether inflation worries are overblown • Kevin answers your questions in Zacks Mailbag • Sheraz and David choose one portfolio to give feedback for improvement • And much more Remember, we need your input. Please submit your questions for Zacks Mailbag and Portfolio Makeover by Thursday morning, August 5. Email now to mailbag@zacks.com. Then log on to Zacks.com and bookmark this page. Stocks began Tuesday’s session in the red, but finished higher after a strong second half. In other words, it was pretty much the reverse of Monday’s action. Along the way, the S&P got back to a new high for the first time in over a week. The index rose 0.82% to 4423.15, barely making history by less than one point from the last record of 4422.30 on Monday July, 26. Meanwhile, the Dow advanced 0.80% (or about 278 points) to 35,116.40 and the NASDAQ was up 0.55% (or around 80.23 points) to 14,761.29. It’s a nice rebound from yesterday’s mixed session when the S&P and Dow lost early gains and sold off in the final hour. The NASDAQ managed a slight advance despite the downward pressure. There were no big changes between the two sessions. Investors are still concerned about the delta variant, rising inflation and potential taper talk from the Fed. They’re also a bit nervous about the heavy slate of economic data being released in the days ahead, especially the Government Employment Situation report on Friday. However, investors are also buying any dips that come around amid a strong earnings season. More than 80% of the S&P companies that have reported so far have beaten earnings and revenue expectations. It continued today with positive earnings surprises from heavy hitters like Alibaba (BABA), Amgen (AMGN), BP (BP), ConocoPhillips (COP) and Activision Blizzard (ATVI), just to name a few. Tomorrow will be another busy day of earnings with more than 400 companies coming to the plate, but we’ll also be getting another round of economic data. The big release on Wednesday will be the ADP Employment report, which begins three straight days of important jobs data. Jobless claims comes on Thursday and, as mentioned above, the all-important monthly BLS report closes out the week. Another number to watch tomorrow is ISM Services. Last time, the print was 60.1 in June, which missed expectations and the previous month’s result. However, it remained solidly in expansion territory over 50. The ISM Manufacturing report came out yesterday, which also slightly missed expectations but remained above 50. Today's Portfolio Highlights:  Surprise Trader: In addition to being a Zacks Rank #1 (Strong Buy), Avnet (AVT) is also part of a space in the Top 2% of the Zacks Industry Rank (Electronics – Parts Distribution). The company is one of the world’s largest distributors of electronic components and computer products. It is scheduled to report earnings on Wednesday, August 11, when it will be going for a sixth straight quarterly beat. An Earnings ESP of 9.82% suggests that AVT is well on its way to continuing that streak. Dave added the stock on Tuesday with a 12% allocation, while also selling Schneider National (SNDR) for more than 4% in less than two weeks after a lackluster post-earnings drift. Read the full write-up for more on all of today’s action. In other news, this portfolio had two of the best performers of the day with Terex Corp. (TEX, +6.4%) and AdvanSix (ASIX, +5.3%).  Stocks Under $10: The latest addition to the portfolio is Volt Information Sciences (VOLT), a Zacks Rank #2 (Buy) staffing name that focuses on IT. The company has topped the Zacks Consensus Estimate for five straight quarters now... and some of those beats have been BIG! In fact, the average surprise over the past four quarters is more than 400%. Brian also likes its valuation and is especially impressed by its margins improving to breakeven from a 3% loss. Best of all, the margins look to be positive moving forward. Read the full write-up for more on today’s addition. Meanwhile, this service also had a top performer on Tuesday as Alto Ingredients (ALTO) rose 6%.   TAZR Trader: With the NASDAQ looking a bit vulnerable at the moment, Kevin thought this was a good time to trim a few positions and bank a couple double-digit profits. Advanced Micro Devices (AMD) and Cadence Design Systems (CDNS) have both been big performers since being added, so the editor took partial profits of 39% and 20.9%, respectively, to play it safe at a volatile time. He also sold some of Qualcomm (QCOM) after Google announced it was dropping the company’s chips to make their own. The stock still brought an 8.4% return. Read the full write-up for more. Counterstrike: It looks like we could be in store for a volatile August, so Jeremy decided to add some protection to the downside. The editor bought a 7% allocation in ProShares Ultra VIX ShortTerm Futures ETF (UVXY) to get some exposure to the VIX, which could spike close to 30 if the market heads lower during this historically “strange” month. Remember, UVXY moves 1.5X the VIX and was a double-digit winner for this portfolio last month. The portfolio also added 4% to Direxion Daily S&P 500 Bear 3X Shares (SPXS) to increase its S&P short hedge as a dip to 4300 wouldn’t be out of the question in a selloff. If the market gets back to all-time highs, Jeremy has no problem in exiting these positions. Read the full write-up for more. Until Tomorrow, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Record-Setting Rally Hits a Wall as Retail Sales Disappoint

Record-Setting Rally Hits a Wall as Retail Sales Disappoint SPECIAL ALERT: We've just released an exclusive report that reveals the secrets the pros use when utilizing earnings reports for profit. You'll quickly discover why earnings season is the best time of the year to make money. Also, you'll receive the top 6 stocks to watch out for this earnings season. Log on to Zacks.com to see these stocks now. We’ve had five consecutive days of record closes for two of the major indices, but the streak finally came to an end on Tuesday amid sluggish retail numbers. And we’ll be getting even more retail news tomorrow, along with the minutes from the Fed’s July meeting. The Dow dropped 0.79% (or about 282 points) to 35,343.28, while the S&P slipped 0.71% to 4448.08. This marks the first negative close for these indices since Monday of last week (August 9). Those five days of gains were also five days of record highs. Meanwhile, the NASDAQ continued to lag its counterparts as tech remains out of favor for now. The index saw the stiffest drop on a percentage basis today by slipping 0.93% (or about 137 points) to 14,656.18. Retail sales for July dropped 1.1%, which was quite a bit worse than expectations for a loss of only around 0.3%. It was also a change in tone from the previous month’s surprising and welcomed advance of 0.6%. The data suggests that the delta variant may be limiting economic growth at present. Staying with retail a little longer, two of that space’s biggest players reported before the bell on Tuesday. Walmart (WMT) and Home Depot (HD) each beat Zacks Consensus Estimates on the top and bottom lines, though the market’s reaction differed. WMT, the country’s biggest retailer, beat our earnings estimate by more than 14% and even raised its guidance for full year U.S. comp sales. Shares were only down 0.03%, which isn’t too bad when you consider how stingy this market can be when rewarding strong performances. But home improvement giant HD plunged nearly 4.3% today even though it beat earnings by 2.2% on net sales that rose over 8%. The problem was that total same-store sales of 4.5% missed expectations of 5% or more, as people started getting out instead of focusing on home projects. Same-store sales for the U.S. were also below forecasts. There’s some big retail earnings scheduled for tomorrow as well with Target (TGT) and Lowe’s (LOW) taking centerstage before the bell. Meanwhile, NVIDIA (NVDA) and Cisco (CSCO) are scheduled for after the bell. We’ll also see Fed minutes for the July meeting released on Wednesday. Last time, members decided to stay the course with their monetary support for now, but did seem to be inching toward discussing some curtailment. Investors will be watching closely to see if such movement has accelerated. Today's Portfolio Highlights: Counterstrike: The market’s five-day, record-setting winning streak was impressive, but Jeremy has always been ready for some pullback. Therefore, he continued to protect the portfolio on Tuesday by doubling down on ProShares Ultra VIX ShortTerm Futures ETF (UVXY). He added 4% to the position originally bought earlier this month. The fund didn’t do well as the market continued to grind higher, but the editor thinks the reversal from yesterday’s highs may change things. UVXY moves 1.5X the VIX and was a double-digit winner for this portfolio last month. Meanwhile, the editor short sold Twilio (TWLO) with an 8% allocation, as the cloud communications platform provider has “fallen apart and broken the 200-day MA”. Declining earnings estimates has pulled the stock down to a Zacks Rank #4 (Sell). Finally, the portfolio also sold Groupon (GRPN) today. Read the full write-up for more on all these moves. By the way, it just so happens that UVXY was a top performer in this rough session by climbing nearly 4.7% while the S&P dipped by 0.7%. Options Trader: The premium for the portfolio’s December 540.00 Call in Thermo Fisher (TMO) had doubled, so it was time for Kevin to reposition. He sold to close that option on Tuesday for a 146.2% return and then bought to open a December 600.00 Call with the original dollars committed. Now, the service will still be making money as TMO increases, but won’t lose any principal if the stock declines. See the complete commentary for all the specifics.   Surprise Trader: Ever since going public, BJs Wholesale Club (BJ) has been beating the Zacks Consensus Estimate. Dave doesn’t expect that will change when this operator of membership warehouse clubs reports again on Thursday before the bell. This Zacks Rank #2 (Buy) beat by 26.3% last time and has a positive Earnings ESP heading into the quarter. The editor added BJ on Tuesday with a 12.5% allocation. Read the full write-up for more on this new addition. TAZR Trader: There’s a possibility that the market heaviness we saw today could accelerate to the downside, so Kevin played a little defense on Tuesday by adding ProShares UltraPro Short QQQ ETF (SQQQ). See the complete commentary for more. Zacks Short Sell List: This week's adjustment changed two positions. The portfolio short-covered Marvell Technology (MRVL) and The AZEK Company (AZEK), and then replaced those names by adding Amazon (AMZN) and CoStar Group (CSGP). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. Meanwhile, as you might expect on such a dreary day, this portfolio had the best performer on Tuesday as its short in JOYY Inc. (YY) rose nearly 5.7%. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Record-Setting Run Continues Despite Low Volume

Record-Setting Run Continues Despite Low Volume We saw another low volume, slow grind higher on Wednesday, but the small advances still kept the market on its record-setting pace as investors prepare for the beginning of the virtual Jackson Hole Economic Symposium. “The market didn’t even feel like it was open today, but we still managed to grind out a positive session,” said Jeremy Mullin in Counterstrike. “This is Christmas Eve or day after Thanksgiving volumes so you can get why I’m poking fun at the inactivity.” The S&P was the “big” winner today with a gain of 0.22% to 4496.19, while the NASDAQ spent its second session above 15K by advancing 0.15% (or about 22 points) to 15,041.86. Each of these indices now have five-day winning streaks. Furthermore, the S&P has closed at record highs in the past two sessions, while the NASDAQ has done so in the past three. The Dow is on a nice four-day run of its own after rising 0.11% (or nearly 40 points) to 35,405.50, or about 0.6% away from making its own new high that was set just a week-and-a-half ago. The index got a little roughed up after last Wednesday’s Fed minutes from its July meeting, which saw several members warm up to changing the monetary policy. And those minutes are why people are biting their fingernails over the virtual Jackson Hole meeting, which starts tomorrow. Will some sort of taper timeline be announced on Friday when Fed Chair Jerome Powell makes his remarks? Investors know its on the horizon, but don’t want a change to come too soon while the delta variant is still having an impact.   In other news on Wednesday, the latest retailer to make noise in the market was DICK’S Sporting Goods (DKS), which rose 13.3% after a strong second quarter report. EPS beat the Zacks Consensus Estimate by more than 81%, while revenue jumped over 20% year over year and also topped expectations. And after the bell today, salesforce.com (CRM) also reported strong quarterly results with a positive earnings surprise of more than 62%. Shares of this CRM software giant are up more than 2.6% after hours, as of this writing. Today's Portfolio Highlights: Home Run Investor: A lot of people used the shutdown to go back to school, which explains why Stride (LRN) had such a great financial performance throughout the pandemic. LRN is a career learning business that has beaten the Zacks Consensus Estimate for the past seven consecutive quarters with an average surprise of 69% over the past four. And analysts expect this success to continue. Rising earnings estimates have made LRN a Zacks Rank #1 (Strong Buy). Even with topline growth of 47% in its most recent quarter, the company still trades at 16x forward earnings. With net margins moving higher and growth expected to continue, Brian wouldn’t be surprised if LRN runs to $50 before the end of the year. Read the complete commentary for more on this new addition. ETF Investor: With $55 billion earmarked for water in the infrastructure bill, Neena saw a good time to invest in this “precious commodity with a limited supply”. On Wednesday, the editor added Invesco Water Resources ETF (PHO), which is the most popular water ETF with $1.97 billion in assets and a reasonable expense ratio of 60 basis points. Needless to say, PHO invests in companies focused on conserving and purifying water. The editor also decided to sell the Global X Telemedicine & Digital Health ETF (EDOC) for a slight loss after lagging in the portfolio for a while. Read the full write-up for more. Commodity Innovators: Three names were added on this busy Wednesday, including two from agriculture and one from energy. Lindsay Corp. (LNN) is a Zacks Rank #2 (Buy) that’s focused on water management and road infrastructure, but it’s the former business that Jeremy is most interested in. The irrigation segment helped the company post a 32% earnings beat most recently and has the editor thinking of new highs before the end of the year. Speaking of crops, the portfolio also picked up Teucrium Corn ETF (CORN) because corn futures are showing resilience under the 200-day and should be strong heading into winter. Finally, it may be weird to think about the colder months during a heatwave, but natural gas has been soaring and may hit highs set back in 2018. The editor added exposure through ProShares Ultra Bloomberg Natural Gas (BOIL), which moves 2X the daily move of natural gas. LNN and CORN are seen as long terms, while BOIL is a short term. Read the full write-up for more. Surprise Trader: This earnings season has seen several strong retail reports, including DICK’S Sporting Goods (DKS) today. Dave is feeling much more comfortable in the space and added Abercrombie & Fitch (ANF) on Wednesday. This Zacks Rank #1 (Strong Buy) apparel company reports before the bell tomorrow. It topped the Zacks Consensus Estimate in each of the last four quarters and has a positive Earnings ESP of 4.93% for tomorrow’s release. ANF was added today with a 12.5% allocation, while Tapestry (TPR) was sold. The complete commentary has more on today’s action. By the way, DKS was the best performer among all ZU names on Wednesday by climbing 13.3% after a strong second-quarter report.   TAZR Trader: The portfolio took advantage of some pullbacks and added more to Square (SQ) and Advanced Micro Devices (AMD) on Wednesday. SQ is a “monster of fintech” that’s trading at just 6 times sales expected to grow 98% this year. And its expected to top $21 billion next year. AMD is still undervalued compared to NVIDIA (NVDA) and should be able ride the coattails of that graphics chipmaker as investors scramble to buy it. AMD is up 33.7% in the portfolio since being added in June, while SQ rose 31.4% since March. (By the way, NVDA is the portfolio’s biggest winner at the moment with an 84.8% surge since March 2020.) Kevin also sold ProShares UltraPro Short QQQ ETF (SQQQ) today. Read the full write-up for more on all of today’s moves. Headline Trader: "Money managers scampered out of fixed-income and into reopening stocks, causing yields to breakout. At the same time, capital is flowing back into recovery plays in travel & leisure, banks, energy, and industrials, which had experienced soft performance in the past few summer months. "This trend has been playing out since the beginning of the week, as market participants position for the awaited monetary tightening policy change, which some believe could occur as soon as Friday. "I don't see an asset paring plan being disclosed in Friday's virtual post-Jackson Hole press conference. Just the fact that this over 4-decade old economic tradition is still being held virtually is evidence that the pandemic still impacts our society. I surmise a tapering timeline to be laid out in next month's FOMC meeting (Sept. 21-22), following what should be another healthy monthly jobs report for August. The Fed's asset purchases should slow before the year is up." -- Dan Laboe All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Stay Red All Week

Stocks Stay Red All Week Stocks just finished off this abbreviated week with their worst session in what’s now a five-day losing streak, leaving all of the major indices with sharp declines in just four days as investors worry about the delta variant’s impact. The NASDAQ saw the stiffest percentage drop of the week today among all major indices by slipping 0.87% (or about 132 points) to 15,115.49. The index dipped 1.6% for the whole week. In addition to the general malaise at the moment, the NASDAQ also had to deal with Apple (AAPL) plunging 3.3% after a federal judge ruled against the iPhone maker in regards to its App Store practices. Meanwhile, the Dow declined 0.78% (or 271 points) to 34,607.72 and the S&P was off 0.77% to 4458.58, bringing their weekly losses to 2.2% and 1.7%, respectively. Not to keep dwelling on bad news, but the market has been ill-tempered ever since the Government Employment Report last Friday, when the 235K jobs added in August missed expectations by nearly 500K. The Dow and S&P finished in the red that session and haven’t seen green since, marking a five-day skid in what’s historically been the worst month of the year for the market. The NASDAQ managed a tiny 0.07% advance on Tuesday.   And today’s report on U.S. producer prices added more fuel to investor concerns. Wholesale costs for businesses rose 0.7% last month, which was less than the previous print but still very high. Through August, the index surged 8.3%. The Fed considers these rising prices to be transitory, but investors are still nervous given all the other uncertainties at the moment. The CPI will be released on Tuesday. Rising inflation is bad enough, but the market’s real worry right now is the delta variant throwing cold water on the economic recovery. The Federal Reserve has a two-day meeting later this month that will tackle these issues and possibly provide an update on any potential tapering of its asset purchases. Today's Portfolio Highlights: Blockchain Innovators: The Voice over Internet Protocol (or VoIP) space has been involved with blockchain for years now. The technology helps to add layers of security and improve the authentication process. VoIP is a big part of Ooma (OOMA), which provides communications solutions and other connected services to small business, home and mobile users. Therefore, such exposure makes OOMA a good pick for this portfolio. The company enjoys an excellent earnings history with an average surprise of 55% over the past four quarters. Plus, rising earnings estimates made it a Zacks Rank #2 (Buy), while next year’s sales and earnings are expected to grow 8.7% and 23.3%, respectively. Read the full write-up for a lot more on today’s addition of OOMA.    TAZR Trader: The portfolio raised even more cash before the weekend by taking profits on two positions. First of all, Kevin thinks the service has captured most of the gains for Cadence Design Systems (CDNS), especially after pushing to new highs today. He still loves this company, but decided to sell into strength and get a 34.6% return in less than four months. Secondly, the editor expected Advanced Micro Devices (AMD) to stay strong for a while longer, so he sold about half of it today for a nearly 30% profit in just under three months. The portfolio may buy more at a cheaper price once the indices revisit their 50-day MAs. Options Trader: "The markets started off in positive territory today, but were quickly put on the defensive after the Producer Price Index (PPI) for August rose 8.3% y/y. Quite frankly, that was not a surprise as it came in exactly as expected. But it was the biggest increase since 2010. And that just added to an already difficult week. "It should also be pointed out that the Fed still expects these higher inflation readings to be transitory. Aside from appearing exaggerated due to base effects (comparing things to last year’s pandemic-subdued numbers), the higher inflation readings are also being attributed to supply disruptions and worker shortages. "Those should start seeing some relief as the enhanced unemployment benefits came to an end earlier this week, which means millions of workers, which were incentivized to stay home rather than rejoin the workforce, will be forced to look for work. "And with more jobs available than there are unemployed people to fill them, their reentry into the workforce will be greatly welcomed. And that will begin to ease supply constraints and labor shortages, thus adding to economic growth while simultaneously helping to ease inflation." -- Kevin Matras Have a Great Weekend! Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Cooler-Than-Expected CPI Fails to Heat Up the Market

Cooler-Than-Expected CPI Fails to Heat Up the Market Even a cooler-than-expected CPI report couldn’t snap the market out of its September slide, as the major indices resumed this month’s downward trajectory on Tuesday after a mostly positive start to the week. The Dow plunged 0.84% (or about 293 points) to 34,576.46, while the S&P slipped 0.61% to 4441.28. Not only did these indices fail to add onto Monday’s advances, but they lost more than was gained yesterday. So we’re already in the red for this week with the Dow and NASDAQ each lower for the sixth time in the last seven sessions. The NASDAQ isn’t much better. It declined 0.46% (or about 70 points) to 15,035.42, which marks its fifth straight negative close. Apple’s (AAPL) iPhone 13 event, which also introduced new iPads and new Apple Watch series, didn’t provide much of a boost for the company. Shares dipped nearly 1% today. Investors have been eagerly awaiting today’s CPI report. And you know what? It ended up being slightly better than expected. VERY slightly.    Consumer prices rose 5.3% in August year over year, which was in-line with expectations and a tad better than July’s 5.4% rise. It was up 0.3% month on month, which was also more moderate than July’s 0.5% advance over June. Core CPI, which excludes energy and food costs, came in cooler than expected as well. These readings are still extremely high, but you’d think that a market so concerned with rising inflation would react more favorably to a lighter-than-feared CPI report. Even a 0.1% improvement could be seen as supporting the Fed’s forecast that such rising prices are transitory. Unfortunately, the report doesn’t shed any light on the market’s main problem at the moment, which is the delta variant and its impact on the economic recovery. Next week’s Fed meeting is growing more important every day. Today's Portfolio Highlights: Stocks Under $10: The staffing business is booming right now, as evidenced by the space being in the top 10% of the Zacks Industry Rank. This portfolio’s best performer at the moment is easily the staffing firm Cross Country Health (CCRN), which has soared nearly 150% since being added last November. Given such success, Brian decided to pick up another name from this area on Tuesday by buying RCM Technologies (RCMT). This Zacks Rank #2 (Buy) topped expectations three times and matched once in the past four quarters. The most recent beat was more than 266%. Full year earnings and revenue growth is seen at nearly 144% and 22.5%, respectively, with more growth expected next year. In addition to picking up RCMT, the portfolio also sold Ammo (POWW) and Babcock (BW) because these names were “beyond the point of no return”. Read the full write-up for more on all of today’s action. In other news, Diana Shipping (DSX) made the top movers scoreboard yet again by advancing 3.7% on this down day and remains one of the best performers over the past 30 days by surging 42.3%.       Zacks Short Sell List: Two positions were swapped in this week's adjustment. The portfolio short-covered Amazon (AMZN, +1.7%) and Intuit (INTU), and then replaced those names by adding AppLovin Corp. (APP) and Certara (CERT). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. By the way, this portfolio had the top performer on Tuesday as the short in Las Vegas Sands (LVS) advanced nearly 10%. The short in StoneCo (STNE) also made the Top 5 by climbing 3.7% in this rough session. Options Trader: "After hitting new all-time highs just two weeks ago, stocks have pulled back a bit as the market tries to consolidate recent gains. "It will continue to look for direction while it sorts thru concerns over inflation, supply and worker shortages, and the effects the delta variant will have on growth moving forward. "Traders will also be watching developments on the infrastructure bill, the budget framework bill, and the taxes to go along with it. We’ve already heard some of the proposals. Taxes, of course, are growth suppressors, while stimulus is a growth driver. But we’ll have to see the details. "In the meantime, the economy continues to expand. And at an impressive pace. Maybe less than earlier forecast, but still very impressive." -- Kevin Matras Have a Good Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Finally Have a Solid Session in September

Stocks Finally Have a Solid Session in September The market finally saw a respectable rally in September on Wednesday, and now the major indices are on positive ground for the week as we move past the halfway point. Along the way, the NASDAQ snapped its five-day losing streak. The S&P rose 0.85% today to 4480.70, while the Dow advanced 0.68% (or nearly 237 points) to 34,814.39. These results mark only the second positive close for the indices in the last eight sessions. Meanwhile, the NASDAQ ended a five-day drought by rising 0.82% (or about 123 points) to 15,161.53. Perhaps there’s some delayed reaction to yesterday’s CPI report, which failed to provide any upward momentum despite being slightly cooler than expected. Consumer prices rose 5.3% year over year and 0.3% month on month, which improved upon the previous print’s gains of 5.4% and 0.5%, respectively. But Wednesday had a couple positive points as well. The Empire State Manufacturing Index was sharply better than expected by jumping to 34.3 from last month’s 18.3, while also easily beating expectations of 18.6. In addition, a surge in oil prices also helped break the market out of its rut. “WTI crude futures broke out today as the production-halting impact of hurricane Ida and the swift global rejuvenation from the recent COVID-variant are throwing off the balance of supply and demand in this market,” explained Dan Laboe in today’s Headline Trader. Or maybe it was just time for some relief from all the negative momentum since that disappointing jobs report a couple weeks ago. Will we be able to build on these gains this time? There’s some important economic data scheduled for Thursday that could make a difference. First of all, jobless claims will be released tomorrow. Last week, the print came to only 310K, which was better than expectations at 335K and the previous week’s 340K. It also marked another pandemic-era low. A break below 300K would definitely be fun. Retail sales are also scheduled for Thursday. Last month’s decline of 1.1% fell well short of expectations for a loss of only 0.3%. It also unnerved investors who were worried about global growth amid the delta variant. They’re still worried about that a month later, so this report will be of interest. We’re now more than halfway through September… and the month is living up to its reputation as the worst time of the year for stocks. Let’s see if things change in the back half…  Today's Portfolio Highlights: Options Trader: The Banks – West space is currently in the top 24% of the Zacks Industry Rank. One of the companies from this area is Western Alliance Bancorp (WAL), which provides a broad array of banking, leasing, trust, investment and mortgage services in NV, AZ and CA. While Kevin likes the banks in general right now, he’s especially interested in the potential head and shoulders pattern that’s forming with WAL at the moment. In fact, the editor bought to open a March 105.00 Call in WAL on Wednesday, since he expects the uptrend to continue and eventually breakout through $102.97. Make sure to read the complete commentary for all the specifics on this move and learn why Kevin considers it to be a higher risk than normal.    Healthcare Innovators: Shares of Dynavax (DVAX) plunged double digits earlier this week on news that one of its customers, French vaccine maker Valneva, received a termination notice from the UK in regards to its vaccine candidate. Well, that’s a pretty good reason to get out of DVAX and collect a nice 51% return. Kevin added this provider of vaccine adjuvants (molecular aids for immunogenicity) back in early February. Read the complete commentary for a lot more on DVAX and the editor’s decision to take it off the table. By the way, this service enjoyed a top performer today as Exact Sciences Corp. (EXAS) rose 7.8%. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Cut Losses Amid Mixed Economic Data

Stocks Cut Losses Amid Mixed Economic Data Stocks couldn’t add onto yesterday’s gains in Thursday’s session, but they did manage to come well off their lows by the close and stay in positive territory for the week. Of course, there's still one more day to go. Meanwhile, today’s economic data (jobless claims, retail sales) was mixed. The Dow plunged more than 270 points at its worst today, but significantly cut that deficit and declined only 63 points by the closing bell. It was down 0.18% to 34,751.32. The S&P also recovered from sharper losses and slipped by only 0.16% to 4473.75. The NASDAQ took the same trajectory as its counterparts, but managed to come all the way back and finish with a slight gain of 0.13% (or about 20 points) to 15,181.92. Stocks are coming back from their best session in the expectedly difficult month of September. The indices were all up by 0.5% or more on Wednesday, which snapped the NASDAQ’s five-day losing streak. “This week we have formed a pattern in the S&P between the 21-day moving average and the 50-day moving average. The 21-day is getting sold, while the 50-day is being bought. Whichever gives in first, will likely give us our market direction over the short-term,” said Jeremy Mullin in Counterstrike. “It’s really hard to make a determination of that direction right now. If I had to guess, the bulls will win out again and that 50-day will hold up once more.” Today’s economic data was mixed. Let’s go with the good news first. Retail sales in August rose 0.7%, which marks a substantial improvement over July’s more than 1% plunge. Most importantly though, the result was better than expectations for a 0.7% loss, which shows that consumers are still spending money despite the delta variant. However, jobless claims were underwhelming with the print coming in at 332,000 last week, which was about 12K more than expected. It was also higher than last week’s results, which means we've come off the pandemic-era low slightly. Stocks have a good chance to rebound from last week’s sharp declines. However, tomorrow is one of those option expiration days, so we may see a spike in volume. Let’s hope for a solid end to the week… Today's Portfolio Highlights: Home Run Investor: The shipping space isn’t known for its consistency over the years, but these are different times with companies now being able to contract out big percentages of their fleets. Brian has a shipping winner in one of his other portfolios, so he decided to add some exposure over here as well by adding Euroseas Ltd. (ESEA). The company operates in the dry cargo, drybulk and container shipping markets. It doesn’t have the greatest earnings history (as is normal for this space), but the most recent quarter included a positive surprise of 27%. The high demand has analysts raising their earnings estimates, which sent ESEA all the way to Zacks Rank #1 (Strong Buy) status. The editor also appreciates topline growth expectations of 71% for this year and another 40% for next, as well as its “dramatically” improving margins. Read the full write-up for more on today’s addition. Surprise Trader: Sometimes Dave likes to “sprinkle in” the occasional Zacks Rank #3 (Hold), since stocks with lower expectations can potentially catch the market off guard and soar after a solid report. The editor sees such potential with Darden Restaurants (DRI), which has an impressive record of beating the Zacks Consensus Estimate that stretches back years. The Olive Garden and LongHorn Steakhouse company topped expectations by 11.5% last time, and has a positive Earnings ESP of 1.69% for the quarter coming before the bell on Thursday, September 23. Dave added DRI with a 12.5% allocation on Thursday, while also selling Agilent Tech (A) for more than 9% in just a little over a month. Learn more about today’s action in the complete commentary. Technology Innovators: With trillions of dollars likely to be spent on infrastructure, Brian thinks that Bentley Systems (BSY) could be a “real sleeper” moving forward. This Zacks Rank #2 (Buy) provides software solutions to engineers, architects and the like for the design, construction and operation of infrastructure. The company has a great earnings history with positive surprises in each of the last four quarters and an average beat of 32% over that time. Being an Internet software name, the editor is most interested in its growth and margins rather than more traditional valuation metrics. BSY is expected to generate full-year growth of 20%, while operating margins have moved to 25% from 20% over the past three quarters. Read the full write-up for a lot more on this new addition. Have a Good Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Off-Premise Business Drives Darden (DRI), High Costs Ail

Darden (DRI) continues to focus on simplifying kitchen systems, sales planning and scheduling as well as menu customizations to drive growth. However, high operating costs are a concern. Darden Restaurants, Inc.‘s DRI focus on off-premise sales, digitization initiatives and menu simplifications bodes well. A rise in labor and other operating expenses along with coronavirus-related woes is a concern.Let’s discuss the factors highlighting why investors should retain the stock for the time being.Factors Driving GrowthEven though capacity restrictions continue to ease, Darden’s off-premise sales remained strong during fiscal 2021 and first-quarter fiscal 2022. For first-quarter fiscal 2022, it contributed 27% of total sales at Olive Garden and 15% at LongHorn. Notably, the company has been benefitting from the technological enhancements related to online ordering, introduction of To Go capacity management and Curbside I'm Here notification. Going forward, the company intends to revamp its point-of-sale system to boost guest experience as well as to manage off-premise offerings.Meanwhile, to reduce friction and enhance consumer convenience in the digital platform, Darden initiated streamlining of the order pickup process and payment methods. Backed by these initiatives, online ordering has increased sharply. Additionally, it is witnessing a sharp increase in To Go sales. During first-quarter fiscal 2022, 60% of all off-premise sales were placed digitally. Going forward, the improvements in business model are likely to reinforce its ability to boost restaurant value across its brands.Darden, which shares space with Jack in the Box Inc. JACK, Papa John's International, Inc. PZZA and El Pollo Loco Holdings, Inc. LOCO in the Zacks Retail - Restaurants industry, continues to focus on the core menu, culinary innovation and providing regional flavors. It is also working toward strengthening its in-restaurant execution through investments in quality and simplification of operations to augment the guest experience. Also, it continues to focus on simplifying kitchen systems, improving sales planning and scheduling, operational excellence to improve guest experience, allowing menu customizations and making smarter promotional investments. The operational readjustments are likely to drive the company’s performance, going forward.Maintaining liquidity during the pandemic is a herculean task during the pandemic. Darden stated that it has enough liquidity to survive the coronavirus pandemic for some time. As of Aug 29, 2021, the company’s cash balance totaled nearly $947.8 million compared with $1,214.7 million as of fiscal 2021-end. Lately, it is generating positive cash flow, which is adding to the positives. As of May 30, 2021, the company’s long-term debt is pegged at $936.7 million compared with $929.8 million at the end of fiscal 2021. However, the company’s times interest earned ratio during the quarter came in at 13.9, improving from 10.1 reported at the preceding quarter end.ConcernsThe coronavirus outbreak has rattled the Retail - Restaurants industry and Darden is not immune to the aftereffects. Although the majority of dining services are open, traffic is still low compared with pre-pandemic levels. In August, sales slowed due to the negative impact of the Delta variant. We believe that the Delta variant of coronavirus might hurt traffic and sales in the upcoming periods.Moreover, the company has been persistently shouldering increased expenses, which have been detrimental to margins. In the fiscal first quarter, total operating costs and expenses increased 37.7% year over year due to a rise in food and beverage costs, restaurant expenses as well as labor costs. For fiscal 2022, the company expects total inflation of 4% (up from the prior projection of 3%); commodities inflation of 4.5% (significantly up from 2.5% estimated earlier) and total restaurant labor inflation of 5.5%, which includes hourly wage inflation of 7% (compared with 6% anticipated earlier). Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Janus Henderson Sustainable & Impact Core Bond ETF (JACK): Free Stock Analysis Report Darden Restaurants, Inc. (DRI): Free Stock Analysis Report Papa John's International, Inc. (PZZA): Free Stock Analysis Report El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks19 hr. 26 min. ago

Novavax (NVAX) Lags in COVID Vaccine Race: Will It Gather Pace?

Novavax (NVAX) is progressing well with its COVID-19 and flu vaccines. However, it is lagging in the COVID-19 vaccine space. Let us see how the company is likely to perform going forward. Novavax Inc. NVAX is a biotechnology company engaged in developing innovative vaccines to prevent serious infectious diseases. It is also developing its proprietary adjuvant, Matrix-M, to increase immune responses.The company’s shares showed a strong uptrend in 2020 and have gained nearly 27-fold in a year since Dec 31, 2019. The uptrend was mainly driven by the company’s progress with its promising nanoparticle-based COVID-19 vaccine candidate, NVX-CoV2373. Although the company has made progress with the vaccine so far in 2021 and witnessed upward share price movement, the strong momentum of 2020 seems to be missing, primarily due to the failure to gain any authorization for the vaccine so far.Vaccine EffectivenessBased on data from a late-stage study announced in June 2021, the company’s COVID-19 vaccine candidate demonstrated an overall vaccine efficacy of 90.4% and achieved 100% protection against moderate and severe coronavirus disease. The COVID-19 vaccine candidate was found to be effective against strains of the coronavirus first found in the United Kingdom, the United States, Brazil, South Africa and India.NVX-CoV2373 is also being evaluated in adolescents aged between 12 years and less than 17 years.CompetitionThe company’s COVID-19 vaccine is lagging the race as billions of people have already received the vaccine this year. We note that Pfizer PFE/ BioNTech’s Comirnaty and Moderna MRNA were granted emergency use authorization (“EUA”) by the FDA in December last year. Comirnaty also received “full” FDA approval as a COVID-19 vaccine for adults last month. J&J JNJ received EUA in the United States for its single-shot COVID-19 vaccine in February this year. Although AstraZeneca’s COVID-19 vaccine is yet be authorized in the United States, it is available in multiple other countries.The longer the delay in getting an authorization or approval for NVX-CoV2373, the slimmer the chances of gaining a significant chunk of the market for COVID-19 vaccines. Moreover, competition will rise with an increase in available vaccines going forward as other players with a COVID-19 vaccine candidate are also vying for an authorization or approval. Moreover, the development of oral antiviral therapies for COVID-19 also threatens the opportunity for vaccines.ProspectsWe note that the mRNA-based vaccines from Pfizer and Moderna are leading the COVID-19 vaccine space and are expected to generate aggregate revenues of more than $50 billion in 2021. However, there have been reports of safety issues with these two vaccines including heart inflammation. Adenovirus-based vaccines were also found to have rare safety issues. These safety concerns with available COVID-19 vaccine can pave the way for acceptance of a vaccine developed using a different technology. Novavax’s nanotechnology-based vaccine can become a possible alternative going forward. The vaccine candidate is also one of the leaders among the COVID-19 vaccines still under development. The company has already filed for Emergency Use listing with the World Health Organization last month and plans to submit an EUA request with the FDA by the year-end. The company is on track to achieve capacity of 150 million doses per month by the end of 2021. It also has signed advance purchase agreements for more than one billion doses with different countries and organizations. A smooth delivery of the COVID-19 vaccine will boost the company’s prospects in 2022.Apart from the COVID-19 vaccine, the company is also developing a nanoparticle-based seasonal influenza vaccine candidate, NanoFlu, for senior patients. The company has successfully completed a late-stage study evaluating the candidate and plans to file a regulatory application seeking its approval soon. Although the flu vaccine in the United States is majorly government-controlled, the flu vaccine market represents a blockbuster opportunity. The company is developing a nanoparticle-based vaccine for malaria in a late-stage study.Meanwhile, the company is also evaluating a combined COVID/flu vaccine. The company has separately completed late-stage studies on either vaccine candidates and both of them have shown promising results individually. We expect the combination vaccine tol also demonstrate similar results. A successful development of the combined COVID/flu vaccine may put the company ahead of its competitors.ConclusionAlthough the strong momentum in Novavax’s share price has slowed down in 2021, the next year holds promise for the company. A potential authorization or approval to its COVID-19 vaccine and flu vaccine will likely help the company’s stock to turn around. However, the COVID-19 space seems to ever changing. Lower effectiveness of the company’s vaccine due to a new variant or the anticipated rise in competition from new vaccines or therapies may push the company off the track. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Johnson & Johnson (JNJ): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Moderna, Inc. (MRNA): Free Stock Analysis Report Novavax, Inc. (NVAX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks19 hr. 26 min. ago

Penn National (PENN) Rides on Robust Demand for Sport Betting

Penn National (PENN) continues to benefit from sports betting legalization and the MyChoice reward program. Penn National Gaming, Inc. PENN continues to benefit from sports betting legalization, increased focus on cordless, cashless and contactless technology, and acquisitions. However, coronavirus pandemic and intense competition remain concerns. Let’s delve deeper.Growth DriversBeing a leading gaming company in the United States, Penn National is known for its consistent business strategies and strong brand recognition. Through various acquisitions and divestitures, the company expanded its presence. It continues to broaden and leverage its brand power.Most of the gaming companies are now banking on sports betting following its legalization outside Nevada. Penn National has announced historic strategic partnerships with DraftKings, PointsBet, theScore and The Stars Group.The company is focused on collaborating with various gaming companies to leverage its unique brands, cater to large audiences and fulfill commitments to serving sports fans. The company remains optimistic regarding the immense brand value of Barstool and theScore. The acquisition of theScore, which is the strongest sports brand of Canada, will automatically drive Penn National’s brand expansion in the country. Along with the amplification of the company’s brand value, the buyout will help to cross-promote and cross-market between two large brands.During fourth-quarter 2020, the company implemented the MyChoice reward program across all of its properties and online channels. The initiative covers more than 20 million members across its land-based casinos and online platforms, thereby offering players a wide range of incentives. The company joined hands with Choice Hotels to offer reciprocal earning and redemption benefits for Choice Privileges members and members of Penn's MyChoice loyalty program.On Jan 22, 2021, the company unveiled Barstool Sports online sports betting app in Michigan. Penn National witnessed solid demand and acquired a significant number of new customers on the back of Barstool media partnership tools. Its Barstool Sportsbooks and iCasino offerings in Michigan and Pennsylvania continue to drive the company’s performance. On Mar 11, 2021, Penn National launched the Barstool Sportsbook app in Illinois. In second-quarter 2021, the company remained focused on iCasino offerings that included the addition of more third-party content, opening of a Barstool-branded live dealer studio in New Jersey and the launch of the first in-house developed, Barstool-branded online table and slot games by 2021-end.Penn National, which shares space with Boyd Gaming Corporation BYD, Caesars Entertainment Corporation CZR and Century Casinos, Inc. CNTY, continues to shift toward the new generation of cordless, cashless and contactless technology, collectively known as 3C’s. Amid the ongoing pandemic, such initiatives are likely to improve efficiency and customer service, thereby boosting the top line. Going forward, the company plans to launch the 3C's across its casinos in Pennsylvania. It also intends to roll-out in other regions, subject to regulatory approvals. During June 2021, the company successfully launched its 3C technology at Hollywood Casino at Penn National Race Course. This was followed by another implementation of 3C at the Meadows Casino in mid-July.ConcernsThe coronavirus pandemic has negatively impacted the casino operators and Penn National is no exception. The pandemic has dramatically reduced travel and demand for casino gaming and related amenities. The spread of the Delta variant might hurt the company further.The gaming industry is an intensely competitive one. Penn National is continuously facing intense competition from various casinos, video lottery, gaming at taverns and other internet wagering services. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boyd Gaming Corporation (BYD): Free Stock Analysis Report Century Casinos, Inc. (CNTY): Free Stock Analysis Report Penn National Gaming, Inc. (PENN): Free Stock Analysis Report Caesars Entertainment, Inc. (CZR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks19 hr. 26 min. ago

Boyar Value Group 3Q21 Commentary

Boyar Value Group commentary for the third quarter ended September 30, 2021. Q3 2021 hedge fund letters, conferences and more “Cryptocurrencies, regardless of where they’re trading today, Will eventually prove to be worthless. Once the exuberance Wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in Cryptocurrencies.” – […] Boyar Value Group commentary for the third quarter ended September 30, 2021. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Warren Buffett Series in PDF Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more “Cryptocurrencies, regardless of where they’re trading today, Will eventually prove to be worthless. Once the exuberance Wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in Cryptocurrencies.” – John Paulson Stock market investors have a laundry list of worries these days, from partisan bickering over the infrastructure package and a massive social and climate spending bill (amid a high-stakes game of political chicken over the debt ceiling) to supply chain disruptions and a spike in the costs of critical commodities. Geopolitical tensions are escalating between the United States and China—which is undergoing a significant regulatory crackdown—and question marks surround the future of interest rates and the consequences of a future Fed taper. And that’s to say nothing of the coronavirus! So it’s no surprise that investors are on edge—we’re getting depressed just reading through the list. Yet volatility in 2021, measured by how much the S&P 500 has decreased from its all-time high (~5%), has been tame. (According to David Lebovitz, a global market strategist with JP Morgan, the average peak-totrough decline for the S&P 500 over the past 41 years has been 14.3%.) In fact, until September, the S&P 500 was regularly charting new all-time highs, at ~54 and counting. But then the stock market got spooked, with the S&P 500 suffering its worst monthly performance (down 4.65%) since March 2020 and its worst September performance since 2011 (during the European debt crisis). Worse, all but one sector was in the red, with Energy the only advancer. Despite a 4.65% September loss, the S&P 500 eked out a 2% gain for the quarter, marking the sixth consecutive quarter of advances. But its 227 days without a 5% drop from the high ended on September 29—the seventh-longest such streak on record, Jacob Sonenshine of Barron’s tells us. The Dow and the Nasdaq were less fortunate, with their fivequarter winning streaks ending after respective falls of 4.2% and 5.31% in September. The Dow declined by 1.46% for the quarter, and the Nasdaq fell by 0.38%. Historically speaking, a September decline in the S&P 500 isn’t surprising: the past 100 years have seen 89 monthly drops of more than 5%. Felice Maranz of Bloomberg notes that September and October have accounted for 12 of the 26 times the market has dropped by more than 10% in a month. Encouragingly, these 26 drops were followed by subsequent 12-month gains on 16 occasions (for an average gain of 6.8%). Bond yields also began to increase (the 10-year Treasury went from 1.18% to 1.61% in less than 3 months), which dragged down technology shares. Higher yields on long-term risk-free investments make future profits less valuable, harming many tech company valuations, which are often based on expectations of significant profits many years down the line. Since technology companies are weighted heavily in the S&P 500 (nearly 28%, or more than 2x the weighting of the next-largest sector, Health Care, at 13.3%), the index dropped quite a bit more than the average stock did. (In September the S&P 500 index declined by 4.65%, while the S&P 500 equal-weighted index fell 3.90%.) The S&P 500 finished 3Q 2021 selling for 20.3x earnings (fwd.) versus 19.2x at its February 19, 2020, pre-COVID peak and 13.3x at its March 23, 2020, pandemic low. Since the March 23 bottom, the S&P 500 has gained well over 90%. By most traditional valuation measures (price to earnings, price to book, price to free cash flow, etc.), the S&P 500 is historically overvalued. Overvaluation against historical averages does not mean that investors should avoid equities, because extraordinarily low interest rates make prior valuation comparisons less meaningful. More important, at The Boyar Value Group, we don’t buy “the market”; rather, we purchase, and hold, businesses that sell far below our estimate of their worth. It might be especially hard uncovering bargains right now, but we’ve identified quite a few businesses selling at attractive levels even so. What’s Been Driving Share Price Returns in 2021? None of the 11 S&P 500 GICS sectors had standout performance in 3Q 2021, with 4 in negative territory and 1 flat (Consumer Discretionary). The biggest gainer, Financials, advanced a mere 2.7%. (For comparison, last quarter’s biggest gainer, Real Estate, advanced 13.1%.) By the end of 3Q, no sector was in negative territory YTD, and the best-performing sector by far was Energy (+43.2%). However, its low weighting in the S&P 500 (2.7%) gave it little effect on the index’s return, and its fantastic rise should be viewed in context, following as it did a loss of 37.3% in 2020. Other notable gainers thus far in 2021 have been Financials (+29.1%), Real Estate (+24.4%), and Communication Services (+21.6%). Interestingly, according to JP Morgan, since the market bottomed in March 2020, the S&P 500 had advanced ~97.3% as of September 30, 2021—leaving the index “only” ~30.6% above its February 2020 peak. The FAAMG stocks (Facebook, Apple, Amazon, Microsoft, and Alphabet—formerly Google), which have seemingly been leading the market ever upward, have struggled lately. Since their September peak, they have lost ~9%, or nearly $1 trillion, in market value. Due to FAAMG’s heavy weighting in the S&P 500 (~22%), if this area of the market continues struggling, the S&P 500 likely won’t perform well. Even so, we think there could be plenty of opportunities to make money investing in companies that have lower index weightings and/or that are outside the major indices. Some of the biggest “pandemic winners” are struggling too, with shares in Zoom Video Communications Inc (NASDAQ:ZM), Peloton Interactive Inc (NASDAQ:PTON), and Teladoc Health Inc (NYSE:TDOC) down 24%, 43%, and 34%, respectively, in 2021. (Though it’s worth noting that each company’s share price is trading significantly higher than before the pandemic.) One pandemic standout that has continued to soar throughout 2021 is vaccine maker Moderna, whose shares are up 192% in 2021 and up over 1,000% since March 2020. In hindsight, many signs of an imminent pullback were present. Market sentiment, for example, was very bullish (usually a contrarian indicator). At the beginning of August, two-thirds of JP Morgan clients surveyed were planning to increase their stock exposure in the coming weeks. A recent Bank of America gauge that tracks levels of optimism among market strategists was at a postcrisis high, and as of mid-August, 56% of all Wall Street analyst recommendations on S&P 500 index components were buys, the highest figure since 2002. However, we aren’t market timers. That’s because we know that trying to pinpoint the exact start of a market correction is a fool’s errand that impedes long-term results by prompting more trades (making results less tax-efficient) while removing the chance to make spectacular gains with companies that may be temporarily overvalued based on current earnings but that still have great long-term potential. When selling a high-quality company that has temporarily gotten ahead of itself in terms of valuation but that has excellent future growth prospects, knowing when to repurchase shares is extremely difficult, because the company’s share price often never drops enough to tempt investors into buying it again. So if you sell early to lock in a profit, anticipating a future correction, your profit on a well-timed sale might short-change you on future outsized gains. Reasons for Optimism According to Bloomberg, the final quarter of the year has been the strongest quarter for stocks since 2001, with an average increase of 4.1%. If history is any guide, 4Q 2021 could be a good quarter: 412 members of the S&P 500 are heading into it with gains for the year, the third-highest figure during the past 20 years. During that same period, each time 400 or more stocks have been positive through 3Q, the S&P 500 has produced a gain for 4Q.In another potentially bullish sign for stocks, cash holdings among S&P 500 companies hit $1.8 trillion in August 2021, as reported by Dow Jones Market Data—an increase of almost 30% from 3Q 2019. According to recent research by Goldman Sachs cited by Hardika Singh in a Wall Street Journal article, corporate America seems unlikely to be hoarding this cash, with S&P 500 companies expected to increase cash spending to $2.8 trillion in 2021 (mostly on capital expenditures, mergers, and business investment). Corporations also seem willing to buy back their own shares, having collectively authorized ~$870 billion in share repurchases thus far in 2021, $50 billion ahead of the record set in the first 9 months of 2018. If they deploy this capital wisely, share buybacks could buoy share prices in the short run, with capital investments spurring long-term earnings growth. What Does TINA Have to Do with the Stock Market? TINA, meaning “there is no alternative,” has become a popular catchphrase among investors, used to express the idea that stocks should continue doing well simply because interest rates are so low as to leave investors few investment options to produce an adequate rate of return. With the 10-year Treasury yielding ~1.6% and municipal bonds yielding ~1.17%, investors certainly are lacking attractive traditionally “safe” investment opportunities! Interest rates are so low that even the yields on some risky European junk bonds don’t earn any real return after factoring in inflation. Until rates rise meaningfully, equities should continue to see support—because there truly are few alternatives. The State of Value Investing Since April 2020, the S&P 500 value index has risen a little under 60%, while the S&P 500 growth index has surged over 90%, says Jacob Sonenshine of Barron’s. Value stocks should start outperforming if history is any guide: in the first 2 years of a recovery after a recession, value has bested growth by an average of 24%, based on data from Research Affiliates. The swift rotation back into value shares that began in September 2020 ended abruptly in July of this year as the delta variant slowed down the economic recovery, interest rates fell, and investors once again began embracing technology-oriented shares. But value looks like it might be making a comeback, with interest rates rising again and investors starting to embrace industrial and financial shares. Market Tops With the S&P 500 having advanced well over 80% since its March 2020 highs, and in view of all the political and economic uncertainty on the horizon, investors are questioning whether the latest bull market has ended. However, Mark Hulbert of the Wall Street Journal points out that unlike bear-market bottoms, which usually occur quickly (thankfully), bull markets end slowly, because individual sectors or investment styles peak and retreat at different times: “A recent illustration that not all sectors and styles hit their bull-market highs at the same time came at the top of the internet-stock bubble in early 2000. Though the S&P 500 and Nasdaq Composite indexes hit their bull-market highs in March 2000, value stocks—and small-cap value stocks, in particular—kept on rising. The S&P 500 at its October 2002 bear-market low was 49% lower than its March 2000 high, and the Nasdaq Composite was 78% lower, but the average small-cap value stock was 2% higher than it was in March 2000. Hulbert analyzed 30 bull-market tops since the mid-1920s, using data maintained by Ned Davis Research, and identified the dates when individual sectors and market styles (value, growth, blend) reached their bull-market peaks, reporting a 225-day spread between the dates when the first and last market sectors reached their bull-market tops. There are exceptions, of course, such as with bear markets caused by exogenous events such as 9/11 and the pandemic, but in general, he says, “it’s more accurate to view a bull-market top as a process rather than a single event.” As Hulbert points out, even the so-called experts can’t determine when a market peaks. Over the past 40 years, on days when the S&P 500 reached a bull-market high, the market timers that he followed recommended equity exposure at an average of 65.7%—a higher level of recommended investment than on 95% of all other days over the period. The experts were even worse at picking bear market lows, with their average equity exposure at market lows over the same period a mere 5%—yet another example of investors buying high and selling low! The takeaway is that knowing when a market has peaked is pretty much impossible to do regularly: even the so-called experts are consistently wrong. Individual investors would do much better to base their decisions on the value of each of their holdings rather than trying to guess whether they’re in a bull or bear market. Speculation in the Market The amount of speculation in the stock market worries us. A good example is the heightened use of stock options, which have legitimate hedging purposes, but which individuals seem to have recently embraced for speculative purposes. CBOE data indicate that option trading by individual investors has risen 4x over the past 5 years. As noted by Gundan Banerdi in the Wall Street Journal, “Nine of 10 of the most-active call-options trading days in history have taken place in 2021, Cboe Global Markets data show. Almost 39 million option contracts have changed hands on an average day this year, up 31% from 2020 and the highest level since the market’s inception in 1973, according to figures from the Options Clearing Corp.” As a result, the options market has grown so large that in some respects it’s bigger than the stock market. In 2021, for example, according to CBOE data, the daily average notional value of single stock options was over $432 billion, compared with $404 billion in stocks. We’ve said it before, and we’ll say it again: staying the course and taking a long-term view is one of individual investors’ best ways of stacking the odds of investment success in their favor. According to Dalbar, over the past 20 years the S&P 500 has advanced 7.5% annually, yet the average investor has gained a mere 2.9% (barely beating the 2.1% inflation over the period). Why this underperformance? Partly because investors let their emotions get the best of them and chase the latest investment fad (or they pile into equities at market peaks and sell out at market troughs)—or sell for nonfundamental reasons, such as simply because a company’s share price (or an index) has increased in value. By contrast, taking a multiyear view tilts the odds of success in investors’ favor. Since 1950, the range of stock market returns measured by the S&P 500 (using data supplied by JP Morgan) in any given year has been from +47% to -39%. For any given 5-year period, however, that range is +28% to -3%—and for any given 20-year period, it is +17% to +6%. In short, since 1950, there has never been a 20-year period when investors did not make at least 6% per year in the stock market. Although past performance is certainly no guarantee of future returns, history shows that the longer the time frame you give yourself, the better your chances of earning a satisfactory return. As always, we’re available to answer any questions you might have. If you’d like to discuss these issues further, please reach out to us at jboyar@boyarvaluegroup.com or 212-995-8300. Best regards, Mark A. Boyar Jonathan I. Boyar Boyar Value Group Updated on Oct 14, 2021, 2:01 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 14th, 2021

Norwegian Cruise (NCLH) Bets on Strong Demand Amid Cash Burn

Norwegian Cruise (NCLH) benefits from robust demand and resumption of operations. However, coronavirus pandemic and cash burn woes persist. Norwegian Cruise Line Holdings Ltd. NCLH has been benefiting from strong demand and booking volume growth. The company is ready to launch its fleet by April. However, coronavirus pandemic and cash burn remain major concerns. Let’s delve deeper.Key CatalystsNorwegian Cruise intends to launch its full fleet by April. Since the pandemic began, the company has not operated with full capacity. At present, the company’s eight ships are in operation. CEO Frank Del Rio told CNBC that the company’s full fleet of 28 ships will resume operations by Apr 1. The company anticipates operating with 75% of its vessels by the end of this year.The coronavirus pandemic has severely affected the company’s booking. While overall booking volumes remain below historical levels, it has been registering solid demand for future cruise vacations. Despite lower sales and marketing investments, the company is reporting solid bookings for future periods across all brands. It stated that overall cumulative bookings for full year 2022 are ahead of 2019 levels.Norwegian Cruise is constantly looking to expand fleet size, which is currently at 28. It has plans to introduce nine more ships through 2027. Most of them are on order for Norwegian Cruise Line, while the rest are for Oceania Cruises and Regent Seven Seas Cruises. For the Regent brand, it has one Explorer Class Ship, which is to be delivered in 2023. For the Oceania Cruises brand, the company has two Allura Class Ships, which are to be delivered in 2023 and 2025. With Project Leonardo, Norwegian Cruise will have an additional six ships with expected delivery dates from 2022 through 2027.Maintaining liquidity has become a herculean task amid the coronavirus pandemic for most of the companies. Cash and cash equivalents as of Jun 30, 2021 were $2.8 billion, up from $3.3 billion as of Dec 31, 2020, and $252.9 million at the end of Dec 31, 2019. Although total debt at the end of Mar 31, 2021 was $11.9 billion, it is confident that with the amount of liquidity it holds, it can survive for some time.ConcernsAlthough the company announced the restart of cruise voyages, it is unable to evaluate the overall impact of the COVID-19 pandemic on its long-term or short-term business results. Norwegian Cruise expects to report a loss in the third quarter of 2021 and witness net loss until the company is able to resume regular voyages. The rapidly spreading Delta variant remains a concern.Norwegian Cruise, which shares space with Royal Caribbean Cruises Ltd. RCL, Carnival Corporation & plc CCL and  AMC Entertainment Holdings, Inc. AMC in the Zacks Leisure and Recreation Services space, has been bearing the brunt of high expenses for quite some time now. Costs associated with the suspension of cruise voyages and continued payment of protected commissions and crew salaries are adding to woes. The company's monthly average cash burn for second-quarter 2021 was approximately $200 million compared with $190 million in the prior quarter. For third-quarter 2021, it expects the average cash burn rate to temporarily remain elevated at approximately $285 million per month due to the phased relaunch of additional vessels. 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. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a 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 Carnival Corporation (CCL): Free Stock Analysis Report Royal Caribbean Cruises Ltd. (RCL): Free Stock Analysis Report Norwegian Cruise Line Holdings Ltd. (NCLH): Free Stock Analysis Report AMC Entertainment Holdings, Inc. (AMC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 13th, 2021