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Category: topSource: redinewsMay 1st, 2021

Futures Bounce On Evergrande Reprieve With Fed Looming

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

Category: blogSource: zerohedgeSep 22nd, 2021

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears Even though China was closed for a second day, and even though the Evergrande drama is nowhere closer to a resolution with a bond default imminent and with Beijing mute on how it will resolve the potential "Lehman moment" even as rating agency S&P chimed in saying a default is likely and it does not expect China’s government “to provide any direct support” to the privately owned developer, overnight the BTFD crew emerged in full force, and ramped futures amid growing speculation that Beijing will rescue the troubled developer... Algos about to go on a rampage — zerohedge (@zerohedge) September 21, 2021 ... pushing spoos almost 100 points higher from their Monday lows, and European stock were solidly in the green - despite Asian stocks hitting a one-month low - as investors tried to shake off fears of contagion from a potential collapse of China’s Evergrande, although gains were capped by concerns the Federal Reserve could set out a timeline to taper its stimulus at its meeting tomorrow. The dollar dropped from a one-month high, Treasury yields rose and cryptos rebounded from yesterday's rout. To be sure, the "this is not a Lehman moment" crowed was out in full force, as indicated by this note from Mizuho analysts who wrote that “while street wisdom is that Evergrande is not a ‘Lehman risk’, it is by no stretch of the imagination any meaningful comfort. It could end up being China’s proverbial house of cards ... with cross-sector headwinds already felt in materials/commodities.” At 7:00 a.m. ET, S&P 500 e-minis were up 34.00 points, or 0.79% and Nasdaq 100 e-minis 110.25 points, or 0.73%, while futures tracking the Dow  jumped 0.97%, a day after the index tumbled 1.8% in its worst day since late-July,  suggesting a rebound in sentiment after concerns about contagion from China Evergrande Group’s upcoming default woes roiled markets Monday. Dip-buyers in the last hour of trading Monday helped the S&P 500 pare some losses, though the index still posted the biggest drop since May. The bounce also came after the S&P 500 dropped substantially below its 50-day moving average - which had served as a resilient floor for the index this year - on Monday, its first major breach in more than six months. Freeport-McMoRan mining stocks higher with a 3% jump, following a 3.2% plunge in the S&P mining index a day earlier as copper prices hit a one-month low. Interest rate-sensitive banking stocks also bounced, tracking a rise in Treasury yields. Here are some of the biggest U.S. movers today: U.S.-listed Chinese stocks start to recover from Monday’s slump in premarket trading as the global selloff moderates. Alibaba (BABA US), Baidu (BIDU US), Nio (NIO US), Tencent Music (TME US)and Bilibili (BILI US) are among the gainers Verrica Pharma (VRCA US) plunges 30% in premarket trading after failing to get FDA approval for VP-102 for the treatment of molluscum contagiosum ReWalk Robotics (RWLK US) shares jump 43% in U.S. premarket trading amid a spike in volume in the stock. Being discussed on StockTwits Aprea Therapeutics gains 21% in U.S. premarket trading after the company reported complete remission in a bladder cancer patient in Phase 1/2 clinical trial of eprenetapopt in combination with pembrolizumab Lennar (LEN US) shares fell 3% in Monday postmarket trading after the homebuilder forecast 4Q new orders below analysts’ consensus hurt by unprecedented supply chain challenges ConocoPhillips (COP US) ticks higher in U.S. premarket trading after it agreed to buy Shell’s  Permian Basin assets for $9.5 billion in cash, accelerating the consolidation of the largest U.S. oil patch SmileDirect (SDC US) slightly higher in premarket trading after it said on Monday that it plans to enter France with an initial location in Paris KAR Global (KAR US) shares fell 4.6% in post-market trading on Monday after the company withdrew is full-year financial outlook citing disruption caused by chip shortage Sportradar (SRAD US) shares jumped 4.5% in Monday postmarket trading, after the company said basketball legend Michael Jordan will serve as a special adviser to its board and also increase his investment in the sports betting and entertainment services provider, effective immediately Orbital Energy Group (OEG US) gained 6% postmarket Monday after a unit won a contract  to construct 1,910 miles of rural broadband network in Virginia. Terms were not disclosed “So much of this information is already known that we don’t think it will necessary set off a wave of problems,” John Bilton, head of global multi-asset strategy at JPMorgan Asset Management, said on Bloomberg TV. “I’m more concerned about knock-on sentiment at a time when investor sentiment is a bit fragile. But when we look at the fundamentals -- the general growth, and direction in the wider economy -- we still feel reasonably confident that the situation will right itself.” Aside from worries over Evergrande’s ability to make good on $300 billion of liabilities, investors are also positioning for the two-day Fed meeting starting Tuesday, where policy makers are expected to start laying the groundwork for paring stimulus.  Europe's Stoxx 600 index climbed more than 1%, rebounding from the biggest slump in two months, with energy companies leading the advance and all industry sectors in the green. Royal Dutch Shell rose after the company offered shareholders a payout from the sale of shale oil fields. Universal Music Group BV shares soared in their stock market debut after being spun off from Vivendi SE. European airlines other travel-related stocks rise for a second day following the U.S. decision to soon allow entry to most foreign air travelers as long as they’re fully vaccinated against Covid-19; British Airways parent IAG soars as much as 6.9%, extending Monday’s 11% jump. Here are some of the biggest European movers today: Stagecoach shares jump as much as 24% after the company confirmed it is in takeover talks with peer National Express. Shell climbs as much as 4.4% after selling its Permian Basin assets to ConocoPhillips for $9.5 billion. Bechtle gains as much as 4.3% after UBS initiated coverage at buy. Husqvarna tumbles as much as 9% after the company said it is suing Briggs & Stratton in the U.S. for failing to deliver sufficient lawn mower engines for the 2022 season. Kingfisher slides as much as 6.4% after the DIY retailer posted 1H results and forecast higher profits this fiscal year. The mood was decidedly more sour earlier in the session, when Asian stocks fell for a second day amid continued concerns over China’s property sector, with Japan leading regional declines as the market reopened after a holiday. The MSCI Asia Pacific Index was down 0.5%, headed for its lowest close since Aug. 30, with Alibaba and SoftBank the biggest drags. China Evergrande Group slid deeper in equity and credit markets Tuesday after S&P said the developer is on the brink of default. Markets in China, Taiwan and South Korea were closed for holidays. Worries over contagion risk from the Chinese developer’s debt problems and Beijing’s ongoing crackdowns, combined with concern over Federal Reserve tapering, sent global stocks tumbling Monday. The MSCI All-Country World Index fell 1.6%, the most since July 19. Japan’s stocks joined the selloff Tuesday as investor concerns grew over China’s real-estate sector as well as Federal Reserve tapering, with the Nikkei 225 sliding 2.2% - its biggest drop in three months, catching up with losses in global peers after a holiday - after a four-week rally boosted by expectations for favorable economic policies from a new government. Electronics makers were the biggest drag on the Topix, which declined 1.7%. SoftBank Group and Fast Retailing were the largest contributors to a 2.2% loss in the Nikkei 225. Japanese stocks with high China exposure including Toto and Nippon Paint also dropped. “The outsized reaction in global markets may be a function of having too many uncertainties bunched into this period,” Eugene Leow, a macro strategist at DBS Bank Ltd., wrote in a note. “It probably does not help that risk taking (especially in equities) has gone on for an extended period and may be vulnerable to a correction.” “The proportion of Japan’s exports to China is greater than those to the U.S. or Europe, making it sensitive to any slowdown worries in the Chinese economy,” said Hideyuki Ishiguro, a senior strategist at Nomura Asset Management in Tokyo. “The stock market has yet to fully price in the possibility of a bankruptcy by Evergrande Group.” The Nikkei 225 has been the best-performing major stock gauge in the world this month, up 6.2%, buoyed by expectations for favorable policies from a new government and an inflow of foreign cash. The Topix is up 5.3% so far in September. In FX, the Bloomberg Dollar Spot Index inched lower and the greenback fell versus most of its Group-of-10 peers as a selloff in global stocks over the past two sessions abated; the euro hovered while commodity currencies led by the Norwegian krone were the best performers amid an advance in crude oil prices. Sweden’s krona was little changed after the Riksbank steered clear of signaling any post-pandemic tightening, as it remains unconvinced that a recent surge in inflation will last. The pound bucked a three-day losing streak as global risk appetite revived, while investors look to Thursday’s Bank of England meeting for policy clues. The yen erased earlier gains as signs that risk appetite is stabilizing damped demand for haven assets. At the same time, losses were capped due to uncertainty over China’s handling of the Evergrande debt crisis. In rates, Treasuries were lower, although off worst levels of the day as U.S. stock futures recover around half of Monday’s losses while European equities trade with a strong bid tone. Yields are cheaper by up to 2.5bp across long-end of the curve, steepening 5s30s spread by 1.2bp; 10-year yields around 1.3226%, cheaper by 1.5bp on the day, lagging bunds and gilts by 1bp-2bp. The long-end of the curve lags ahead of $24b 20-year bond reopening. Treasury will auction $24b 20-year bonds in first reopening at 1pm ET; WI yield ~1.82% is below auction stops since January and ~3bp richer than last month’s new-issue result In commodities, crude futures rose, with the front month WTI up 1.5% near $71.50. Brent stalls near $75. Spot gold trades a narrow range near $1,765/oz. Base metals are mostly in the green with LME aluminum the best performer Looking at the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD publishes their Interim Economic Outlook. Market Snapshot S&P 500 futures up 1.0% to 4,392.75 STOXX Europe 600 up 1.1% to 459.10 MXAP down 0.5% to 200.25 MXAPJ up 0.2% to 640.31 Nikkei down 2.2% to 29,839.71 Topix down 1.7% to 2,064.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.2% to 3,613.97 Sensex up 0.4% to 58,751.30 Australia S&P/ASX 200 up 0.4% to 7,273.83 Kospi up 0.3% to 3,140.51 Brent Futures up 1.6% to $75.13/bbl Gold spot down 0.1% to $1,761.68 U.S. Dollar Index little changed at 93.19 German 10Y yield fell 5.0 bps to -0.304% Euro little changed at $1.1729 Top Overnight News from Bloomberg Lael Brainard is a leading candidate to be the Federal Reserve’s banking watchdog and is also being discussed for more prominent Biden administration appointments, including to replace Fed chairman Jerome Powell and, potentially, for Treasury secretary if Janet Yellen leaves Federal Reserve Chair Jerome Powell will this week face the challenge of convincing investors that plans to scale back asset purchases aren’t a runway to raising interest rates for the first time since 2018 ECB Vice President Luis de Guindos says there is “good news” with respect to the euro-area recovery after a strong development in the second and third quarter The ECB is likely to continue purchasing junk-rated Greek sovereign debt even after the pandemic crisis has passed, according to Governing Council member and Greek central bank chief Yannis Stournaras U.K. government borrowing was well below official forecasts in the first five months of the fiscal year, providing a fillip for Chancellor of the Exchequer Rishi Sunak as he prepares for a review of tax and spending next month U.K. Business Secretary Kwasi Kwarteng warned the next few days will be challenging as the energy crisis deepens, and meat producers struggle with a crunch in carbon dioxide supplies The U.K.’s green bond debut broke demand records for the nation’s debt as investors leaped on the long-anticipated sterling asset. The nation is offering a green bond maturing in 2033 via banks on Tuesday at 7.5 basis points over the June 2032 gilt. It has not given an exact size target for the sale, which has attracted a record of more than 90 billion pounds ($123 billion) in orders Germany cut planned debt sales in the fourth quarter by 4 billion euros ($4.7 billion), suggesting the surge in borrowing triggered by the coronavirus pandemic is receding Contagion from China Evergrande Group has started to engulf even safer debt in Asia, sparking the worst sustained selloff of the securities since April. Premiums on Asian investment-grade dollar bonds widened 2-3 basis points Tuesday, according to credit traders, after a jump of 3.4 basis points on Monday Swiss National Bank policy makers watching the effects of negative interest rates on the economy are worrying about the real-estate bubble that their policy is helping to foster Global central banks need to set out clear strategies for coping with inflation risks as the world economy experiences faster-than-expected cost increases amid an uneven recovery from the pandemic, the OECD said A quick look at global markets courtesy of Newsquawk Asian equities traded cautiously following the recent downbeat global risk appetite due to Evergrande contagion concerns which resulted in the worst day for Wall Street since May, with the region also contending with holiday-thinned conditions due to the ongoing closures in China, South Korea and Taiwan. ASX 200 (+0.2%) was indecisive with a rebound in the mining-related sectors counterbalanced by underperformance in utilities, financials and tech, while there were also reports that the Byron Bay area in New South Wales will be subject to a seven-day lockdown from this evening. Nikkei 225 (-1.8%) was heavily pressured and relinquished the 30k status as it played catch up to the contagion downturn on return from the extended weekend with recent detrimental currency inflows also contributing to the losses for exporters. Hang Seng (-0.3%) was choppy amid the continued absence of mainland participants with markets second-guessing whether Chinese authorities will intervene in the event of an Evergrande collapse, while shares in the world’s most indebted developer fluctuated and wiped out an early rebound, although affiliate Evergrande Property Services and other property names fared better after Sun Hung Kai disputed reports of China pressuring Hong Kong developers and with Guangzhou R&F Properties boosted by reports major shareholders pledged funds in the Co. which is also selling key assets to Country Garden. Finally, 10yr JGBs were higher amid the underperformance in Japanese stocks and with the Japan Securities Dealers Association recently noting that global funds purchased the most ultra-long Japanese bonds since 2014, although upside was limited amid softer demand at the enhanced liquidity auction for 2yr-20yr maturities and with the BoJ kickstarting its two-day policy meeting. Top Asian News Richest Banker Says Evergrande Is China’s ‘Lehman Moment’ Hong Kong Tycoons, Casino Giants Find Respite in Stock Rebound Taliban Add More Male Ministers, Say Will Include Women Later Asian Stocks Drop to Lowest Level This Month; Japan Leads Losses European equities (Stoxx 600 +1.1%) trade on a firmer footing attempting to recoup some of yesterday’s losses with not much in the way of incremental newsflow driving the upside. Despite the attempt to claw back some of the prior session’s lost ground, the Stoxx 600 is still lower by around 1.6% on the week. The Asia-Pac session was one characterised by caution and regional market closures with China remaining away from market. Focus remains on whether Evergrande will meet USD 83mln in interest payments due on Thursday and what actions Chinese authorities could take to limit the contagion from the company in the event of further troubles. Stateside, futures are also on a firmer footing with some slight outperformance in the RTY (+1.2%) vs. peers (ES +0.8%). Again, there is not much in the way of fresh positivity driving the upside and instead gains are likely more a by-product of dip-buying; attention for the US is set to become increasingly geared towards tomorrow’s FOMC policy announcement. Sectors in Europe are firmer across the board with outperformance in Oil & Gas names amid a recovery in the crude complex and gains in Shell (+4.4%) after news that the Co. is to sell its Permian Basin assets to ConocoPhillips (COP) for USD 9.5bln in cash. Other outperforming sectors include Tech, Insurance and Basic Resources. IAG (+4.1%) and Deutsche Lufthansa (+3.8%) both sit at the top of the Stoxx 600 as the Co.’s continue to enjoy the fallout from yesterday’s decision by the US to allow travel from vaccinated EU and UK passengers. Swatch (-0.7%) is lagging in the luxury space following a downgrade at RBC, whilst data showed Swiss watch exports were +11.5% Y/Y in August (prev. 29.1%). Finally, National Express (+7.7%) is reportedly considering a takeover of Stagecoach (+21.4%), which is valued at around GBP 370mln. Top European News U.K. Warns of Challenging Few Days as Energy Crisis Deepens Germany Trims Planned Debt Sales as Pandemic Impact Recedes U.K.’s Green Bond Debut Draws Record Demand of $123 Billion Goldman Plans $1.5 Billion Petershill Partners IPO in London In FX, all the signs are constructive for a classic turnaround Tuesday when it comes to Loonie fortunes as broad risk sentiment improves markedly, WTI consolidates within a firm range around Usd 71/brl compared to yesterday’s sub-Usd 70 low and incoming results from Canada’s general election indicate victory for the incumbent Liberal party that will secure a 3rd term for PM Trudeau. Hence, it’s better the devil you know as such and Usd/Cad retreated further from its stop-induced spike to just pips short of 1.2900 to probe 1.2750 at one stage before bouncing ahead of new house price data for August. Conversely, the Swedish Krona seems somewhat reluctant to get carried away with the much better market mood after the latest Riksbank policy meeting only acknowledged significantly stronger than expected inflation data in passing, and the repo rate path remained rooted to zero percent for the full forecast horizon as a consequence. However, Eur/Sek has slipped back to test 10.1600 bids/support following an initial upturn to almost 10.1800, irrespective of a rise in unemployment. NOK/AUD/NZD - No such qualms for the Norwegian Crown as Brent hovers near the top of a Usd 75.18-74.20/brl band and the Norges Bank is widely, if not universally tipped to become the first major Central Bank to shift into tightening mode on Thursday, with Eur/Nok hugging the base of a 10.1700-10.2430 range. Elsewhere, the Aussie and Kiwi look relieved rather than rejuvenated in their own right given dovish RBA minutes, a deterioration in Westpac’s NZ consumer sentiment and near reversal in credit card spending from 6.9% y/y in July to -6.3% last month. Instead, Aud/Usd and Nzd/Usd have rebounded amidst the recovery in risk appetite that has undermined their US rival to top 0.7380 and 0.7050 respectively at best. GBP/CHF/EUR/JPY/DXY - Sterling is latching on to the ongoing Dollar retracement and more supportive backdrop elsewhere to pare losses under 1.3700, while the Franc continues its revival to 0.9250 or so and almost 1.0850 against the Euro even though the SNB is bound to check its stride at the upcoming policy review, and the single currency is also forming a firmer base above 1.1700 vs the Buck. Indeed, the collective reprieve in all components of the Greenback basket, bar the Yen on diminished safe-haven demand, has pushed the index down to 93.116 from 93.277 at the earlier apex, and Monday’s elevated 93.455 perch, while Usd/Jpy is straddling 109.50 and flanked by decent option expiry interest either side. On that note, 1.4 bn resides at the 109.00 strike and 1.1 bn between 109.60-70, while there is 1.6 bn in Usd/Cad bang on 1.2800. EM - Some respite across the board in wake of yesterday’s mauling at the hands of risk-off positioning in favour of the Usd, while the Czk has also been underpinned by more hawkish CNB commentary as Holub echoes the Governor by advocating a 50 bp hike at the end of September and a further 25-50 bp in November. In commodities, WTI and Brent are firmer in the European morning post gains in excess of 1.0%, though the benchmarks are off highs after an early foray saw Brent Nov’21 eclipse USD 75.00/bbl, for instance. While there has been newsflow for the complex, mainly from various energy ministers, there hasn’t been much explicitly for crude to change the dial; thus, the benchmarks are seemingly moving in tandem with broader risk sentiment (see equities). In terms of the energy commentary, the Qatar minister said they are not thinking of re-joining OPEC+ while the UAE minister spoke on the gas situation. On this, reports in Russian press suggests that Russia might allow Rosneft to supply 10bcm of gas to Europe per year under an agency agreement with Gazprom “as an experiment”, developments to this will be closely eyed for any indication that it could serve to ease the current gas situation. Looking ahead, we have the weekly private inventory report which is expected to post a headline draw of 2.4mln and draws, albeit of a smaller magnitude, are expected for distillate and gasoline as well. Moving to metals, spot gold is marginally firmer while silver outperforms with base-metals picking up across the board from the poor performance seen yesterday that, for instance, saw LME copper below the USD 9k mark. Note, the action is more of a steadying from yesterday’s downside performance than any notable upside, with the likes of copper well within Monday’s parameters. US Event Calendar 8:30am: Aug. Building Permits MoM, est. -1.8%, prior 2.6%, revised 2.3% 8:30am: Aug. Housing Starts MoM, est. 1.0%, prior -7.0% 8:30am: Aug. Building Permits, est. 1.6m, prior 1.64m, revised 1.63m 8:30am: Aug. Housing Starts, est. 1.55m, prior 1.53m 8:30am: 2Q Current Account Balance, est. -$190.8b, prior -$195.7b DB's Jim Reid concludes the overnight wrap Global markets slumped across the board yesterday in what was one of the worst days of the year as an array of concerns about the outlook gathered pace. The crisis at Evergrande and in the Chinese real estate sector was the catalyst most people were talking about, but truth be told, the market rout we’re seeing is reflecting a wider set of risks than just Chinese property, and comes after increasing questions have been asked about whether current valuations could still be justified, with talk of a potential correction picking up. Remember that 68% of respondents to my survey last week (link here) thought they’d be at least a 5% correction in equity markets before year end. So this has been front and centre of people’s mind even if the catalyst hasn’t been clear. We’ve all known about Evergrande’s woes and how big it was for a while but it wasn’t until Friday’s story of the Chinese regulatory crackdown extending into property that crystallised the story into having wider implications. As I noted in my chart of the day yesterday link here Chinese USD HY had been widening aggressively over the last couple of months but IG has been pretty rock solid. There were still no domestic signs of contagion by close of business Friday. However as it stands, there will likely be by the reopening post holidays tomorrow which reflects how quickly the story has evolved even without much new news. Before we get to the latest on this, note that we’ve still got a bumper couple of weeks on the calendar to get through, including the Fed decision tomorrow, which comes just as a potential government shutdown and debt ceiling fight are coming into view, alongside big debates on how much spending the Democrats will actually manage to pass. There has been some respite overnight with S&P 500 futures +0.58% higher and 10y UST yields up +1.5bps to 1.327%. Crude oil prices are also up c. 1%. On Evergrande, S&P Global Ratings has said that the company is on the brink of default and that it’s failure is unlikely to result in a scenario where China will be compelled to step in. The report added that they see China stepping in only if “there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.” The Hang Seng (-0.32%) is lower but the Hang Seng Properties index is up (+1.59%) and bouncing off the 5 plus year lows it hit yesterday. Elsewhere the ASX (+0.30%) and India’s Nifty (+0.35%) have also advanced. Chinese and South Korean markets are closed for a holiday but the Nikkei has reopened and is -1.80% and catching down to yesterday’s global move. Looking at yesterday’s moves in more depth, the gathering storm clouds saw the S&P 500 shed -1.70% in its worst day since May 12, with cyclical industries leading the declines and with just 10% of S&P 500 index members gaining. There was a late rally at the end of the US trading session that saw equity indices bounce off their lows, with the S&P 500 (-2.87%) and NASDAQ (-3.42%) both looking like they were going to register their worst days since October 2020 and late-February 2021 respectively. However, yesterday was still the 5th worst day for the S&P 500 in 2021. Reflecting the risk-off tone, small caps suffered in particular with the Russell 2000 falling -2.44%, whilst tech stocks were another underperformer as the NASDAQ lost -2.19% and the FANG+ index of 10 megacap tech firms saw an even bigger -3.16% decline. For Europe it was much the same story, with the STOXX 600 (-1.67%) and other bourses including the DAX (-2.31%) seeing significant losses amidst the cyclical underperformance. It was the STOXX 600’s worst performance since mid-July and the 6th worst day of the year overall. Unsurprisingly, there was also a significant spike in volatility, with the VIX index climbing +4.9pts to 25.7 – its highest closing level since mid-May – after trading above 28.0pts midday. In line with the broader risk-off move, especially sovereign bonds rallied strongly as investors downgraded their assessment of the economic outlook and moved to price out the chances of near-term rate hikes. By the close of trade, yields on 10yr Treasuries had fallen -5.1bps to 1.311%, with lower inflation breakevens (-4.1bps) leading the bulk of the declines. Meanwhile in Europe, yields on 10yr bunds (-4.0bps), OATs (-2.6bps) and BTPs (-0.9bps) similarly fell back, although there was a widening in spreads between core and periphery as investors turned more cautious. Elsewhere, commodities took a hit as concerns grew about the economic outlook, with Bloomberg’s Commodity Spot Index (-1.53%) losing ground for a third consecutive session. That said, European natural gas prices (+15.69%) were the massive exception once again, with the latest surge taking them above the peak from last Wednesday, and thus bringing the price gains since the start of August to +84.80%. Here in the UK, Business Secretary Kwarteng said that he didn’t expect an emergency regarding the energy supply, but also said that the government wouldn’t bail out failed companies. Meanwhile, EU transport and energy ministers are set to meet from tomorrow for an informal meeting, at which the massive spike in prices are likely to be discussed. Overnight, we have the first projections of the Canadian federal election with CBC News projecting that the Liberals will win enough seats to form a government for the third time albeit likely a minority government. With the counting still underway, Liberals are currently projected to win 156 seats while Conservatives are projected to win 120 seats. Both the parties are currently projected to win a seat less than last time. The Canadian dollar is up +0.44% overnight as the results remove some election uncertainty. Turning to the pandemic, the main news yesterday was that the US is set to relax its travel rules for foreign arrivals. President Biden announced the move yesterday, mandating that all adult visitors show proof of vaccination before entering the country. Airline stocks outperformed strongly in response, with the S&P 500 airlines (+1.55%) being one of the few industry groups that actually advanced yesterday. Otherwise, we heard from Pfizer and BioNTech that their vaccine trials on 5-11 year olds had successfully produced an antibody response among that age group. The dose was just a third of that used in those aged 12 and above, and they said they planned to share the data with regulators “as soon as possible”. Furthermore, they said that trials for the younger cohorts (2-5 and 6m-2) are expected as soon as Q4. In Germany, there are just 5 days left until the election now, and the last Insa poll before the vote showed a slight tightening in the race, with the centre-left SPD down a point to 25%, whilst the CDU/CSU bloc were up 1.5 points to 22%. Noticeably, that would also put the race back within the +/- 2.5% margin of error. The Greens were unchanged in third place on 15%. Staying with politics and shifting back to the US, there was news last night that Congressional Democratic leaders are looking to tie the suspension of the US debt ceiling vote to the spending bill that is due by the end of this month. If the spending bill is not enacted it would trigger a government shutdown, and if the debt ceiling is not raised it would cause defaults on federal payments as soon as October. Senate Majority Leader Schumer said the House will pass a spending bill that will fund the government through December 3rd and that the “legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022.” Republicans may balk at the second measure, given that it would take the issue off the table until after the 2022 midterm elections in November of that year. There wasn’t a great deal of data out yesterday, though German producer price inflation rose to +12.0% in August (vs. +11.1% expected), marking the fastest pace since December 1974. Separately in the US, the NAHB’s housing market index unexpectedly rose to 76 in September (vs. 75 expected), the first monthly increase since April. To the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD will be publishing their Interim Economic Outlook. Tyler Durden Tue, 09/21/2021 - 07:45.....»»

Category: blogSource: zerohedgeSep 21st, 2021

Vistra (VST) Increases Greenhouse Gas Emission Reduction Target

Vistra (VST) continues on its journey to achieve net-zero emission by 2050 and is well placed to reach its new emission reduction milestone set for 2030 from the 2010 baseline. Vistra Corp. VST has raised its greenhouse gas emission reduction target set for 2030 from the 2010 baseline. In 2020, the company set an emission reduction target of net zero by 2050 and lowered emission by 45% in the year from the 2010 levels. Currently, the company targets to achieve a 60% reduction in its Scope 1 and Scope 2 CO2 equivalent emissions by 2030 from the 2010 baseline. This new emission reduction target will assist the company to meet in net-zero carbon emission goal set for 2050.Path to Net-Zero EmissionVistra has already chalked out detailed plans for the transformation of its existing generation portfolio and is focused to add more clean assets in generation. At present, the company has nearly 4,000 megawatt (MW) of zero-carbon generation online or under development.  Vistra aims to add 9,000 MW of zero-emission generation in its production portfolio by 2030. The company will invest in solar plants and battery storage projects.Vistra has plans to shut down nearly 8,000 MW of its coal-fueled power plants by 2027 to reduce emission from its electricity generation process. By 2030, the company targets to produce nearly 90% of its electricity from low to zero carbon emission sources.Transition in Utility SpaceA clear transition is evident in the Utility space of the United States as an increasing number of utility operators on their own are setting net-zero emission targets in electricity production.  Per the International Energy Agency, to reach net-zero emissions by 2050, annual clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion. Utilities are making investment to adopt clean energy sources and are trying to find and produce electricity from commercially viable clean sources.   The ongoing development in technology and research and development, alternate sources of energy like wind, water, and solar power are being utilized to produce energy. The supportive legislation of the U.S. government has helped in the development and usage of clean energy sources.  Nuclear energy is also a clean energy source and with government support can be a solution to the emission problem. It generated more than 50% emission-free electricity in the United States in 2020.  Recently, Exelon Corporation EXC received regulatory support to continue operating its Byron and Dresden nuclear plants in Illinois, which were scheduled to shut down by end of this year.Utilities like Dominion Energy D and Duke Energy Corporation DUK, among an increasing group of utilities, have already pledged net-zero emission by 2050. Both these companies are focused to add more alternate clean sources of energy to produce electricity and lower emission.Price PerformanceIn the past six months, shares of the company have gained 3.6%, outperforming the industry’s rise of 1.6%. Image Source: Zacks Investment ResearchZacks RankVistra currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Exelon Corporation (EXC): Free Stock Analysis Report Duke Energy Corporation (DUK): Free Stock Analysis Report Dominion Energy Inc. (D): Free Stock Analysis Report Vistra Corp. (VST): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks2 hr. 24 min. ago

The Zacks Rank Explained: How to Find Strong Buy Oils and Energy Stocks

Wondering how to pick strong, market-beating stocks for your investment portfolio? Look no further than the Zacks Rank. Building a successful investment portfolio takes skill and hard work, no matter if you're a growth, value, income, or momentum-focused investor.How do you find the right combination of stocks that will generate returns that could fund your retirement, or your kids' college tuition, or your short- and long-term savings goals?Enter the Zacks Rank.What is the Zacks Rank?The Zacks Rank, which is a unique, proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, that makes building a winning portfolio easier.There are four main factors behind the Zacks Rank: Agreement, Magnitude, Upside, and Surprise.Agreement is the extent to which all brokerage analysts are revising their earnings estimates in the same direction. The greater the percentage of analysts revising their estimates higher, the better chance the stock will outperform.Magnitude is the size of the recent change in the consensus estimate for the current and next fiscal years.Upside is the difference between the most accurate estimate, which is calculated by Zacks, and the consensus estimate.Surprise is made up of a company's last few quarters' earnings per share surprises; companies with a positive earnings surprise are more likely to beat expectations in the future.Each factor is given a raw score, which is recalculated every night and compiled into the Zacks Rank. Utilizing this data, stocks are put into five different groups: Strong Buy, Buy, Hold, Sell, and Strong Sell.The Power of Institutional InvestorsThe Zacks Rank also allows individual investors, or retail investors, to benefit from the power of institutional investors.Institutional investors are responsible for managing the trillions of dollars invested in mutual funds, hedge funds, and investment banks. Research has shown that these investors can and do move the market due to the large amount of money they deal with, and thus, the market tends to move in the same direction as them.In order to figure out the fair value of a company and its shares, these investors will build valuation models focused on earnings and earnings expectations. Because if you raise estimates for the bottom line, it creates a higher fair value for a company.Institutional investors then act on these changes in earnings estimates, typically buying stocks with rising estimates and selling those with falling estimates; an increase in earnings estimates can translate into higher stock prices and bigger gains for the investor.Since it can often take weeks, if not months, for an institutional investor to build a position (given their size), retail investors who get in at the first sign of upward earnings estimate revisions have a distinct advantage over these larger investors, and can benefit from the expected institutional buying that will follow.Not only can the Zacks Rank help you take advantage of trends in earnings estimate revisions, but it can also provide a way to get into stocks that are highly sought after by professionals.How to Invest with the Zacks RankThe Zacks Rank is known for transforming investment portfolios. In fact, a portfolio of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 32 years, with an average annual return of +25.41%.Moreover, stocks with a new #1 (Strong Buy) ranking have some of the biggest profit potential, while those that fell to a #4 (Sell) or #5 (Strong Sell) have some of the worst.Let's take a look at Ovintiv (OVV), which was added to the Zacks Rank #1 list on September 23, 2021.Ovintiv Inc. is an independent energy producer, which explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Previously known as Encana, the company rebranded and shifted its corporate domicile from Calgary, Canada to Denver, U.S.  Three analysts revised their earnings estimate higher in the last 60 days for fiscal 2021, while the Zacks Consensus Estimate has increased $0.50 to $5.03 per share. OVV also boasts an average earnings surprise of 24.3%.Earnings are forecasted to see growth of 1337.1% for the current fiscal year, and sales are expected to increase 25.4%.Additionally, OVV has climbed higher over the past four weeks, gaining 12.6%. The S&P 500 is down 0.9% in comparison.Bottom LineWith a #1 (Strong Buy) ranking, positive trend in earnings estimate revisions, and strong market momentum, Ovintiv should be on investors' shortlist.If you want even more information on the Zacks Ranks, or one of our many other investing strategies, check out the Zacks Education home page.Discover Today's Top StocksOur private Zacks #1 Rank List, based on our quantitative Zacks Rank stock-rating system, has more than doubled the S&P 500 since 1988. Applying the Zacks Rank in your own trading can boost your investing returns on your very next trade. See Today's Zacks #1 Rank List >> 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 Ovintiv Inc. (OVV): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks2 hr. 24 min. ago

TotalEnergies SE Sponsored ADR (TTE) is a Top-Ranked Momentum Stock: Should You Buy?

The Zacks Style Scores offers investors a way to easily find top-rated stocks based on their investing style. Here's why you should take advantage. Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.Zacks Premium includes access to the Zacks Style Scores as well.What are the Zacks Style Scores?The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.The Style Scores are broken down into four categories:Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.How Style Scores Work with the Zacks RankThe Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.That's where the Style Scores come in.To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.Stock to Watch: TotalEnergies SE Sponsored ADR (TTE)France-based TotalEnergies SE is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has operations in more than 130 countries across five continents. The company was founded in 1924. The company has changed its name from TOTAL SE to TotalEnergies SE, which better reflects its transition toward a broad energy company. The new trading symbol of the company is TTE.TTE is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.Momentum investors should take note of this Oils-Energy stock. TTE has a Momentum Style Score of A, and shares are up 3.3% over the past four weeks.Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2021. The Zacks Consensus Estimate has increased $0.42 to $5.35 per share. TTE boasts an average earnings surprise of 75.4%.With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, TTE should be on investors' short list. 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 TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacks2 hr. 24 min. ago

Eni"s (E) Versalis Acquires Full Ownership of Finproject

The Finproject acquisition will fortify Eni's (E) chemical company Versalis' position in a volatile chemical industry. Eni SPA’s E chemical company, Versalis, recently inked a deal to acquire the remaining 60% of the Marche, Italy, based industrial group Finproject. In July, 2020, Versalis had bought 40% of Finproject, which operates in the compounding sector and produces ultralight products.The subsidiary of Eni exercised the purchase option, the transaction of which is likely to close in the fourth quarter of this year. The move is anticipated to make Versalis a major player in the high-performance formulated polymers spectrum. Products from Finproject are used for making consumer goods. It markets the ultralight expanded materials under the XL EXTRALIGHT® brand.The acquisition will strengthen Versalis’ position in the volatile chemical industry. It is likely to boost the company’s global market reach. Integrating Versalis’ innovative technological solutions to Finproject’s prospects will enable the company to serve sectors like renewable energy, construction, automotive, and fashion and designing. Renewable and recycled raw materials are used in Finproject, which is in line with Eni’s drive toward a sustainable and circular economy.Eni’s petrochemical product sales are improving. In fact, it increased 12% year over year to 1.14 million tons for the second quarter of 2021. As demand for energy products is expected to further rise in the second half of 2021 and beyond, the Finproject buyout is likely to enable Eni to generate higher profits from chemicals.Price PerformanceEni’s shares have increased 59.8% in the past year compared with the industry’s rise of 50.7%.Image Source: Zacks Investment ResearchZacks Rank & Other Key PicksThe company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the energy space include Cheniere Energy, Inc. LNG, Kinder Morgan, Inc. KMI and Royal Dutch Shell plc (RDS.A), each having a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Cheniere Energy’s bottom line for 2021 is pegged at $2.98 per share, indicating a massive improvement from the year-ago loss of 34 cents.Kinder Morgan’s bottom line for 2021 is expected to rise 47.7% year over year.The consensus mark for Shell’s earnings for 2021 stands at $5.07 per share, indicating a major increase from the year-ago figure of $1.24. 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 Royal Dutch Shell PLC (RDS.A): Free Stock Analysis Report Eni SpA (E): Free Stock Analysis Report Cheniere Energy, Inc. (LNG): Free Stock Analysis Report Kinder Morgan, Inc. (KMI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks2 hr. 24 min. ago

Nucor (NUE) to Construct $100 Million Melt Shop in Western U.S

Nucor's (NUE) new melt shop will help the company to maintain its market leading position in steel bar production and meet anticipated demand growth for bar products from its customers. Nucor Corporation NUE recently announced that its board has approved the construction of a new melt shop at one of its existing bar mills in the Western United States. The new $100-million melt shop is expected to have a manufacturing capacity to manufacture 600,000 tons annually and create roughly 140 new full-time jobs, with start-up expected in 2024.Nucor has 15 bar mills tactically sited across the United States, which produce a wide array of steel products, including concrete reinforcing bars, hot-rolled bars, rounds, light shapes, structural angles, channels, wire rod as well as highway products in carbon and alloy steels.Four of the bar mills are focused on producing SBQ and wire rod products. The steel manufactured by Nucor bar mills serves numerous end markets, including the agricultural, automotive, construction, energy, furniture, machinery, metal building, railroad, recreational equipment, shipbuilding, heavy truck and trailer market segments. Nucor's bar steel capacity is estimated to be roughly 9.5 million tons annually.The new melt shop will help Nucor maintain its market leading position in steel bar production and facilitate it to meet anticipated demand growth for bar products from  customers in the Western United States.Shares of Nucor have gained 117.2% in the past year compared with a 100.1% surge of the industry.Image Source: Zacks Investment ResearchNucor recently announced guidance for third-quarter 2021. It expects the quarter’s earnings between $7.30 and $7.40 per share. The company is gearing up to report the highest quarterly earnings ever in its history, surpassing the prior record of earnings per share (EPS) of $5.04 in second-quarter 2021.This upbeat outlook is backed by strong demand across most of Nucor’s end-markets and higher average selling prices, which is driving  strong profitability in all of the three segments. The company expects the steel products segment to generate significantly higher earnings in the third quarter, owing to margin expansion arising from higher average selling prices.Nucor Corporation Price and Consensus  Nucor Corporation price-consensus-chart | Nucor Corporation Quote Zacks Rank & Other Key PicksNucor currently sports a Zacks Rank #1 (Strong Buy).Some other top-ranked stocks in the basic materials space are Reliance Steel & Aluminum Co. RS, The Chemours Company CC and Olin Corporation OLN.Reliance Steel has a projected earnings growth rate of around 147.7% for the current year. The company’s shares have soared 41% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.Chemours has an expected earnings growth rate of around 86.4% for the current year. The company’s shares have gained 36.6% in the past year. It currently flaunts a Zacks Rank #1.Olin has an expected earnings growth rate of around 639.3% for the current fiscal. The company’s shares have surged 302.6% in the past year. It currently carries a Zacks Rank #2 (Buy). 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 Nucor Corporation (NUE): Free Stock Analysis Report Reliance Steel & Aluminum Co. (RS): Free Stock Analysis Report Olin Corporation (OLN): Free Stock Analysis Report The Chemours Company (CC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks2 hr. 24 min. ago

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

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

Category: topSource: zacks2 hr. 24 min. ago

4 Sector ETFs Gaining Double Digits Amid September Selling

We have highlighted four that have gained in double-digits over the past month and could be compelling picks in the weeks ahead even if September selling continues. With only a few trading days left, September, known for being a weak month for stock markets, has turned out to be brutal given a myriad of woes. These include concerns over accelerating coronavirus infections, renewed inflation fears, signs of a slowdown in China, potential for high corporate tax rates and Fed’s tapering worries.Concerns over the financial contagion of the potential failure of China’s Evergrande property group and the ongoing debates over the debt limit in Washington also made investors’ jittery early this week. But these worries seemed to ease with the China Evergrande deal on some of its looming debt payments as well as the House passing a bill to avert government shutdown.Notably, the S&P 500 Index logged in its worst day on Sep 20 since May 12 after three consecutive weekly declines. Every sector in the index is on track to end the month in negative territory for the first time since March 2020. Meanwhile, the five biggest tech titans — including Microsoft MSFT, Google-owner Alphabet GOOGL, Amazon.com AMZN, Apple AAPL, and Facebook FB collectively shed more than $500 billion since the Nasdaq 100 peaked on Sep 7 (read: September's Weak History Turning True: 5 ETF Buying Zones).The S&P 500 has dropped 3.7% so far in September, dragged down by a 7.2% decline in the materials sector. If the loss persists for the remaining trading days of the month, it will be the index’s first monthly decline since January.In such a scenario, a few sector ETFs are still trading in green. We have highlighted four that have gained in double-digits over the past month and could be compelling picks in the weeks ahead even if September selling continues.North Shore Global Uranium Mining ETF URNM – Up 44.9%Uranium stocks have been on a tear buoyed by growing social media attention, restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by COVID-19 pandemic related production cuts (read: Why Uranium Stocks & ETFs are Going Nuclear).This ETF provides exposure to companies that are involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee. The ETF holds 35 stocks in its basket with a heavy concentration on the top two firms accounting for a combined 27.3% share while other make up for no more than 9.7% share. It has accumulated $780.1 million in its asset base and trades in a good volume of 298,000 shares per day on average.SonicShares Global Shipping ETF BOAT – Up 12.2%The global shipping industry is enjoying a smooth sailing due to supply chain disruptions around the world caused by the pandemic. Port congestion and delays are the primary drivers as the pandemic has halted the movement of ships and will continue to do so at least in the near term.BOAT provides pure-play exposure to the global maritime shipping industry by tracking the Solactive Global Shipping Index. The index consists of global shipping companies engaged in the maritime transportation of goods and raw materials, including consumer and industrial products, vehicles, dry bulk, crude oil and liquefied natural gas. The product holds 53 stocks in its basket with heavy concentration on the top two firms at 10% share each. It has amassed $10.1 million in its asset base since its inception last month and charges 69 bps in annual fees. The fund trades in average daily volume of 17,000 shares (read: What's Behind the Smooth Sailing of the Top ETF of 2021?).Invesco DWA Energy Momentum ETF PXI – Up 11.5%The energy sector has gained momentum on oil price surge driven by tightening supply and expectations of an increase in demand as vaccination roll-outs widen. While many of the energy ETFs have been rising, PXI is the biggest beneficiary. This fund tracks the Dorsey Wright Energy Technical Leaders Index, which is designed to identify companies that are showing relative strength (momentum). It charges 60 bps in annual fees and trades in a good volume of 139,000 shares a day on average. The fund has 36 stocks in its basket with each making up for less than 4.8% of assets and AUM of $64.1 million. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.Simplify Volt Fintech Disruption ETF VFIN – Up 10.1%Digitalization has been powering this niche ETF. It seeks to offer exposure to the most disruptive fintech companies that are on the forefront of cashless payments. It aims to invest close to 25% across Square (SQ) stock and Square call options while targeting 25% in Lemonade (LMND) stock and Lemonade call options. A modest put option overlay is designed to help mitigate sharp market crashes. The product has accumulated $2.7 million since its inception in late December and charges 0.95% in annual fees. It trades in an average daily volume of 2,000 shares. 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 Invesco DWA Energy Momentum ETF (PXI): ETF Research Reports North Shore Global Uranium Mining ETF (URNM): ETF Research Reports Simplify Volt Fintech Disruption ETF (VFIN): ETF Research Reports SonicShares Global Shipping ETF (BOAT): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks2 hr. 24 min. ago

Futures Rise On Taper, Evergrande Optimism

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

Category: blogSource: zerohedge2 hr. 24 min. ago

Uranium Is Gaining Interest On Reddit"s Most Notorious Investment Forum

Uranium Is Gaining Interest On Reddit's Most Notorious Investment Forum Authored by Haley Zaremba via OilPrice.com, Nuclear advocates point out that the much-maligned form of energy production is actually one of the safest out there. And, importantly, nuclear energy production has a virtually nonexistent carbon footprint. It’s a highly efficient form of climate-friendly energy production, and yet it’s still a hard sell. Nuclear power plants are being decommissioned around the world, and have particularly fallen out of favor in the United States. But nuclear still has a lot of fans who make a lot of compelling points, and they are intent on making themselves heard.  While high-profile nuclear disasters like Chernobyl, Fukushima Daiichi, and Three Mile Island loom large in the public consciousness, and the long half-life of radioactive nuclear waste is a hard pill to swallow, nuclear energy actually kills far fewer people than fossil fuels. “Coal power is estimated to kill around 350 times as many people per terawatt-hour of energy produced, mostly from air pollution, compared to nuclear power,” as CNET is quick to point out.  Already, nuclear energy has played a huge role in avoiding carbon emissions over the last 50 years. In fact, it’s second only to hydropower in this arena. “Nuclear power is a low-carbon energy source that has avoided about 74Gt of CO2 emissions over this period, nearly two years’ worth of total global energy-related emissions,” a recent UN report stated. Although nuclear has yet to be widely adopted as a major part of the global response to climate change, there are plenty of nuclear advocates who believe that the nuclear revolution is just around the corner, and they want to get in on the ground floor. Indeed, new swaths of investors and buyers interested in the future of nuclear energy have recently sent uranium prices through the roof. It’s a story of intrigue, stockpiling, and Reddit.  A Canadian physical uranium trust is largely to blame for the recent surge in uranium prices and demand. Toronto-based Sprott Asset Management opened their doors just a couple months ago in July, and rapidly set about snapping up enormous physical quantities of yellowcake uranium. “The fund has amassed almost 25 million pounds of the metal since it was first launched in July and bought 850,000 pounds on one day alone last week,” MarketWatch reported on September 13. This is a truly astronomical quantity when you compare it to the total mined supply of uranium in the entire world, which stood at approximately 120 million pounds in 2019, according to figures from the World Nuclear Association. This buying frenzy has sent the price of raw uranium through the roof, shooting up 60% to a nine-year high in the months since Sprott launched. Now, Reddit’s r/WallStreetBets, the very same online community that launched previously failing GameStop stocks into the stratosphere and turned markets on their heads earlier this year, is jumping on the uranium bandwagon and buying up shares of uranium mining companies. The subreddit is currently abuzz with threads about the tight uranium market and the massive potential for growth as nuclear expands to meet increasing demand for clean energy against the backdrop of climate change.  Earlier this summer, the Intergovernmental Panel on Climate Change (IPCC) released it’s 6th Assessment Report on the state of global warming and announced a “code red for humanity.” Worldwide we have passed a point of no return, irreversibly altering weather patterns. But there is still a slim window of time to mitigate those effects and avoid catastrophic climate change. There is no silver bullet solution to cleaning up the global energy industry overnight. In order to meet emissions goals, all low-carbon options will have to be included and expanded. Nuclear, for all its struggles and bad optics, will likely be an integral piece of that puzzle. Tyler Durden Thu, 09/23/2021 - 11:00.....»»

Category: blogSource: zerohedge2 hr. 24 min. ago

Advertisers demand agencies prove their eco credentials

In this week's Insider Advertising newsletter we're covering sustainability metrics in RFPs, supply-chain issues for ad plans, and Facebook's comms. Hello and welcome back to Insider Advertising, your weekly look at the biggest stories and trends affecting Madison Avenue and beyond. I'm Lara O'Reilly, Insider's media and advertising editor. If this was forwarded to you, sign up here.As we gear up for the big holiday quarter, Facebook advertisers are already experiencing their nightmare before Christmas as Apple's recent privacy changes take effect. In a blog post Wednesday, Facebook said some advertisers' post-iOS 14 difficulties were hitting harder than they had expected. Some of those issues could be attributed to Facebook underreporting conversions on iOS devices by about 15%, the company said. Direct-to-consumer and so-called performance advertisers in particular are bracing for a bumpy Q4.Let's get you caught up on this week's other big advertising news:Marketers are pushing their ad agencies to be eco-friendlySupply-chain shortages are affecting ad plansFacebook is embarking on a more defensive comms approachIt's not easy being green Investors can make this happen, if they want to. Frank Bienewald/LightRocket via Getty Images It's been a little over five years since big brands like General Mills and HP made headlines by setting out requirements for their ad agencies to diversify their workforces.Now, an increasing number of advertisers are also asking agencies pitching for their business to lay out their sustainability commitments, the Insider correspondent Patrick Coffee reports, quoting one agency exec who said it's now part of every pitch.But while sustainability metrics are now front and center of many RFPs, I'd wager that few advertisers are at the point where they can audit compliance with the promises being made."It's an important part of any process, but many of the areas can be quite challenging on an ongoing basis," Ryan Kangisser, the managing partner of strategy at the media-advisory firm MediaSense, told me. What's more, as the coronavirus pandemic forced nearly all businesses to significantly rev up their e-commerce operations, some advertisers could do well with turning the mirror back on themselves. Global delivery volume records that were set last year are likely to be smashed once again in the holiday quarter."As e-commerce gets bigger, we all have to recognize the energy and power required to fuel all the e-commerce sites and clicks and transactions that are exponentially exploding at the moment," said Richard Robinson, a managing director of the pitch consultancy Oystercatchers.Yet, Robinson said, when brands are leaned on to ask who is ultimately responsible for sustainable e-commerce within their companies - The CMO? CDO? IT? Supply chain? - many execs still don't have a solid answer."The e-commerce kahuna is everyone's inconvenient secret at the moment," Robinson added.Hey big spenderAs e-commerce spending continues to soar through 2021 and beyond, so too is retailer spending on digital ads.Retail has long been the biggest-spending sector on digital ads in the US - which makes sense, as it's the category with the clearest visibility about whether the ads drove a sale. eMarketer; Taylor Tyson/Insider Insider Intelligence forecasts US retailer digital ad spending will blast through the $50 billion mark in 2022 - "a mark that no other industry will approach in the next couple of years," the Insider-owned research company's analysts wrote. In fact, Insider Intelligence doesn't predict any other single category will spend more than $20 billion in digital ads a year until 2023.In the meantime, retailers and e-commerce companies like Walmart, Target, and Instacart are busily building their own ad businesses and taking on the market leader Amazon by using their valuable first-party data to help advertisers target the shoppers most likely to buy their products. Insider Intelligence estimates that US retail media ad spending will grow almost 28% to reach $24 billion this year.You can't always get what you want FILE PHOTO: A General Motors assembly worker works on assembling a V6 engine, used in a variety of GM cars, trucks and crossovers, at the GM Romulus Powertrain plant in Romulus, Michigan, U.S. August 21, 2019. Rebecca Cook/File Photo Insider's senior reporter Lauren Johnson reports: Supply-chain issues are affecting ad spend, Ad Age reported, and it's not just mom and pops grappling to stock their shelves.Automakers like GM are also contending with big issues that make it hard to get their products to people, and big names are cutting advertising spend as a result, according to four agency sources who handle ad buying for the auto industry.One ad buyer said GM brands like Ford and Chevy, as well as the Dutch automaker Stellantis, cut ad spend earlier this year in response to computer-chip shortages that slashed production cycles, adding that car brands shifted their messaging from selling new vehicles to encouraging people to buy used cars at local dealerships. Representatives for Ford, Chevy, and Stellantis did not respond to requests for comment.Agency sources said that such cuts had hit mostly TV advertising and that in cases in which only some of a brand's products were unavailable, advertisers redirected digital ad spend to promote in-stock items with performance tactics like programmatic advertising that can track sales of products.Read more: KFC isn't advertising chicken tenders on TV because of supply-chain shortagesSorry seems to be the hardest word Facebook CEO Mark Zuckerberg in New York City on Friday, October 25, 2019. AP Photo/Mark Lennihan A few years ago, as sure as spring would turn to summer and summer to fall, it felt as if the latest Facebook mea culpa was only ever a few months away. (The Washington Post even made a handy timeline.) Yet while Facebook has been significantly ramping up its own ad spend of late, don't expect to see any more full-page apology ads from the social network in your favorite newspaper anytime soon.As The New York Times reported, amid the weight of negative scrutiny on the company, Facebook's communications execs are pressing on with a different strategy: No more apologies.That attack-dog approach has been in plain view following The Wall Street Journal's explosive "Facebook Files" investigative series, which uncovered a litany of serious issues on that platform that the company appears to be aware of but has failed to fully address.Facebook's vice president of global affairs, Nick Clegg, fired back with his "What the Wall Street Journal Got Wrong" blog post. Mark Zuckerberg, who personally hasn't responded to The Journal's reporting, instead wagged his finger at The Times for implying he had posted a video of himself riding an "electric surfboard" instead of a hydrofoil. Over on Twitter, a Facebook representative sought to play down The Times' reporting of "Project Amplify," the social network's initiative to show people positive stories about the company on the platform.Meanwhile, the heat on Facebook shows no sign of petering out:Another Facebook ad boycott could be around the cornerSenators said they'd investigate Facebook's internal research into Instagram's effects on the mental health of young usersOne of Wall Street's top internet analysts says Facebook and Instagram user satisfaction just dropped to all-time lowsRecommended readingWaze CMO Erin Clift has left amid leadership shake-up at the Google-owned company - InsiderRoku is rolling out a new tool to compete with Facebook and Google for the $16 billion local advertising market - InsiderAT&T CEO John Stankey says he's unhappy with the company's brand and is planning a more future-facing refresh - CNBCVideoAmp has begun testing its cross-platform TV- and video-measurement ratings alternative with five major ad holding companies - CampaignAudi is looking for a new ad agency to handle its $185 million ad business - InsiderTikTok insiders describe how parent company ByteDance's culture principles, called 'ByteStyles,' are used to reward and reprimand - InsiderSee you next week - and in the meantime please do continue sending your feedback and news tips for this newsletter to loreilly@insider.com Read the original article on Business Insider.....»»

Category: topSource: businessinsider5 hr. 8 min. ago

Exro: An Opportunity In Electrified Mobility

“We want to be the agnostic arms merchant to the fiber optic industry” – Kevin Kalkhoven of Uniphase to David Schneider in 1996 Q2 2021 hedge fund letters, conferences and more Investors seek similar situation for the electrified mobility industry Form Factors for Electrified Mobility Form factors include buses, motorcycles, snowmobiles, off-road vehicles/trucks from small […] “We want to be the agnostic arms merchant to the fiber optic industry” – Kevin Kalkhoven of Uniphase to David Schneider in 1996 .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 Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio 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); Q2 2021 hedge fund letters, conferences and more Investors seek similar situation for the electrified mobility industry Form Factors for Electrified Mobility Form factors include buses, motorcycles, snowmobiles, off-road vehicles/trucks from small to very large passenger vehicles and boats. Highlights of Company Capabilities Its technology advantages: Agnostic to battery chemistry, work for all segments (buses, RVs, motorcycles, snowmobiles, off-road vehicles/trucks and boats) Implementation can reduce number of parts in the vehicle, save money, reduce weight, improve reliability Increase efficiency of motor/battery system for better driving performance Increase miles per charge regardless of form factor $ content per vehicle correlates with size of vehicle Large and growing patent portfolio Implementation of their technology by one player in a segment would create a step function improvement in the vehicle, forcing competitors to adopt their technology or cobble together alternative Company Leadership – Pedigrees from GE Motor, International Rectifier, Siemens, Ballard Power, Ford, Audi, Volkswagen, GM, Vision Marine (electric boats) First commercial revenues likely early 2012 with motorcycle form factor First pure play creating an “ecosystem” of electrification subsystems that work together Company Financials Method for guesstimate of future numbers: Estimate gross profit per unit encompassing all form factors from electric bike to trucks Assume outsourced manufacturing for scale, subtract a high amount for corporate expenses, apply a tax rate and assume we are looking at 2025 Assume free cashflow = net income annually. * Far left column assumes units sold globally, company has enough cash for next 18 months Exro, A Pioneer In Mobile Electrification Exro Technologies Inc, traded in Canada as TSE:EXRO and bulletin board in US as OTCMKTS:EXROF with a market cap of US $310M The product is the coil-driver Its technology Continual optimization of the relationship between torque and speed of the motor Improves efficiency of the system to where in a multi-motor system a motor might be eliminated completely Replacement of moving parts with electronics reduces weight and increases reliability- perfect example :  Why the Porsche Taycan's Two-Speed Gearbox Is Such a Big Deal | WIRED Partnerships Land Motorcycles: for next generation models Zero Motorcycles: for next generation models (Zero is also partner of Polaris for next generation of Polaris electrified vehicles. Templar: Boating application Aurora Powertrains: Snowmobiles Clean Seed Capital: Farm Equipment Sea Electric: Fleet (truck) Vehicles Heinzmann: Auto, truck, e-bike motors Heinzmann is a tier 1 auto supplier Vicinity Motor: Buses Potencia Industrial (Mexico): Industrial and automotive Linimar Corp: Auto parts Advantages Of Exro Technologies From the point of zero motion to moving, you need torque As you get closer to cruising speed, the need for torque drops and you just need to maintain that speed. Encounter a hill, you need torque again. Exro has created a system that manages that relationship between torque and speed This optimizes torque and speed to maximize the efficiency of the motor, and in turn reduces the needs on the battery. Using the coil driver replacesmechanical parts, reduces weight of the vehicle, increases miles/charge, reduces cost Lighter vehicle = more range, better performance Because Exro reduces the cost of the finished product, they have a pricing umbrella that should give the company premium margins in an outsourced manufacturing model How Does The Coil Driver Work? The product consists of electronics in a box that is software driven. They change the coil configuration of the motor on the fly, with the inputs based on vehicle weight, grade of the road, and need for acceleration. The technology has the greatest impact on the largest vehicles and/or those dealing with a terrain such as hills and valleys, and situations with the biggest torque ranges. This makes sense, a reason why they are working with an ATV and snowmobile companies. Another great example for Exro technology is buses. The weight varies with number of passengers, lots of starts and stops, and have to navigate with slope and terrain. Garbage trucks and UPS type of delivery vehicles also. Additional Functionality Exro received new patents in July, 2021 for a new capability Electric vehicles (EVs) require 3 different types of power electronics to power the vehicle in motion and charge the batteries: A motor drive, on-board charger and external DC fast charger. The coil driver can replace all 3 components, reducing cost and complexity of deploying EV’s and simplifying the required infrastructure for charging. Just another example of reducing complexity of the vehicle, pulling out costs. Business Potential Business potential: No partner company has gotten an exclusive deal with EXRO – example they are working with 2 motorcycle companies (ZERO Motorcycles and Land Motorcycles). In an interview with CEO of Polaris (2’50” of the below link), he mentioned partnership with Zero Motorcycles. Anybody make the connection of where ZERO is getting their next generation technology from? Apparently not. Will It Sell? You are in the market for an electric car, boat, or motorcycle. You are having a tough time deciding between two brands, one with Exro, another without. With Exro inside, you realize: 20% more miles per charge, charge at home most of the time, fewer parts so more reliable. – clear competitive advantage. When the adoption of the technology gains traction which in my opinion will be mid 2022, investors won’t care if the hockey stick of revenue and earnings takes off in 2024 or even 2025. Hurdles To Adoption And Commercialization Coil Driver needs be perfectly connected to the motor, need to test, test, and test. New Kid on the block intersecting with big fish with “not invented here” syndrome. OEM’s and Tier 1 suppliers may have existing multi-year supplier deals that need to expire before introducing EXRO application First commercialization will be with nimbler OEM’s that produce motorcycle, off road vehicles. Established Automotive OEM’s due to supply chain logistics are already locking down model year ‘23, so even if an OEM signed with Exro tomorrow, earliest we would see Exro in a major brand vehicle would be ‘24 models. But, I would not be surprised to see a major name come onboard in the next 6-9 months. Investment Summary The elimination of heavy moving parts creates instant cost savings for an OEM. This translates to an increase in overall reliability, and should an issue arrive with the Exro component, it can be easily accessed and/or diagnosed electronically. In one video on YouTube, an electric bus company said they will be trialing EXRO at the end of this year and they expect a 20-30% increase in miles per charge. Lithium: With the world fixated on access to lithium and as the price of lithium increases, there will be more focus on optimizing the electrical system. As the lithium price rises, a technology that allows for fewer cells/battery pack should be welcomed. Charging Stations: Companies are building out recharging stations all over the world. Why not do it at home? With Exro built into the vehicle, you will be able to plug your vehicle into a regular 115v outlet. With the increased range of the vehicle between charges, you won’t need to go to an outside recharge station unless driving a very long distance. A great selling point for an automotive OEM. Company Financials 2025 *Far left column assumes units sold globally, company has enough cash for next 18 months Based on $662 million net income on 3 million units, 130 million shares = $5.09 in EPS. More conservatively cut it down to $4.00 in EPS, push it out to 2026 earnings. Current stock price = $2.25 and Exro has enough cash for 18-24 months. News of an OEM deal could move the decimal point on the stock price at which point I would hope they would issue 2-3 million new shares. That would be all they need until the cash starts to roll in. But Exro could get cash up front in signing a major OEM on a non-exclusive license deal, reducing the need for any equity offering. Battery Control System (BCS) Exro also has a Battery Control System for use when battery packs reach the end of their life. They optimize the batteries for use as energy storage systems. Energy storage system can be grid connected and/or used as a backup power supply for business and homes. They are targeting commercial launch is 2022. They are doing a demo at the North American Battery Show on 9/14 Incorporation of any upside from the BCS is icing on an already target rich cake. Updated on Sep 22, 2021, 9:51 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: valuewalk16 hr. 40 min. ago

How to Be a Great Long-Term Stock Investor

Tracey shares her tips on how to be a buy-and-hold stock investor in a time when everyone is trading. (0:45) - Buy and Hold Stock Strategy: The Power of Compounding(6:50) - Tips To Manage Your Portfolio For The Long Term(14:00) - What Type of Stocks Should You Be Buying?(23:45) - Episode Roundup: AMZN, SBUX, FB, IBM, NVDA, PYPL, EL, NFLX                Podcast@Zacks.com Welcome to Episode #286 of the Zacks Market Edge Podcast.Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.This week she’s going solo to share her best tips on how to be a great long-term stock investor.Have You Ever Owned a Stock for an Entire Year?The average time for most stock investors to hold a stock is now about 5 ½ months, down from 18 months pre-pandemic.That means for most investors, the thought of owning a stock for 5 or 10 years is very foreign. And investors will get out at even a hint of non-performance.Amazon AMZN soared in 2020 after the coronavirus sell-off, gaining 74% between Mar 9 and Nov 9. But in 2021, shares haven’t gone anywhere, adding only 3.4% for the year.How many investors have stayed in the stock this year?Are you considering selling because other stocks are performing better even though you consider yourself a long-term investor?3 Tips for Long-Term Investors1.       Don’t look at your portfolio every day. There’s no reason to see how much money you are making, or losing, every single day. This is short-term thinking. It will distract you from your long-term investing goals.2.       Buy some stocks that pay dividends. We all like getting “free” money. If you get a stock that stagnates for a year or more, getting a dividend can help smooth over some of the pain. For example, Starbucks SBUX stock went nowhere from 2016 to 2019. In those 3 years, it was up just 5.9% compared to the S&P 500 which gained 27%. However, it paid a dividend, which at that time was yielding around 3%. Not too shabby. It eased some of the pain until the stock finally broke out to new highs in the last 2 years.3.       Dollar cost average on sell-offs. In 2018, Facebook FB was hit with all those issues surrounding privacy concerns. From July 2018 to January 2019, shares fell 33%. It presented a buying opportunity for long-term investors to add more shares “on sale.”Be diverse in your portfolio. Own at least 10 individual stocks because you likely won’t be able to pick all winners.For example, Warren Buffett bet big on IBM IBM a decade ago but then sold his position as it wasn’t performing as he hoped. From Sep 2011 to Sep 2021, IBM shares have actually declined 23% while the rest of the market was up big.However, he owned plenty of other stocks that helped ease the pain of being in a stock that didn’t perform.Additionally, you don’t need to buy in at the IPO to do well as a long-term investor.While Netflix NFLX shares are one of the best performers of the last 20 years, if you bought it in 2012, 10 years after its IPO, you would still be up 7300%.What else should you know about how to be a great long-term investor?Tune into this week’s podcast to find out.[In full disclosure, Tracey owns shares of AMZN, SBUX, and FB in her personal portfolio.] 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 Amazon.com, Inc. (AMZN): Free Stock Analysis Report International Business Machines Corporation (IBM): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report Starbucks Corporation (SBUX): Free Stock Analysis Report Facebook, Inc. (FB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks18 hr. 52 min. ago

September Swoon Just Getting Started: Dial In Your Buy Targets

Sell-off is unfolding and even a "lovey-dovey" Fed won't save it. In short-term trading, you know what's better than having high accuracy in your "predictions?"It's having a robust method for evaluating risk, reward, and volatility so that you can place appropriate odds, and bet sizes, on possible outcomes.I call my method "Scenarios & Probabilities," and it's served me well for over a decade in the stock market.Right now, the market is fulfilling a few of my early scenarios in the path to a bigger decline.It all started with this view from two weeks ago that I gave Zacks Ultimate members after Labor Day, and then recapped in a video and article on Sep 9...September Swoon Targets: Where to Buy the DipOn 9/14, I told my group this...Raising cash last week was definitely the right call because this slow-motion roll-over could easily turn into a big gap down one morning.And that will trap lots of longs who didn't see it coming.On 9/20, I wrote about "The Gap That Traps"...So, here we are. The SPX has now broken clean through the first support at 4370.Also recall that I said "any catalyst will do." The financial headlines are filled with "Evergrande! Evergrande! Chinese real estate contagion!"But we knew that any catalyst would do.Bounce or Pounce: Which Comes First?With a pivotal Fed meeting starting tomorrow, I can confidently say the SPX will most likely test today's low at 4305 -- and probably lower -- before it fills that gap up above 4400.How sure am I? I'd give 3 to 1 odds.In other digits, 1 chance in 4 we rally right after the Fed meeting.So that's a big fat NO to a meaningful bounce any time soon.Because that would take something extraordinary from that meeting (like a "no-taper, ZIRP-forever" kinda promise).Plus, to differentiate itself from the 4 prior bounces off the 50-day (in May, June, July, August), this plunge well through it makes this "the gap that traps."The video that accompanies this article has the chart map that explain where I'm buying the imminent dip(s).For some aggressive trading ideas, I'll tell you that I am long the ProShares UltraPro Short QQQ ETF SQQQ now and will flip out of that and into ProShares UltraPro QQQ TQQQ, the 3X bullish ETF.My first "pounce" area will be near 4200.I'm also looking at adding to my The Trade Desk TTD position and hoping to scoop some Shopify SHOP under $1,400.And Advanced Micro Devices AMD is also on my shopping list under $100. Maybe some NVDA under $200 as well.One Set-Up Leads to AnotherAny good technical trader will tell you that. As scenarios unfold, probabilities shift. Especially as volatility rises, and ranges expand to exert more stop-loss pressure and panic.So I'll also be paying close attention to how much selling accelerates, as more over-leveraged and vulnerable hedge funds are discovered in the market correction they didn't count on.A more important point of view (than pointing at Chinese real estate contagion) comes from Morgan Stanley's resident curmudgeon, Mike Wilson.Mike Wilson to the Bears' RescueAs Wilson likes to always point out, "The market and the economy are not the same thing."And he reminds us of this as the market ran ahead of the recovery and over-shot to the upside. Now with growth flattening, the market will run the other way.In his interview Monday morning on Bloomberg, he went over his "fire and ice" thesis...He's calling for a plunge of 20% in US stocks (his worst-case scenario), citing weaker growth and falling consumer confidence.In the fire outcome of his thesis (his more optimistic view), the Fed tapers to keep the economy from running too hot. This will get us a garden variety 10% correction (think SPX 4050).The more bearish “ice” scenario is where Wilson leans though as he sees the economy sharply decelerating and downward earnings revisions spike.The Wilson team wrote in their note published Monday morning...“Will it be fire or ice? We don’t know, but the ice scenario would be worse for markets and we are leaning in that direction. We think the mid-cycle transition will end with the rolling correction finally hitting the S&P 500.”I certainly didn't see a growth deceleration coming that would negatively impact earnings estimates.I just thought we would get a technical washout of 5-7% to scare everybody.So now I'm reevaluating the growth outlook too.Which means we don't need to rush and buy the first dip to SPX 4200. We'll be patient and wait until we get more information.Wilson says smart investors will probably wait until most of the Q3 report cards are in (late Oct/early Nov) to know better.I expect to know enough in 2-3 weeks, not 6.Meanwhile, even a "lovey-dovey" Fed result one hour from now won't turn me bullish in the short-term.Disclosure: I own shares of AMD, TTD, NVDA, and SQQQ for the Zacks TAZR Trader portfolio.  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 Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis Report ProShares UltraPro QQQ (TQQQ): ETF Research Reports The Trade Desk Inc. (TTD): Free Stock Analysis Report ProShares UltraPro Short QQQ (SQQQ): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks18 hr. 52 min. ago

Teck (TECK) Trims Zinc & Coal Production Guidance for 2021

Teck (TECK) projects 2021 Red Dog zinc production to lie between 285,000 tons and 290,000 tons, and steelmaking coal production in the band of 25-26 million tons. Teck Resources Ltd TECK has lowered the annual steelmaking coal and refined Zinc production guidance 2021, due to the forest fire incident in British Columbia, which hurt the company’s third-quarter operations.In August, Teck’s Trail Operations metallurgical facility was impacted by wildfire smoke following which, Trail’s oxygen plant was temporarily shut down due to the poor air quality. On Aug 13, Trail’s oxygen plants resumed operations. However, the plant closure negatively impacted the company’s zinc production, as a result of which, the company now expects 2021 zinc production to be between 285,000 tons and 290,000 tons, lower from the prior range of 290,000 to 300,000 tons. The refined zinc production for the third quarter is expected between 72,000 tons and 75,000 tons. The company produced 76,000 tons refined zinc in third-quarter 2020.On Aug 14, Teck suspended its Highland Valley Copper (HVC) operations for a period of four days due to the wildfire evacuation order issued by the District of Logan Lake. As copper production was not impacted significantly, the company maintained its HVC annual contained copper production guidance at 128,000 to 133,000 tons. However, the shipment timing of copper concentrate from HVC has been impacted due to the wildfires and logistics troubles.The wildfire mishap has also impacted the company’s steelmaking coal business. Teck, hence, had incorporated the impact in the steelmaking coal segment’s third-quarter sales volume and annual production guidance provided in the second-quarter’s earnings call. The segment’s sales are expected between 5.7 million tons and 6.1 million tons for the third quarter. The company projects steelmaking coal production between 25 million tons and 26 million tons in 2021. Additionally, the annual steelmaking coal production at the Elk Valley operation is likely to be impacted by the incident, coupled with increased labor absence related to the COVID-19 protocols.Teck has lowered the third-quarter sales guidance for zinc concentrate at Red Dog operation, due to the weather and ice situations as well as weather-induced shipping delays in July and August. The company now expects third-quarter contained zinc sales in the band of 145,000-155,000 tons, down from the prior estimate of 180,000-200,000 tons. Though the company is facing shipping shortages in the third quarter, management expects to ship all Red Dog zinc concentrates during the current shipping season assuming normal weather conditions.Teck continues to implement its innovation-driven efficiency program, RACE21, which is expected to improve proficiency and productivity across the business. Savings from this program will likely offset cost inflation, supply-related challenges, higher labor costs and lower production.Price PerformanceThe company’s shares have gained 27.9% so far this year, as against the industry’s decline of 1.3%.Image Source: Zacks Investment ResearchZacks Rank & Stocks to ConsiderTeck currently carries a Zacks Rank #3 (Hold).Better-ranked stocks in the basic materials space include Avient Corp. AVNT, The Mosaic Co. MOS and Veritiv Corp. VRTV, each sporting a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.Avient has a projected earnings growth rate of 75% for 2021. The company’s shares have gained 17.7%, so far this year.Mosaic has an estimated earnings growth rate of 472.9% for the current year. So far this year, the company’s shares have appreciated 40.1%.Veritiv has an estimated earnings growth rate of 215% for the current year. The company’s shares have soared 320.1%, year to date. 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 The Mosaic Company (MOS): Free Stock Analysis Report Veritiv Corporation (VRTV): Free Stock Analysis Report Teck Resources Ltd (TECK): Free Stock Analysis Report Avient Corporation (AVNT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks18 hr. 52 min. ago

H. B. Fuller (FUL) Tops Q3 Earnings and Revenue Estimates

H. B. Fuller (FUL) delivered earnings and revenue surprises of 2.60% and 3.71%, respectively, for the quarter ended August 2021. Do the numbers hold clues to what lies ahead for the stock? H. B. Fuller (FUL) came out with quarterly earnings of $0.79 per share, beating the Zacks Consensus Estimate of $0.77 per share. This compares to earnings of $0.76 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.60%. A quarter ago, it was expected that this adhesives company would post earnings of $0.92 per share when it actually produced earnings of $0.94, delivering a surprise of 2.17%.Over the last four quarters, the company has surpassed consensus EPS estimates four times.H. B. Fuller, which belongs to the Zacks Chemical - Specialty industry, posted revenues of $826.83 million for the quarter ended August 2021, surpassing the Zacks Consensus Estimate by 3.71%. This compares to year-ago revenues of $691.46 million. The company has topped consensus revenue estimates four times over the last four quarters.The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.H. B. Fuller shares have added about 15.4% since the beginning of the year versus the S&P 500's gain of 15.9%.What's Next for H. B. Fuller?While H. B. Fuller has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.Ahead of this earnings release, the estimate revisions trend for H. B. Fuller was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.06 on $841.19 million in revenues for the coming quarter and $3.49 on $3.19 billion in revenues for the current fiscal year.Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Specialty is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. 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 H. B. Fuller Company (FUL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks18 hr. 52 min. ago

KB Home (KBH) Q3 Earnings Surpass Estimates

KB Home (KBH) delivered earnings and revenue surprises of 2.50% and -5.98%, respectively, for the quarter ended August 2021. Do the numbers hold clues to what lies ahead for the stock? KB Home (KBH) came out with quarterly earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.60 per share. This compares to earnings of $0.83 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.50%. A quarter ago, it was expected that this homebuilder would post earnings of $1.29 per share when it actually produced earnings of $1.50, delivering a surprise of 16.28%.Over the last four quarters, the company has surpassed consensus EPS estimates four times.KB Home, which belongs to the Zacks Building Products - Home Builders industry, posted revenues of $1.47 billion for the quarter ended August 2021, missing the Zacks Consensus Estimate by 5.98%. This compares to year-ago revenues of $999.01 million. The company has topped consensus revenue estimates just once over the last four quarters.The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.KB Home shares have added about 21.2% since the beginning of the year versus the S&P 500's gain of 15.9%.What's Next for KB Home?While KB Home has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.Ahead of this earnings release, the estimate revisions trend for KB Home was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $2.10 on $1.88 billion in revenues for the coming quarter and $6.23 on $6.02 billion in revenues for the current fiscal year.Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Home Builders is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. 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 KB Home (KBH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks18 hr. 52 min. ago

Amazon (AMZN) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Amazon (AMZN) closed at $3,380.05, marking a +1.09% move from the previous day. Amazon (AMZN) closed at $3,380.05 in the latest trading session, marking a +1.09% move from the prior day. This move outpaced the S&P 500's daily gain of 0.95%.Heading into today, shares of the online retailer had gained 1.14% over the past month, outpacing the Retail-Wholesale sector's gain of 0.55% and the S&P 500's loss of 1.87% in that time.Investors will be hoping for strength from AMZN as it approaches its next earnings release. In that report, analysts expect AMZN to post earnings of $8.72 per share. This would mark a year-over-year decline of 29.51%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $111.73 billion, up 16.21% from the year-ago period.Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $52.18 per share and revenue of $475.86 billion. These totals would mark changes of +24.74% and +23.26%, respectively, from last year.It is also important to note the recent changes to analyst estimates for AMZN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AMZN is holding a Zacks Rank of #4 (Sell) right now.Valuation is also important, so investors should note that AMZN has a Forward P/E ratio of 64.08 right now. This represents a premium compared to its industry's average Forward P/E of 50.57.It is also worth noting that AMZN currently has a PEG ratio of 2.43. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.16 based on yesterday's closing prices.The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 220, which puts it in the bottom 14% of all 250+ industries.The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com. 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 Amazon.com, Inc. (AMZN): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacks18 hr. 52 min. ago

General Electric (GE) Outpaces Stock Market Gains: What You Should Know

General Electric (GE) closed at $98.54 in the latest trading session, marking a +1.78% move from the prior day. In the latest trading session, General Electric (GE) closed at $98.54, marking a +1.78% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.95%.Prior to today's trading, shares of the industrial conglomerate had lost 6.25% over the past month. This has lagged the Conglomerates sector's loss of 1.37% and the S&P 500's loss of 1.87% in that time.Wall Street will be looking for positivity from GE as it approaches its next earnings report date. On that day, GE is projected to report earnings of $0.53 per share, which would represent year-over-year growth of 10.42%. Our most recent consensus estimate is calling for quarterly revenue of $19.34 billion, down 0.39% from the year-ago period.For the full year, our Zacks Consensus Estimates are projecting earnings of $1.99 per share and revenue of $77.14 billion, which would represent changes of +2387.5% and -3.12%, respectively, from the prior year.Any recent changes to analyst estimates for GE should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. GE is holding a Zacks Rank of #3 (Hold) right now.Investors should also note GE's current valuation metrics, including its Forward P/E ratio of 48.74. This represents a premium compared to its industry's average Forward P/E of 18.98.It is also worth noting that GE currently has a PEG ratio of 9.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations was holding an average PEG ratio of 1.67 at yesterday's closing price.The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 44, putting it in the top 18% of all 250+ industries.The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions. 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 General Electric Company (GE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks18 hr. 52 min. ago