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Mastercard (MA), Softcell Tie Up to Boost Cybersecurity in India

Mastercard (MA) collaborates with Softcell, which will distribute MA's RiskRecon to its customers across India and empower them to counter cybersecurity threats. Mastercard Incorporated MA recently joined forces with the Mumbai-based IT service provider and systems integrator company Softcell Technologies Global Pvt. Ltd. to expand the distribution of one of its cybersecurity offerings across Softcell customers throughout India.The cybersecurity product mentioned above refers to the third-party cyber risk management platform of Mastercard — RiskRecon. The platform enables organizations to detect and counter those cybersecurity threats that take place across supply chains and third-party vendors. RiskRecon comes with a self-scan tool that utilizes non-invasive techniques to examine the cybersecurity risk posture of the public systems of an organization.Following the latest partnership, the customer base of Softcell across diversified industries will be able to avail the exclusive scanning and evaluation technologies of RiskRecon and set up a solid digital safety framework. This, in turn, is likely to empower the customers to protect their businesses from the continuous incidence of cyber threats by extending uninterrupted real-time information for proactive management of cyber risks and protecting critical intellectual property, consumer and payment data.Initiatives similar to the latest one reflect Mastercard’s sincere efforts to enhance security in the digital ecosystem and create safe cyberspace. This seems to be the need of the hour, considering the increasing digitization of operations by most businesses to keep pace with the ongoing digital trend. While digitization has been a blessing in disguise for organizations to continue their businesses despite several COVID-19-induced volatilities, the trend to go digital encouraged fraudsters to devise sophisticated methods and technologies to indulge in cybercrimes. This is an alarming concern as cyberattacks compromise payments received by organizations and the confidential data of consumers. This, in turn, might lead to the incurrence of exorbitant costs.Therefore, companies similar to Mastercard providing a comprehensive portfolio of fraud detection solutions with high accuracy for varied industries will be best positioned to capitalize on the increasing incidence of cybersecurity threats. Softcell seems to be the apt partner for distributing Mastercard’s cybersecurity product to its customers in India. Softcell has a solid track record of pursuing a consulting-based approach in aiding businesses to upgrade infrastructure security. Certified professionals across key domains numbering more than 200 also aid Softcell.In addition to boosting presence in India, the recent effort to extend RiskRecon within the country seems to be time opportune as well. India was among one of the top three nations in Asia impacted by the most cyberattacks last year, per a global analysis report of International Business Machines Corporation IBM (published in The Economic Times). The country remains prone to cyberattacks from all across the globe due to its obsolete systems and processes, disjointed and incompetent cybersecurity infrastructure, and inadequate knowledge of cybersecurity.Mastercard remains committed to upgrading its cybersecurity suite on the back of continuous partnerships and significant investments. In April 2022, MA teamed up with the rapidly growing operational resilience company Interos to empower financial institutions with the latter’s credible risk-monitoring capabilities for quickly addressing third-party risks in their businesses. Mastercard even has a program to safeguard its network and platforms from cyber and information security threats.Shares of Mastercard have lost 11.9% in the past six months compared with the industry’s decline of 18.7%.Image Source: Zacks Investment ResearchMA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Similar to Mastercard, other companies like Visa Inc. V and American Express Company AXP are continuously rolling out a diverse range of fraud detection solutions to protect merchants and consumers engaging in digital means amid the growing incidence of cybercrimes.Visa launched the Advanced Identity Score in 2020 with the intent to minimize digital identity frauds and reduce operational costs associated with identity-related forgeries. V actively pursues technology investments to reduce the impact of fraud and safeguard consumer and merchant-oriented information. The CyberSource solution by Visa comprises a diversified portfolio of payment and fraud management tools.American Express has been making every effort to advance its digital arm to assist its merchants and Card Members globally. AXP has its proprietary automated accounts payable (AP) solution American Express One AP, which aims to address the robust demand for AP solutions that secure payment processes via digitization. American Express has collaborated with a few online fraud-prevention companies like Accertify, Microsoft and Riskified to stop card-not-present (CNP) fraud and ensure safer shopping for its worldwide merchants and Card Members.Shares of Visa and American Express have lost 8.2% and 14.9%, respectively, in the past six months. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report International Business Machines Corporation (IBM): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 29th, 2022

Futures Slide As Sell-The-Rippers Emerge, Encouraged By Target"s Dismal Update

Futures Slide As Sell-The-Rippers Emerge, Encouraged By Target's Dismal Update It was a relatively quiet session for stocks with futures trading modestly lower overnight as yields eased their Monday surge and when the biggest news was Australia's unexpected 50bps rate hike (double consensus) before all hell broke loose at 7am, when Target cut guidance for the second time in two weeks due to the infamous bullwhip effect we had warned about just a few weeks ago, sending TGT stock crashing more than 9% and encouraging the cold risk-off wind that pushed S&P futures 0.8% lower to session lows around 4,080... ... while Nasdaq 100 futures fell 1% as Treasury yields hovered around 3.05%, their highest in nearly a month. Europe's Stoxx Europe 600 Index slipped as telecom and technology stocks weighed. In the premarket, shares of Target tumbled as much as 10% after the retailer cut its profit outlook for the second time in three weeks amid an inventory surplus. The news sent retailers such as Walmart and Costco also sliding premarket; WMT was down as much as 4.3% ahead of the bell, COST -2.9%, Kroger -1.3%, Macy’s -3%. Among other notable movers, cryptocurrency-exposed stocks tumbled in premarket trading as Bitcoin slid back below $30,000. Meanwhile Kohl’s shares rose 12% in premarket trading as the company holds exclusive talks with Franchise Group regarding a deal that would value the retail chain at about $8 billion. Here are some other notable premarket movers: Cryptocurrency-exposed stocks decline in premarket trading as Bitcoin slides back below $30,000, with another attempt at upward momentum losing traction amid risk-off markets. Riot Blockchain (RIOT US) -5%, Marathon Digital (MARA US) -3.7%. Kohl’s (KSS US) shares jump 12% in US premarket trading as the company holds exclusive talks with Franchise Group regarding a deal that would value the retail chain at about $8 billion. Peloton’s (PTON US) shares rose 1.4% in US after-hours trading on Monday. Former vice president of Amazon Web Services Liz Coddingtonis “well-positioned” to help Peloton in its next stage of growing subscribers, Citi says, after the exercise machine maker appointed Coddington CFO. Gitlab (GTLB US) shares rose 9.8% in postmarket trading on Monday after the software company’s first-quarter report. HealthEquity (HQY US) shares climbed 5.8% in postmarket Monday. It boosted its revenue guidance for the full year as its results beat the average analyst estimate in what RBC analyst Sean Dodgesaid could be the start of a years-long upside driven by rising interest rates. ProFrac (PFHC US) shares could be active after analysts initiated coverage of oil services firm with three overweight ratings and one buy, with both Piper Sandler and Morgan Stanley positive on the company’s valuation and vertical business model. Veru Inc. (VERU US) gained 2.8% in postmarket trading after Tang Capital Partners LPdisclosed a 5.2% passive stake in the firm. On Monday, investors once again sold the rip, showing their reluctance to take on risk amid fears policy to subdue inflation will go overboard and kill off economic recoveries, rather than cooling off price pressures in a so-called soft landing. “This debate around ‘are we going to see a recession, are we going to see a soft landing?’ -- that’s really keeping markets relatively range bound,” Laura Cooper, a senior investment strategist at BlackRock Inc., said in an interview with Bloomberg TV. “We likely need to see a dovish pivot from policymakers to really have conviction that we’re going to a sustained rally in equities." Rising bond yields are adding to worries about risks to economic growth as central banks ratchet up policy tightening. US benchmark Treasury yields stabilized near 3%, a psychological threshold that may burden new supply due this week before crucial inflation data. “The combo of declining growth, rising rates and falling liquidity is pretty ugly for equities,” said James Athey, investment director at abrdn. “Reluctant as investors in those market are to admit, the outlook for multiples and earnings isn’t great and is probably getting worse.” Meanwhile, Friday's CPI reading for May will be crucial for clues on the Federal Reserve’s pace of monetary tightening, especially the clothing and apparel component where we expect prices to plunge amid the inventory liquidation. Strong hiring data last week already cleared the way for the central bank to remain aggressive in its fight against inflation by raising interest rates. Higher rates particularly hurt growth sectors that are valued on future profits, like tech.  In Europe, the benchmark Stoxx 600 Index also resumed losses on Tuesday led by drops of more than 1% in technology and travel shares. European equities traded poorly with several indexes giving back over half of Monday’s gains. Euro Stoxx 50 drops as much as 0.8%, cash DAX underperforming at the margin. Tech, retail and telecoms are the weakest Stoxx 600 sectors. FTSE 100 trades flat.  The European Central Bank on Thursday is set to end trillions of euros of asset purchases and cement a path to exiting eight years of negative interest rates. Earlier in the session, Asian stocks declined with chipmakers coming under pressure as traders reassessed the outlook for demand, offsetting Japan’s boost from a weak yen. The MSCI Asia Pacific Index dropped as much as 1.2%, with TSMC and Samsung Electronics the biggest drags. Most sectors traded lower, while some Chinese internet giants and Japanese automakers were among the notable gainers. Tech hardware stocks fell as worries about demand for handsets and other gadgets outweighed hopes for a recovery in China on the easing of Covid lockdowns. South Korean equities dropped as the market reopened after a holiday, while shares in Australia slumped after the Reserve Bank of Australia blindsided the market with an outsized hike to combat rising costs. The RBA responded to price pressures with its biggest rate increase in 22 years -- predicted by just three of 29 economists -- and indicated it remained committed to “doing what is necessary” to rein in inflationary pressures. There are persistent worries about demand for semiconductors as the market consensus is that a demand slowdown for handsets and other consumer electronics is highly likely,” said Lee Jinwoo, chief strategist at Meritz Securities in Seoul. Most Chinese tech stocks finished lower in volatile trading after climbing Monday following a report that regulators are concluding their investigation of transport firm Didi. Japanese shares rose as the yen weakened to its lowest level in two decades, boosting exporters such as Toyota and Honda. Read: Yen Slides to Two-Decade Low, Reigniting Focus on Intervention Asian stocks are down in June after posting their first monthly gain in five months in May. Traders will be assessing the inflation and growth outlook ahead of the Federal Reserve’s meeting next week while monitoring the state of Covid restrictions in China.  “Stock market valuations have de-rated quite significantly and from our perspective, there is a lot of the bad news largely in the price. Possibly there’s more to go,” Chetan Seth, Asia Pacific equity strategist at Nomura Holdings said at a conference in Singapore In FX, Bloomberg dollar spot rises as much as 0.4% and the dollar was steady or higher against all of its Group-of-10 peers; NOK is the weakest G-10 performer. JPY softness extends, briefly trading at 133/USD. The yen extended its slump to a fresh 20- year low near 132.60/USD as BOJ’s Kuroda continued to emphasize persistent easing commitment. Senior Japanese government officials said they were closely watching currency markets with a sense of urgency Tuesday as they returned to a heightened state of alert following a renewed slide in the yen to fresh two-decade lows. The dollar’s steep rally to the 133 handle versus the yen and the Australian central bank’s biggest rate hike in 22 years make the case for long-volatility exposure in the major currencies and traders follow suit. The pound fell to an almost three-week low versus the greenback before paring losses to trade around $1.25. The gilt yield curve bull flattened. The euro was little changed, trading around $1.07. Bunds and European bonds reversed opening losses even as wagers earlier crossed half the way toward calling a historic half-point. In rates, treasuries swung from losses to gains, sending yields as much as 3bps lower as the yield curve flattened. Treasury futures rose led led by the long-end amid weakness in European stocks and S&P 500 futures.Bloomberg notes that gains were helped by block trade in 10-year note futures as cash yield eases back toward 3%. US yields were richer by nearly 3bp across long-end of the curve, flattening 2s10s, 5s30s by ~1bp; 10-year, down ~2bp to 3.02%, outperforms bunds slightly, while gilt is little changed. German bunds outperform, richening ~3bps from the 5y point out, gilts are relatively quiet. Peripheral spreads are slightly tighter to core, semi-core widens a touch. Australian bond yields soared and the Aussie briefly reversed a loss after the central bank surprised investors by raising its cash rate by 50 basis points -- the biggest increase in 22 years -- to 0.85%, a result predicted by just three of 29 economists. It also committed itself to “doing what is necessary” to rein in inflationary pressures. In commodities, crude futures drift higher with WTI near $120 and Brent back around $122. Spot gold adds ~$6 to near $1,847/oz. Base metals are in the red with LME nickel down over 3%. Bitcoin is pressured and back below the USD 30k mark and incrementally below last week's trough of USD 29.04k. Looking to the day ahead now, and data releases include German factory orders for April, the final UK services and composite PMI for May, as well as the US trade balance and consumer credit for April. Otherwise central bank speakers include the ECB’s Wunsch. Market Snapshot S&P 500 futures down 0.4% to 4,106.00 STOXX Europe 600 down 0.4% to 442.31 MXAP down 0.9% to 167.50 MXAPJ down 1.1% to 552.94 Nikkei up 0.1% to 27,943.95 Topix up 0.4% to 1,947.03 Hang Seng Index down 0.6% to 21,531.67 Shanghai Composite up 0.2% to 3,241.76 Sensex down 1.2% to 55,018.56 Australia S&P/ASX 200 down 1.5% to 7,095.74 Kospi down 1.7% to 2,626.34 Brent Futures up 0.3% to $119.88/bbl Gold spot up 0.1% to $1,843.79 U.S. Dollar Index up 0.10% to 102.54 German 10Y yield little changed at 1.30% Euro little changed at $1.0694 Top Overnight News The ECB will begin a new era of monetary policy this week as officials complete their pivot to confront the threat of inflation running out of control. Armed with new forecasts and with prices rising at a record pace, President Christine Lagarde and her colleagues will end trillions of euros of asset purchases and cement a path to exiting eight years of negative interest rates The yen has tumbled to a two-decade low against the dollar, caught in the crossfire between the two wildly different monetary policy regimes in Japan and the US. The Bank of Japan is pinning interest rates to zero in a bid to boost a sputtering economy and spur price growth, while the Federal Reserve is hiking furiously to beat back raging inflation Investors from Tokyo to New York are betting on further weakness in Japan’s currency, which is already wallowing at a two-decade low against the greenback Bank of Japan Governor Haruhiko Kuroda walked back some of his comments that consumers are now more willing to accept higher prices after criticism on social media and a grilling in parliament A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded cautiously amid recent upside in yields and ahead of upcoming risk events. ASX 200 declined with losses exacerbated after the RBA delivered a larger-than-expected rate hike. Nikkei 225 swung between gains and losses although a weak JPY boosted the index above 28k. Hang Seng and Shanghai Comp. were varied as the mainland was kept afloat by reopening optimism and with Hong Kong subdued by property names, although tech benefitted from hopes Beijing may be easing its crackdown on the sector with China reportedly to conclude the cybersecurity probe into certain companies. Top Asian News China's Tianjin city reopened all subway stations that were closed due to COVID, while Shanghai Port's daily volume rose to 95% of the normal level, according to local press. Labor Advisory Committee urged US President Biden to extend China tariffs, according to Axios. Japan set up a team to monitor land sales near bases and nuclear plants or on strategically located islands under a new law designed to prevent hostile foreigners from affecting national security, according to Nikkei. RBA hiked rates by 50bps to 0.85% (exp. 25bps increase) and said inflation in Australia has increased significantly, while it is committed to doing what is necessary to ensure that inflation in Australia returns to the target over time. RBA added that inflation is likely to be higher than was expected a month ago and the Board expects to take further steps in normalising monetary conditions over the months ahead with the size and timing of future interest rate increases to be guided by the incoming data and the assessment of the outlook for inflation and the labour market. Furthermore, it noted the Australian Economy is resilient although one source of uncertainty about the economic outlook is how household spending evolves, given the increasing pressure on Australian households' budgets from higher inflation. Japan's Economy Minister Yamagiwa says they are closely watching any impact of FX movements on the economy, wants to refrain from commenting on FX levels, via Reuters. European bourses are modestly pressured, Euro Stoxx 50 -0.9% , with newsflow relatively limited once more and participants looking ahead to the week's risks events. Stateside, performance is in-fitting with this directionally, though marginally more contained in terms of magnitudes, with a limited US docket ahead; ES -0.5%. EU lawmakers have come to an agreement on a single mobile charging point, via Reuters; will be USB-C by fall-2024. Top European News UK PM Johnson won the confidence vote, as expected, with total votes at 211 vs 148, according to Reuters. However, the Telegraph highlights that Johnson is not "out of the woods yet" given that he has lost the support of so many backbenchers. UK PM Johnson said he is grateful for colleagues' support and that they need to come together as a party now. PM Johnson added that they can now focus on what they are doing to help people in the country and have a chance to continue strengthening the economy, while he responded that is certainly not interested when asked about a snap election, according to Reuters. Subsequently, the 1922 Committee is, according to the understanding of UK MP Ellwood, looking at altering party rules to allow another no-confidence vote within a one-year period, via Sky's Degenhardt. Barclaycard UK May consumer spending rose 9.3% Y/Y, which reflected the rising cost of living and base effects, according to Reuters. FX Dollar takes time out after rallying further on yield factors and frailty of others, DXY midway between 102.830-450 range. Yen continues to underperform on rate and relative BoJ policy dynamics, with Franc also feeling the heat from SNB vs Fed, ECB etc policy divergence; USD/JPY touches 133.00 before easing back, USD/CHF tops 0.9675 and EUR/CHF crosses 1.0400. Kiwi hit by abrupt turnaround in AUD/NZD tide after RBA exceeded market expectations with a 50bp hike compounded by hawkish guidance; NZD/USD sub-0.6500 around 0.6450, AUD/NZD above 1.1100 and AUD/USD within sight of 0.7200. Sterling volatile after PM Johnson wins confidence vote, but significant minority of Conservative Party want him out; Cable choppy either side of 1.2500 and EUR/GBP whipsaws around 0.8550. Loonie softer with oil ahead of Canadian trade data and Ivey PMIs, USD/CAD near 1.2600 after probe beyond round number. Lira continues to slide after Turkish President Erdogan repeats intention to keep cutting rates irrespective of ongoing rise in inflation, USD/TRY tests 14.7500. Fixed Income Firm bounce in bonds following extension of bear run to new cycle lows. Bunds lead the way in core debt circles with a near full point recovery to 149.80, while BTPs remain to the fore at the margins between 121.27-122.86 bounds. Gilts flat after falling short of 115.00 before solid 2025 DMO auction, T-note a tad firmer and curve flatter for choice ahead of 3 year sale. Commodities Crude benchmarks have waned from initial upside stemming from bullish bank commentary amid a broader easing in risk sentiment. Thus far, WTI and Brent have been as low as USD 117.76/bbl and USD 118.62/bbl respectively, circa. USD 2.00/bbl from initial highs. Goldman Sachs hiked its Q3 Brent oil forecast to USD 140/bbl from USD 125/bbl and increased its Q4 forecast to USD 130/bbl from USD 125/bbl. Morgan Stanley's base case view is for Brent to reach USD 130/bbl during Q3 with an upside to the bull case estimate of USD 150/bbl. Spot gold languished near the prior day's lows amid a firmer greenback. JPMorgan continues to see gold trading softer towards USD 1,800/oz in Q3 2022 on an expected rebound in investor risk sentiment and continued push higher in US yields. Spot gold is firmer but capped by USD 1850/oz, which now coincides with its 10-DMA, after losing the level late on Monday; base metals are generally pressured, amid risk aversion and following yesterday's price action. US Event Calendar 8:30am: Revisions: Trade Balance 8:30am: April Trade Balance, est. -$89.5b, prior -$109.8b 3pm: April Consumer Credit, est. $35b, prior $52.4b DB's Jim Reid concludes the overnight wrap Yesterday I published the 24th Annual Default Study. While nothing much will change for the remainder of 2022, we think we might be coming to the end of the ultra-low default world we’ve discussed so much in previous editions. First, we will likely have a cyclical US recession to address in 2023, and after that, a risk of the reversal of trends that have made the last 20 years so subdued for defaults. We see US HY defaults peaking at just over 10% in 2024 with Europe just under 7% helped by a higher BB weighting. After that we see many of the trends of the last couple of decades reversing, helping to leave the ultra-low default era behind. You can read all about this in the note but these factors include: higher structural inflation, less ability for central banks to be as aggressive across all fixed income - they will be forced to pick their battles (eg Peripherals), less global FX reserve accumulation, a turn up in the free float of global government bonds, higher term premium, a structural fall from peak corporate profits, and shorter gaps between recessions. None of this need be a disaster just a change in the long-term trend. Clearly our view relies a lot on inflation being sticky and helping set off a 2023 recession and then remaining sticky after this, and thus changing the landscape of the last 20 years. If we’re wrong on both, the ultra-low default world will survive. See the report here. The biggest story yesterday was a surge in yields but before we get there, a big curiousity to those of us in the UK, albeit with very limited implications for global markets, was the confidence vote last night for Prime Minister Boris Johnson from within his own party. That came after the threshold of 15% of his own MPs called for a vote, and the final result saw him win by just 211-148, meaning that 41% of his own party’s MPs voted against him. For reference, that’s more than the 37% of MPs who voted against his predecessor Theresa May in a similar vote in December 2018, and it was only 5 months later that she announced her resignation after failing to deliver Brexit and witnessing a dramatic turn in the Conservatives’ poll ratings. The next big hurdle for Johnson will likely be two by-elections on June 23rd, one of which is in a “Red Wall” seat that the Conservatives gained off Labour for the first time in decades to win their majority at the last election, whilst the other is in a traditionally safe Devon seat for the Conservatives but where the bookmakers have the Liberal Democrats as the favourite to win. So bad showings in those two would keep questions about Johnson’s leadership in the headlines and further intensify the pressure on him. In theory the Conservative leadership rules give him another year before a repeat confidence vote can happen, but history tells us that once this process gets set in motion it is incredibly difficult to reverse the negative momentum, and both Theresa May and Margaret Thatcher resigned well within a year even though they also won a majority of their own MPs at the confidence vote. Sterling actually climbed around +0.5% in the morning as the vote was officially triggered before giving back half these gains as the day progressed. However even after the surprise result at 9pm last night Sterling didn't move, and this morning it’s just -0.09% lower, trading at 1.252 against the US dollar. Back to the main event, which was the global rates sell-off, where 10yr Treasury yields poked back up above 3% for the first time in nearly a month, whilst European yields hit fresh multi-year highs of their own ahead of this Thursday’s ECB meeting. There’ve been a couple of catalysts behind those moves higher, but a key one over the last week and a half has been the perception that near-term recession risks (at least in 2022) are fading back again, which in turn is set to give central banks the space to continue hiking rates and thus take bond yields higher. On top of that, the fact that recent inflation data has proven stickier than expected has also pushed yields higher, and investors are eagerly awaiting to see if we get another upside surprise from the US CPI reading out on Friday. All-in-all, those moves sent the 10yr Treasury yield up by +10.3bps yesterday to 3.04%, with a rise in real yields of +8.3bps behind the bulk of the move. That came as investors dialled back up their bets on Fed tightening over the rest of the year, with the implied rate by the December FOMC meeting at a 1-month high of 2.85%, whilst the rate priced in by the Feb-2023 meeting went back above 3% for the first time in a month as well. But it was in Europe where there were even more significant milestones, with the amount of ECB rate hikes priced in by December exceeding 125bps for the first time, meaning that markets are fully pricing in at least one 50bp hike by year-end, assuming the ECB begins liftoff at the July meeting. That prospect of a 50bp hike from the ECB sent yields on 10yr bunds up +4.9bps to 1.32%, which is their highest level since mid-2014, whilst the German 2yr yield (+3.0bps) hit its highest level since 2011. It was a similar picture elsewhere on the continent, with yields on 10yr OATs (+4.1bps) at a post-2014 high, and those on 10yr BTPs (+1.3bps) at a post-2018 high. Gilts underperformed however, with 10yr yields up +9.2bps as investors moved to price in at least one 50bp hike from the BoE by year-end. Those moves have gained further momentum overnight after the Reserve Bank of Australia hiked rates by a larger-than-expected 50bps, helping 10yr Treasury yields to rise a further +1.9bps this morning to hit 3.06%. Their statement also pointed to further tightening ahead, and said that they expect “to take further steps in the process of normalizing monetary conditions in Australia over the months ahead”, and that they were “committed to doing what is necessary to ensure that inflation in Australia returns to target over time.” Unsurprisingly, the Australian dollar is also the top-performing G10 currency this morning, up +0.50% against the US Dollar. The strong rise in bond yields wasn’t enough to stop equities from posting a decent start to the week, although they did pare back their initial gains following the US open. By the close, the S&P 500 (+0.31%) had held onto a broad-based advance, with 8 of 11 sectors advancing, even after paring back gains as high as +1.5% in the morning. Tech stocks fared slightly better than the broader index, with the NASDAQ gaining +0.40%. The clearest split was between mega- and small-cap shares, as mega-cap shares were clear outperformers as the FANG+ Index ended the day +1.68% higher while the small-cap Russell 2000 (+0.36%) lagged behind. It was much the same story in Europe too, where the STOXX 600 (+0.92%), the DAX (+1.34%) and the CAC 40 (+0.98%) all moved higher as well. Whilst equities were making further gains, there wasn’t much respite on the inflation side since commodities continued their advance, with Bloomberg’s Commodity Spot Index (+1.86%) hitting a fresh record on the back of the latest moves. Admittedly, Brent Crude (-0.18%) and WTI (-0.31%) oil prices fell back slightly, and we also saw European natural gas prices (-1.75%) fall to their lowest levels since Russia’s invasion of Ukraine began. But US natural gas prices surged another +8.37% to a fresh post-2008 high, whilst agricultural goods also saw some serious movements, with futures on corn (+2.13%), wheat (+5.10%) and sugar (+1.40%) all rising on the day. This morning we’ve seen even further momentum behind commodity prices, with Brent crude moving back above the $120/bbl mark thanks to a +0.69% gain. Overnight in Asia, equity markets have put in a pretty mixed performance as they grappled with that monetary tightening mentioned above. The Nikkei (+0.51%), the CSI 300 (+0.65%) and the Shanghai Comp (+0.48%) have all moved higher, but the Hang Seng (-0.12%) has posted a marginal decline and the Kospi (-1.37%) has lost significant ground. Meanwhile in Australia, the S&P/ASX 200 has deepened its loses since the RBA’s hawkish decision, and is currently down -1.63%, whilst futures in the US are also pointing lower, with those on the S&P 500 down -0.59% this morning. On the FX side, we’ve also seen the Japanese Yen fall to a 20-year low against the US Dollar of 131.88 by the close yesterday, and this morning it’s lost further ground to hit 132.86. That comes as the BoJ stands out among its global peers in not tightening policy, which is leading to a widening interest rate differential as other central banks continue hiking. Finally we started on credit so let's end there too before the day ahead preview. Our colleagues in the European Leveraged Finance Research team have just published their quarterly top trade ideas. You can find the report here. To the day ahead now, and data releases include German factory orders for April, the final UK services and composite PMI for May, as well as the US trade balance and consumer credit for April. Otherwise central bank speakers include the ECB’s Wunsch. Tyler Durden Tue, 06/07/2022 - 08:03.....»»

Category: blogSource: zerohedgeJun 7th, 2022

Futures Jump, Tech Stocks Rally As Beijing Eases Covid Restrictions

Futures Jump, Tech Stocks Rally As Beijing Eases Covid Restrictions Global markets and US equity futures pushed sharply higher to start the new week (at least until some Fed speakers opens their mouth and threatens a 100bps emergency rate hike) as Beijing’s latest move to ease Covid restrictions injected a note of optimism into markets rattled by inflation and rate-hike concerns. Nasdaq 100 futures climbed 1.4% at 7:15 a.m. in New York after the underlying index erased more than $400 billion in market value on Friday amid renewed concerns about tightening monetary policy, as Beijing rolled back Covid-19 restrictions, boosting global risk appetite after reporting zero local covid cases on Monday while also finding no community cases for three straight days... ... while a Wall Street Journal report that China is preparing to conclude its probe on Didi Global boosted sentiment further, with Didi shares surging 50% and sending the Hang Seng Tech index soaring. S&P 500 futures also climbed, rising about 1% and trading near session highs. Treasuries and the dollar slipped. Among other notable movers in premarket trading, Apple rose 1.6%, Tesla jumped 3.9% after tumbling over 9% by the close on Friday, while cryptocurrency-tied stocks jumped with Bitcoin. Here are some other notable premarket movers: Amazon.com (AMZN US) shares rose as much as 2% following a 20-for-1 stock split. Didi Global Inc. (DIDI US) soared after a report that Chinese regulators are about to conclude a probe into the company and restore its apps to mobile stores as soon as this week. Cryptocurrency-tied stocks climb with Bitcoin, which rose beyond the $30,000 level after languishing at the weekend. Riot Blockchain (RIOT US) +7.1%; Coinbase (COIN US) +6.6%. Crowdstrike (CRWD US) shares rise as much as 3.9% following an upgrade to overweight from equal- weight at Morgan Stanley, with the broker saying that the cyber security firm offers “durable” growth and free cash flow at a discount. ON Semi (ON US) shares rise as much as 8.2%. The sensor maker will be added to the S&P 500 Index this month, S&P Dow Jones Indices said late US stocks slumped in last week’s final session after strong hiring data cleared the way for the Federal Reserve to remain aggressive in its fight against inflation by raising rates, and after repeat warnings by Fed presidents that the central bank was willing to keep hiking. This week, focus will be on the latest US CPI print to assess how much further the Fed will tighten policy. Inflation is likely to “stall by the end of this year unless the energy or oil prices double again, but a lot of it is already priced in,” Shanti Kelemen, chief investment officer at M&G Wealth, said on Bloomberg Television. While the economy is likely to slow, “I don’t think the US will flip into a recession this year. I think there is still too much of a tailwind from spending and economic activity.” Goldman economists said the Fed may be able to pull off its aggressive rate-hike plan without tipping the country into recession. The easing of Chinese lockdowns will help abate supply-chain pressures, said Diana Mousina, a senior economist at AMP Capital. “Positive news around Chinese economic activity and cheaper equity valuations could offer value from a long-term investment perspective, but volatility will remain high in the short-term,” Mousina said in a note. On the other hand, Morgan Stanley's permagloomish Michael Wilson warned that weakening corporate profit forecasts will provide the latest headwind to US stocks, which are likely to fall further before bottoming during the second-quarter earnings season. In Europe, the Stoxx 600 was up 0.9% with technology and mining stocks leading gains. Basic resources led an advance in the Stoxx Europe 600 index as copper rose to its highest since April, with sentiment across industrial metals bolstered by China’s gradual reopening. The technology sector also outperformed, following a gain for Asian peers and amid a recovery in Nasdaq 100 futures in the US. The Stoxx 600 Tech index was up as much as 2.1%; Stoxx 600 benchmark up 0.9%. Tencent-shareholder Prosus was among the biggest contributors to the gain amid a rise for Hong Kong’s Hang Seng tech index, driven by Didi Global and Meituan; Tencent shares rose 2.4% while    Semiconductor-equipment giant ASML was the biggest contributor to the gain; other chip stocks ASMI, Infineon and STMicro all higher too. Just Eat Takeaway also higher following a report that Grubhub co-founder Matt Maloney had worked with private equity investor General Atlantic to buy back the food delivery company he sold to the Dutch firm last year. Here are some of the other notable European movers today: Just Eat Takeaway.com shares rise as much as 12% in the wake of a report saying Grubhub co-founder Matt Maloney had worked with private equity investor General Atlantic to buy back the food delivery company he sold to the Dutch firm last year for $7.3b. Semiconductor-equipment giant ASML climbs as much as 3.1% as European tech stocks outperform the broader benchmark, following a gain for Asian peers and amid a recovery in Nasdaq 100 futures. LVMH gains as much as 1.7% with luxury stocks active as Beijing continues to roll back Covid-19 restrictions in a bid to return to normality. Kering and Hermes both climb as much as 1.9%. Melrose rises as much as 4.7% after the firm said it has entered into an agreement to sell Ergotron to funds managed by Sterling for a total of ~$650m, payable in cash on completion. Serica Energy jumps as much as 12%, the most since March 30, after the oil and gas company published a corporate update and said it expects to benefit from investment incentives packaged with the UK’s windfall tax. Airbus rises as much as 2.8% after Jefferies reinstated the stock as top pick in European aerospace & defense, replacing BAE Systems, as short-term production challenges should not overshadow the potential to double Ebit by 2025. EDF drops as much as 3.3% after HSBC analyst Adam Dickens downgraded to reduce from hold, citing “corroded confidence” Accell falls as much as 4.8%, the most intraday since December, after KKR’s tender offer for the bicycle maker failed to meet the 80% acceptance threshold. Meanwhile, the European Central Bank is set to announce an end to bond purchases this week and formally begin the countdown to an increase in borrowing costs in July, joining global peers tightening monetary policy in the face of hot inflation. The ECB is planniing to strengthen its support of vulnerable euro-area debt markets if they are hit by a selloff, Financial Times reported. Italian and Spanish bonds gained. Earlier in the session, Asian stocks climbed, supported by a rally in Chinese tech shares and positive sentiment following Beijing’s economic reopening.  The MSCI Asia Pacific index rose 0.6% as Hong Kong-listed internet names jumped after a report that authorities are wrapping up their probe into Didi Global. Hong Kong and Chinese shares were among the top gainers in the region, also helped by Beijing moving closer to returning to normal as it rolled back Covid-19 restrictions. “As policymakers continue to deliver on support pledges, the worst is likely behind us,” said Marvin Chen, strategist at Bloomberg Intelligence. “We are seeing the beginning of a recovery into the second half of the year as the growth outlook bottoms out.” Japanese shares were higher, with transportation and restaurant stocks gaining after the Nikkei reported the government is considering restarting the “Go To” domestic travel subsidy campaign as soon as this month. Japanese equities erased early losses and rose with Chinese stocks as a loosening of Covid-19 restrictions in Beijing increased bets that economic activity will pick up. The Topix rose 0.3% to 1,939.11 as of market close Tokyo time, while the Nikkei advanced 0.6% to 27,915.89. Daiichi Sankyo Co. contributed the most to the Topix gain, increasing 3.7%. Foreign investors are returning to emerging Asian equities after several weeks of outflows, data compiled by Bloomberg show. Weekly inflows for Asian stock markets excluding Japan and China climbed to almost $2.7 billion last week, the most since February. Asian stocks have been outperforming their US counterparts over the past few weeks, with the MSCI regional benchmark up 5.7% since May 13, more than double the gains in the S&P 500. Stock markets in South Korea, New Zealand and Malaysia were closed on Monday Stocks in India dropped amid concerns over inflation as the Reserve Bank of India’s interest rate setting panel starts a three-day policy meeting.  The S&P BSE Sensex fell 0.2% to 55,675.32 in Mumbai, while the NSE Nifty 50 Index declined 0.1%. Ten of the 19 sector sub-gauges managed by BSE Ltd. slid, led by an index of realty companies. Makers of consumer discretionary goods were also among the worst performers.  “The market has been exercising caution ahead of the credit policy announcement this week, and hence investors trimmed their position in rate-sensitive sectors such as realty,” according to Kotak Securities analyst Shrikant Chouhan.  The yield on the benchmark 10-year government bond rose to its highest level since 2019 on Monday amid a surge in crude prices and ahead of the RBI’s rate decision on Wednesday. Reliance Industries contributed the most to the Sensex’s decline, decreasing 0.5%. Out of 30 shares in the Sensex index, 9 rose and 21 fell. In Australia, the S&P/ASX 200 index fell 0.5% to close at 7,206.30 after a strong US jobs report reinforced bets for aggressive Fed tightening. The RBA is also expected to lift rates on Tuesday, with the key debate centering on the size of the move. Read: Australia Set for Back-to-Back Rate Hikes Amid Split on Size Magellan was the worst performer after its funds under management for May declined 5.2% m/m. Tabcorp climbed after settling legal proceedings with Racing Queensland. In New Zealand, the market was closed for a holiday In FX, the dollar fell against its Group-of-10 peers as hopes for a recovery in China’s economy damped demand for the haven currency. The Bloomberg Dollar Spot Index fell 0.3% after posting a weekly gain on Friday. China’s equity index jumped after Beijing rolled back Covid-19 restrictions and received a further boost after a report that a ban on Didi adding new users may be lifted. “Further lifting of restrictions in Beijing helped Chinese equities, which spilled over into Europe with risk more ‘on’ than ‘off’,” Societe Generale strategist Kit Juckes wrote in a note to clients. “The dollar is once again on the back foot.” USD/JPY dropped 0.1% to 130.73. It touched 130.99 earlier, inching closer to the 131.35 reached last month, which was the highest since April 2002.  “Dollar-yen is being sold for profit-taking because we don’t have enough catalysts to break 131.35,” said Juntaro Morimoto, a currency analyst at Sony Financial Group Inc. in Tokyo. But, should US inflation data due this week be higher than estimated, it will see dollar-yen break 131.35. In rates, Treasuries, though off session lows, remained under pressure as S&P 500 futures recover a portion of Friday’s loss. 10-year TSY yields rose 1bp to 2.95%, extending the streak of advances to five days, the longest in eight weeks; UK 10-year yield underperformed, jumping 6bps to 2.21% after domestic markets were closed Thursday and Friday for a holiday. US auctions resume this week beginning Tuesday, while May CPI report Friday is the main economic event. IG dollar issuance slate includes Tokyo Metropolitan Govt 3Y SOFR; this week’s issuance slate expected to be at least $25b. Three- month dollar Libor +3.90bp to 1.66500%. Bund, Treasury and gilt curves all bear-flatten, gilts underperform by about 2bps at the 10-year mark. Peripheral spreads tighten to Germany. In commodities, WTI crude futures hover below $120 after Saudis raised oil prices for Asia more than expected. Spot gold is little changed at $1,851/oz. Spot silver gains 1.5% near $22. Most base metals trade in the green; LME nickel rises 5.4%, outperforming peers. LME tin lags, dropping 0.7%. There is no major economic data on the US calendar. Market Snapshot S&P 500 futures up 1.1% to 4,152.50 STOXX Europe 600 up 0.9% to 443.90 MXAP up 0.6% to 169.12 MXAPJ up 0.8% to 558.02 Nikkei up 0.6% to 27,915.89 Topix up 0.3% to 1,939.11 Hang Seng Index up 2.7% to 21,653.90 Shanghai Composite up 1.3% to 3,236.37 Sensex little changed at 55,772.44 Australia S&P/ASX 200 down 0.4% to 7,206.28 Kospi up 0.4% to 2,670.65 German 10Y yield little changed at 1.29% Euro up 0.2% to $1.0742 Brent Futures up 0.5% to $120.28/bbl Gold spot up 0.0% to $1,851.93 U.S. Dollar Index down 0.22% to 101.92 Top Overnight News from Bloomberg Boris Johnson will face a leadership vote in his ruling Conservative Party on Monday following a series of scandals, including becoming the first sitting prime minister found to have broken the law. Chinese regulators are concluding probes into Didi and two other US-listed tech firms, preparing as early as this week to lift a ban on their adding new users, the Wall Street Journal reported, citing people familiar with the matter. The European Central Bank is set to strengthen commitment to support vulnerable euro-area debt markets if they are hit by a selloff, the Financial Times reported, citing unidentified people involved in the discussions. A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mixed following last Friday's post-NFP losses on Wall St and ahead of this week's global risk events - including central bank meetings and US inflation data, while participants also digested the latest Chinese Caixin PMI figures and the North Korean missile launches. ASX 200 was pressured by weakness in tech and mining, with sentiment not helped by frictions with China. Nikkei 225 pared early losses but with upside limited by geopolitical concerns after North Korean provocations. Hang Seng and Shanghai Comp. were encouraged by the easing of COVID restrictions in Beijing, while the Chinese Caixin Services and Composite PMI data improved from the prior month but remained in contraction. Sony Group (6758 JT) said its planned EV JV with Honda Motor (7267 JT) may hold a public share offering, according to Nikkei. Top Asian News China’s Beijing will continue to roll back its COVID-19 restrictions on Monday including allowing indoor dining and public transport to resume in most districts aside from Fengtai and some parts of Changping, according to Reuters and Bloomberg. Furthermore, a China health official called for more targeted COVID control efforts and warned against arbitrary restrictions for COVID, while an official also said that Jilin and Liaoning should stop the spread of COVID at the border. Australia accused China of intercepting a surveillance plane and said that a Chinese military jet conducted a dangerous manoeuvre during routine surveillance by an Australian plane over international waters on May 26th, according to FT. BoJ Governor Kuroda said Japan is absolutely not in a situation that warrants tightening monetary policy and the BoJ's biggest priority is to support Japan's economy by continuing with powerful monetary easing, while he added Japan does not face a trade-off between economic and price stability, so can continue to stimulate demand with monetary policy, according to Reuters. European bourses are firmer on the session, Euro Stoxx 50 +1.3%, with newsflow thin and participants reacting to China's incremental COVID/data developments during reduced trade for Pentecost. Stateside, futures are bid to a similar extent in a paring of the post-NFP pressure on Friday, ES +1.0%, with no Tier 1 events for the region scheduled today and attention very much on inflation data due later. Chinese regulators intend to conclude the DiDi (DIDI) cybersecurity probe, and remove the ban on new users, via WSJ citing sources; could occur as soon as this week. DIDI +50% in pre-market trade Top European News Most of the ECB governing council members are expect to back proposals to create a bond-purchase programme to buy stressed government debt, such as Italy, according to sources cited by the FT. Confidence vote in UK PM Johnson to occur between 18:00-20:00BST today, results to be immediately counted, announcement time TBC. London’s Heathrow Airport ordered carriers to limit ticket sales for flights until July 3rd to maintain safety amid understaffing and overcrowding, according to The Times. French Finance Minister Le Maire expects positive economic growth this year although will revise economic forecasts in July, according to Reuters. EU Commissioner Gentiloni said he aims to propose reform for the EU stability pact after summer which could envisage a specific debt/GDP target for each country, while he added that Italy should show commitment to keeping public debt under control and needs to avoid increasing current spending in a permanent way, according to Reuters. FX Pound perky on return from long Platinum Jubilee holiday weekend as UK yields gap up in catch up trade and Sterling awaits fate of PM; Cable above 1.2550 to probe 10 DMA, EUR/GBP tests 0.8550 from the high 0.8500 area. Dollar eases off post-NFP peaks as broad risk sentiment improves and DXY loses 102.000+ status. Kiwi lofty as NZ celebrates Queen’s birthday and Aussie lags ahead of RBA awaiting a hike, but unsure what size; NZD/AUD above 0.6525, AUD/USD sub-0.7125 and AUD/NZD cross closer to 1.1050 than 1.1100. Euro firmer amidst further declines in EGBs, bar Italian BTPs, eyeing ECB policy meeting and potential news on a tool to curb bond spreads, EUR/USD nearer 1.0750 than 1.0700. Loonie underpinned by rise in WTI after crude price increases from Saudi Arabia, but Lira extends losses irrespective of CBRT lifting collateral requirements for inflation linked securities and Government bonds; USD/CAD under 1.2600, USD/TRY not far from 16.6000. Fixed income Gilts hit hard in catch-up trade, but contain losses to 10 ticks under 115.00 awaiting the outcome of no confidence vote in PM Johnson Bunds underperform BTPs ahead of ECB on Thursday amidst reports that a new bond-buying scheme to cap borrowing costs may be forthcoming; 10 year German bond down to 149.59 at worst, Italian peer up to 123.15 at best US Treasuries relatively flat in post-NFP aftermath and ahead of low-key Monday agenda comprising just employment trends Commodities Crude benchmarks are bid by just shy of USD 1.00/bbl; though, overall action is contained amid limited developments and two-way factors influencing throughout the morning. Saudi Aramco increased its prices to Asia for July with the light crude premium raised to USD 6.50/bbl from USD 4.40/bbl vs Oman/Dubai, while it raised the premium to North West Europe to USD 4.30/bbl from USD 2.10/bbl vs ICE Brent but maintained premiums to the US unchanged from the prior month. Oman announced new oil discoveries that will increase output by 50k-100k bpd in the next 2-3 years, while it noted that its crude reserves stand at 5.2bln bbls and gas reserves are at around 24tln cubic feet, according to the state news agency citing the energy and minerals minister. Libya's El Sharara oil field resumed production at around 180k bpd after having been shut by protests for more than six weeks, according to Argus. French Finance Minister Le Maire said that France is in discussions with the UAE to replace Russian oil supplies, according to Reuters. US will permit Italy’s Eni and Spain’s Repsol to begin shipping oil from Venezuela to Europe as early as next month to replace Russian crude, according to Reuters citing sources familiar with the matter. Austria released strategic fuel reserves to cover for loss of production at a key refinery due to a mechanical incident, according to Reuters. Indonesia will adjust its palm oil export levy with the regulations that will outline the changes expected soon, according to a senior official in the economy ministry cited by Reuters. Turkish presidential spokesman Kalin said deliveries of Ukrainian grain via the Black Sea and through the area of the strait could begin in the near future, according to TASS citing an interview with Anadolu news agency. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap Later this morning, I will be publishing the 24th Annual Default Study entitled "The end of the ultra-low default world?". Please keep an eye out for it but I won't let you miss it in the EMR and CoTD over the next few days! For those in the UK, I hope you had a good four-day weekend. We went to two big parties and my digestive system and liver need a rest. Well, until my upcoming birthday this weekend!. One of the parties had a converted VW campervan with 5 or 6 self-service drinks taps on the outside of which one was filled with ice cold Prosecco. Thankfully the Queen doesn't have a 70-year Jubilee very often! The fun and games in markets this week are heavily back ended as an ECB meeting on Thursday is followed by US CPI on Friday. The rest of the week is scattered with production and trade balance data, while Chinese aggregate financing data is expected at some point. The Fed are now on their pre-FOMC blackout so the attention will be firmly on the ECB this week. So let's preview the two main events. For the ECB, our European economists believe the ECB will confirm that APP net purchases will cease at the end of the month, paving the way for policy rate lift-off at the July meeting. Our economists believe the ECB will have to hike rates by 50 basis points at either the July or September meeting, with the risks skewed toward the latter, to accelerate the policy hiking cycle in light of growing inflationary pressures. Our economists also believe that hiking cycle will ultimately reach a 2 percent terminal rate next summer, some 50 basis points into restrictive territory. As prelude, next week watch for the staff's forecast to upgrade inflation to 2 percent in 2024, satisfying the criteria for lift-off. With all three lift-off conditions met, expect the statement language to upgrade rate guidance for the path of the hiking cycle. Meanwhile, the June meeting should also bring about the expiration of the TLTRO discount. There are two interesting things for the ECB to consider at the extreme end of the spectrum at the moment. Firstly German wages seem to be going higher. In a note on Friday, DB's Stefan Schneider (link here) updated earlier work on domestic wage pressures by highlighting that on Thursday night, the 700k professional cleaners in the country achieved a 10.9% pay rise. In addition, with the nationwide minimum wage legalisation voted through on Friday, the lowest paid in this group will get a +12.6% rise from October. At the other end of the spectrum 10yr Italian BTPs hit 3.40% on Friday, up from 1.12% at the start of the year and as low as 2.85% intra-day the preceding Friday. We're confident that the ECB will create tools to deal with Italy's funding issues, but it is more likely to be reactive than proactive to ensure legal barriers to intervene are not crossed. However, the nightmare scenario we've all been hypothetically thinking about for years, if not decades, is here. Runaway German inflation at the same time as soaring Italian yields. The good news is that this should bring a lot more targeted intervention and a better-balanced policy response than in the last decade where negative rates and blanket QE was a one size fits all policy. High inflation will force the ECB to hike rates while managing the fall out on a more bespoke basis. It won't be easy, but it will likely be better balanced. Following on from the ECB, the next day brings the US CPI data. Month-over-month CPI is expected to accelerate to 0.7% from last month’s 0.3% reading. The core measure stripping out food and energy is expected to print at 0.5%. Those figures would translate to 8.3% and 5.9% for the year-over-year measures, respectively (from 8.3% and 6.2% last month). The Fed policy path for the next two meetings appears to be locked in to 50 basis point hikes, but Fed officials have highlighted the importance of inflation readings to determine the path of policy thereafter. There is a growing consensus that month-over-month inflation readings will have to decelerate in order to slow hikes to 25 basis points come September. Some Fed officials are still considering ramping the pace up to 75 basis points if inflation doesn’t improve. None appear to be considering zero policy action in September. Elsewhere, data will highlight production figures and the impact of the nascent tightening of financial conditions, with PMI, PPI, and industrial production figures due from a number of jurisdictions. Asian equity markets have overcame initial weakness this morning and are moving higher as I type. Across the region, the Hang Seng (+1.14%) is leading gains due to a rally in Chinese listed tech stocks. Additionally, the Shanghai Composite (+1.01%) and CSI (+1.06%) are also trading up after markets resumed trading following a holiday on Friday. The easing of Covid-19 restrictions in Beijing is helping to offset a miss in China’s Caixin Services PMI for May. It came in at 41.4 (vs. 46.0 expected), up from 36.2 last month. Elsewhere, the Nikkei (+0.30%) is also up while markets in South Korea are closed for a holiday. Outside of Asia, US stock futures have been steadily climbing in the last couple of hours before finishing this with contracts on the S&P 500 (+0.55%) and NASDAQ 100 (+0.65%) both in the green. US Treasuries are ever so slightly higher in yield. Recapping last week now and a renewed sense that global central banks would have to tighten policy more than was priced in given historic inflation drove yields higher and equity markets lower over the past week. This reversed a few weeks where market hike pricing had reversed. This move was driven by a series of inflationary data but also came right from the source, as Fed and ECB speakers sounded a hawkish tone ahead of their respective meetings in June. Elsewhere, OPEC+ met and agreed to expand daily production, which was followed by reports that President Biden would visit the Crown Prince in Saudi Arabia. Peeling back the covers. A series of ECB speakers openly considered the merits of +50bp hikes in light of growing inflation prints, as core Euro Area CPI rose to a record high, while German inflation hit figures not seen since the 1950s. In turn, 2yr bund yields climbed +30.9bps (+3.0bps Friday), and the week ended with +122bps of tightening priced in through 2022, the highest to date and implies some hikes of at least +50bps. A reminder that our Europe economists updated their ECB call to at least one +50bp hike in either July or September; full preview of that call and next week’s ECB meeting here. Yields farther out the curve increased as well, including 10yr bunds (+31.0bps, +3.6bps Friday), OATs (+32.3bps, +4.2bps Friday), and gilts (+23.8bps, +5.4bps Friday) on their holiday-shortened week. Italian BTP 10yr spreads ended the week at their widest spread since the onset of Covid at 212bps. The tighter expected policy weighed on risk sentiment, sending the STOXX 600 -0.87% lower over the week (-0.26% Friday). It was a similar story in the US, where a march of Fed officials, led by Vice Chair Brainard herself, again signed on for +50bp hikes at the next two meetings, and crucially, ruling out anything less than a +25bp hike in September. It appeared there was growing consensus on the Committee to size the September hike between +25bp and +50bps based on how month-over-month inflation evolves between now and then, with clear evidence of deceleration needed to slow the pace of hikes. The May CPI data will come this Friday but last week had a series of labour market prints that showed the employment picture remained white hot, capped on Friday with nonfarm payrolls increasing +390k and above expectations of +318k. Meanwhile, average hourly earnings maintained its +0.3% month-over-month pace. Treasury yields thus sold off over the week, with 2yr yields gaining +17.9bps (+2.5bps Friday) and 10yr yields up +20.1bps (+3.1bps Friday). The implied fed funds rate by the end of 2022 ended the week at 2.82%, its highest in two weeks, while the probability of a +50bp September hike ended the week at 66.3%, its highest in a month. The S&P 500 tumbled -1.20% (-1.63% Friday), meaning its run of weekly gains will end at a streak of one. Tech and mega-cap stocks fared better, with the NASDAQ losing -0.98% (-2.47% Friday) and the FANG+ fell -0.30% (-3.76% Friday). Elsewhere OPEC+ agreed to increase their production to +648k bls/day, after a steady flow of reports leaked that the cartel was considering such a move. Nevertheless, futures prices increased around +1.5% (+3.10% Friday) over the week, as it was not clear whether every member had the spare capacity to increase production to the new putative target, while easing Covid restrictions in China helped increase perceived demand. The OPEC+ announcement was closely followed by reports that President Biden would visit the Crown Prince in Saudi Arabia. Tyler Durden Mon, 06/06/2022 - 07:51.....»»

Category: blogSource: zerohedgeJun 6th, 2022

Texas Capital"s (TCBI) Strategic Plan to Aid Despite High Costs

Texas Capital's (TCBI) plan to expand its product offerings and digitalize operations will likely boost financials. However, escalating operating costs are concerning. Texas Capital Bancshares, Inc.’s TCBI strong capital position should help it undertake opportunistic expansions of its product offerings. However, rising costs and high debt levels are major woes.A rise in net interest income (NII) has been driving revenues and organic growth for Texas Capital over the past years. Revenues witnessed a compound annual growth rate (CAGR) of 2.1% over the last five years (2017-2021). The company’s strategic plan (announced in September 2021), underlining an expanded product offering and improving coverage in the potential markets, is expected to support revenue growth in the quarters ahead.Texas Capital plans to digitalize its operations by strategically designating in-house and third-party platforms to build scale and shore up its client experience. It intends to achieve simplified interactions and client enablement by focusing on infrastructure modernization through cloud-native platforms, application programming interfaces to support scale, refining digital tooling and process automation. This will be done across the workforce, realigning technology and operations resources across major spectrums of the business, enabling faster response times and client-centric development, and continual boost of cybersecurity and governance.Texas Capital’s relationship-based business model is likely to increase its market share, thereby driving loan and deposit growth in the upcoming period. Also, we believe that the company's loan pipeline and deposits are well-positioned to grow further, backed by an improving U.S. economy. Thus balance-sheet strength is a positive for TCBI.The company’s capital ratios remain above the levels required to be considered well-capitalized and have been enhanced with the additional capital raised since 2008. As of Mar 31, 2022, the ratio of tangible common equity to total tangible assets was 8.9% compared with 6.7% in the year-ago quarter.A CET1 ratio of 9-10% is expected by 2025. We believe that Texas Capital’s strong capital position would help it undertake opportunistic expansions in the foreseeable future.However, the bank continues to see a persistent rise in expenses over the past few years. This is due to efforts to hire experienced bankers, upgrade technology and expand footprints. These moves might boost Texas Capital’s growth in the long term, but the rising expense level is limiting the near-term bottom-line expansion. Management calls for low double-digit expense growth this year and positive operating leverage by late 2022 or first-quarter 2023.As of Mar 31, 2022, Texas Capital had total debt (comprising long-term debt and short-term borrowings) of $2.36 billion, which witnessed a volatile trend over the last few quarters. The company’s cash and due from banks as of Mar 31, 2022, was $234.9 million, up sequentially. Given the unsound liquidity position, its debt seems unmanageable. The company's significantly low cash levels will hurt if the economic situation worsens.Amid the Fed's accommodative monetary policy stance and the prevailing low-interest-rate environment, margins have been affected. Although the company might witness decent loan growth, supported by economic recovery and the recent rate hike with the possibility of additional increases in the future, margins are likely to be under pressure in the near term as the overall interest-rate environment remains low.So far this year, shares of TCBI have lost 8.9% compared with a 4.3% decline of the industry it belongs to. Image Source: Zacks Investment Research Currently, TCBI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Stocks That Warrant a LookA couple of better-ranked stocks in the banking space are Independent Bank Corporation IBCP and Civista Bancshares, Inc. CIVB. IBCP and CIVB currently carry a Zacks Rank of 2 (Buy).Independent Bank’s Zacks Consensus Estimate for current-year earnings has been revised 6.5% upward over the past 30 days. Over the past six months, shares of IBCP have declined 14.4%.Civista Bancshares also witnessed a 3% upward earnings estimate revision for 2022 over the past 30 days. Over the past six months, shares of CIVB have declined 10.9%. Just Released: The Biggest Tech IPOs of 2022 For a limited time, Zacks is revealing the most anticipated tech IPOs expected to launch this year. Concerns about Federal interest rates and inflation caused many private companies to stay on the bench- leading to companies with better brand recognition and higher growth rates getting into the game. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity. See the complete list today.>>See Zacks Hottest IPOs NowWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Texas Capital Bancshares, Inc. (TCBI): Free Stock Analysis Report Independent Bank Corporation (IBCP): Free Stock Analysis Report Civista Bancshares, Inc. (CIVB): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksMay 27th, 2022

Mastercard (MA) Platform to Extend Improved Cybersecurity Prowess

Mastercard (MA) launches the Cyber Front platform with the help of a minority investment in Picus. The platform tends to empower organizations to take prudent cybersecurity decisions. Mastercard Incorporated MA recently introduced the attack simulation and assessment platform, Cyber Front, in a bid to bolster the cybersecurity capabilities of businesses and governments. To roll out this platform, MA had undertaken a strategic minority investment in Picus Security, a leading platform for Breach and Attack Simulation (“BAS”).Shares of Mastercard gained 1.2% on May 25.Cyber Front utilizes a continually updated library containing more than 3,500 instances of real-world threats. Subsequently, it discloses security gaps and extends real-time mitigation insights for enabling organizations to gauge the effectiveness of their current systems, detect areas of exposure and take better decisions on cybersecurity investments. Prudent cybersecurity decisions enhance cybersecurity control of organizations for monitoring and countering threats, which, in turn, is likely to offer protection to their digital ecosystems over the immediate and long term.The recently launched platform forms part of the expanding Cybersecurity & Risk consulting practice of Mastercard. Additionally, management expects the Cyber Front platform to benefit Mastercard by bolstering its comprehensive and actionable data-driven services, which include authorization and fraud diagnostics, consumer and portfolio insights as well as consulting and marketing services. These services are likely to help those organizations (MA’s customers) tide over enterprise-wide risks and boost business growth.Markedly, Mastercard was prudent in choosing Picus for backing the Cyber Front platform. The reason behind selecting Picus can be attributed to its innovative technology in BAS (acknowledged by experts, one of which is the renowned research firm Frost & Sullivan) that assures to offer continuous protection from the current cyber threats.Initiatives similar to the latest one reinforce Mastercard’s sincere efforts to ease the continual identification of risks by organizations, helping them ace the digital transformation journey. Undoubtedly, digitization brought numerous benefits to organizations and consumers, but the trend prompted fraudsters to indulge in sophisticated and complex methods of cybercrimes.To address the growing incidence of cybercrimes, Mastercard boasts a strong cybersecurity suite developed through partnerships or significant investments in emerging cybersecurity technologies. The latest investment to roll out the Cyber Front platform, therefore, seems aptly timed. In December 2021, MA collaborated with Europol (also known as the European Union Agency for Law Enforcement Cooperation) to boost cyber resilience throughout Europe. Another remarkable move of Mastercard during last year, in an attempt to bolster its identity verification capabilities, was acquiring the leading provider of digital identity verification solutions Ekata and paving the way for safe and secured digital transactions for merchants as well as customers.An upgraded cybersecurity portfolio enables MA to extend enhanced fraud detection solutions, which, in turn, leads to an expanded global presence for the technology company in the global payments industry. These solutions are also a blessing in disguise for organizations that otherwise grapple with exorbitant costs in case of security breaches in the digital ecosystem of their businesses.Shares of Mastercard have gained 6.7% in the past six months against the industry’s 9.7% decline. MA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchSimilar to Mastercard, other companies like Visa Inc. V, PayPal Holdings, Inc. PYPL, and American Express Company AXP are continuously rolling out a diverse range of fraud detection solutions to protect merchants and consumers amid a growing digital economy.Visa launched the Advanced Identity Score in 2020 to minimize digital identity frauds and operational costs associated with identity-related forgeries. V steadily invests in technology to limit the impact of fraud and safeguard consumer and merchant-oriented information. The CyberSource solution by V boasts a diversified portfolio of payment and fraud management tools.PayPal continues to undertake significant investments to leverage the blockchain technology to boost digital identity capabilities. PYPL’s risk management and tokenization assure the legitimacy of transactions and prevent any illegal or fraudulent dealings.American Express remains steadfast in upgrading its digital arm for assisting merchants and Card Members across the globe. To complement the same, AXP also strives hard to come up with solutions that tend to offer protection to digital payment processes. In May 2022, American Express teamed up with Google to offer an enhanced checkout experience for AXP’s Card Members. While using Autofill on Chrome and Android, Card Members will be able to convert to and save virtual card numbers (VCN) that will take the place of the 15-digit physical card number, add an extra layer of safety from frauds and pave the way for seamless and secured shopping online and in Android apps.Shares of Visa and American Express have gained 3.8% and 1.7%, respectively, in the past six months. Meanwhile, PayPal stock has lost 57.2% in the same time frame. Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022? Last year's 2021 Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buysAccess Zacks Top 10 Stocks for 2022 today >>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 Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 26th, 2022

3 Software Stocks to Watch for in a Challenging Industry

Computer Software industry participants like Cadence Design Systems (CDNS), PTC (PTC) and Aspen Technology (AZPN) are benefiting from steady digital transformations and strong adoption of cloud computing, despite coronavirus-led disruptions. The Zacks Computer Software industry benefits from the pandemic-induced accelerated digital transformation drive across the globe. Software is ubiquitous and has become the focal point of technological innovation. Apart from running devices and applications, its usage has been extended to managing infrastructure. The industry is primarily gaining from the ongoing cloud transition. The role of software is constantly evolving. With the continuation of remote work setup and mainstream adoption of the hybrid/flexible work model, the demand for voice and video communication software and productivity software is expected to increase exponentially. These trends bode well for industry participants like Cadence Design Systems CDNS, PTC PTC and Aspen Technology AZPN.Industry DescriptionThe Zacks Computer Software industry comprises companies that provide software applications related to cloud computing, electronic product designing, digital media and marketing, customer relationship management, on-premises and cloud-based database management, accounting and tax purposes, human capital management, cybersecurity and application performance monitoring and cloud-based enterprise communications platform among others. Some of the companies specialize in developing and marketing simulation software (like the computer-aided design or “CAD”, 3D modelling, product lifecycle management or “PLM”, data orchestration and experience creation), which are used by engineers, designers and researchers across a broad spectrum of industries like architecture, engineering and construction; product design and manufacturing; and digital media.3 Trends Shaping the Future of the Software IndustryHigher Spending on Software Aids Prospects: The industry’s prospects are bright, given higher spending by the enterprises on software procurement. Continued investment in big data and analytics and the ongoing adoption of software as a service or SaaS open up significant opportunities for industry players. Cloud offers a flexible and cost-effective platform for developing and testing applications. The deployment time is also much shorter compared with legacy systems. SaaS companies are expected to register strong top-line growth on a higher percentage of recurring revenues, subscription gross margin and a lower churn rate.Cloud Computing Adoption Gaining Traction: The increasing need to secure the cloud platforms, amid growing incidents of cyber-attacks and hacking, is driving demand for cyber security software. Enterprises are focused on rapid migration to cloud and DevOps technologies to achieve scalability and agility for software development and IT operations. This helps in delivering a flawless digital experience to clients. This trend has brought immense value to application and infrastructure performance monitoring. It is driving the demand for performance management monitoring tools that are scalable and suitable for cloud-based environments.Mainstream adoption of Hybrid/Remote Work to Drive Demand: The continuation of work-from-home and the mainstream adoption of the distributed workforce model are fueling demand for enterprise communication, workspace management and human capital management software solutions, among others. However, the evolving coronavirus situation particularly in China and the geopolitical instability due to the Russia-Ukraine war have aggravated the already strained global supply chain troubles. Increasing inflation could affect spending across small- and medium-sized businesses globally. The uncertainty in business visibility could dent the industry’s performance in the near term. Zacks Industry Rank Indicates Dim ProspectsThe Zacks Computer Software industry is housed within the broader Zacks Computer And Technology sector. It carries a Zacks Industry Rank #150, which places it in the bottom 41% of more than 253 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. 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.Despite the gloomy industry outlook, a few stocks have the potential to outperform the market. But before we present the top industry picks, it is worth taking a look at the industry’s shareholder returns and current valuation first.Industry Outperforms Sector But Lags S&P 500The Zacks Computer Software industry has outperformed the broader Zacks Computer and Technology sector but underperformed the S&P 500 Index in the past year.The industry has lost 7.3% over this period compared with the S&P 500 and the broader sector’ decline of 7% and 22.4%, respectively.One-Year Price PerformanceIndustry's Current ValuationOn the basis of forward 12-month P/E, which is a commonly used multiple for valuing software companies, we see that the industry is currently trading at 25.27X compared with the S&P 500’s 16.91X. It is also above the sector’s forward-12-month P/E of 19.61X.In the last five years, the industry has traded as high as 37.04X, as low as 22.63X and at the median of 27.56X, as the chart below shows.Forward 12-Month Price-to-Earnings (P/E) RatioForward 12-Month P/E Ratio3 Software Stocks to Snap Up Right NowAspen Technology: Bedford, MA-based Aspen Technology provides asset optimization software solutions. The company’s performance is gaining from improving customer demand. Its diversified product portfolio, especially its asset optimization and management software solutions and Asset Performance Management (APM) suite, is witnessing healthy momentum. Strategic acquisitions are likely to boost the top line going forward. The integration with Emerson’s OSI Inc and the Geological Simulation Software business bodes well in the long haul.In the past year, shares of Aspen Technology have moved up 35.3%. The consensus mark for this Zacks Rank #1 company’s fiscal 2022 earnings is pegged at $5.47 per share, up 3% in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here. Price and Consensus: AZPNCadence Design Systems: Based in San Jose, CA, Cadence offers products and tools that help customers design electronic products. The company is well-positioned to gain from strength across segments like digital & signoff solutions and functional verification suite. Expanding product portfolios and frequent product launches are key catalysts.  In 2021, Cadence introduced 13 new products, including Cadence Helium Virtual and Hybrid Studio and Allegro X. Increasing investments in emerging trends like Internet-of-things (IoT), augmented and virtual reality (AR/VR) and autonomous vehicle sub-systems present significant growth opportunities for the company in the long haul. The recent acquisitions of Pointwise and NUMECA are expected to boost the top line.In the past year, shares of Cadence have returned 13.5%. The consensus mark for this Zacks Rank #2 company’s 2022 earnings is pegged at $3.89 per share, up 4.3% in the past 60 days.Price and Consensus: CDNSPTC: Boston, MA-based PTC provides software solutions and services globally that help manufacturing companies design, operate and manage products. The company’s top-line performance is driven by robust demand for products (digital transformation and SaaS) across all segments and regions. The company is also working toward accelerating the SaaS transition by increasing the capacity of its Atlas platform and improving its SaaS capabilities. PTC is witnessing robust adoption of Creo CAD and Windchill solutions. Strategic acquisitions have played a pivotal part in developing the company’s business in the last few years.The consensus mark for this Zacks Rank #2 company’s fiscal 2022 earnings is pegged at $4.46 per share, up 5.4% in the past 60 days.Price and Consensus: PTC  Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report Aspen Technology, Inc. (AZPN): Free Stock Analysis Report PTC Inc. (PTC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 25th, 2022

Kratos (KTOS) Buys ISR Provider for $80M, Boosts Portfolio

Kratos (KTOS) announces that it has acquired the engineering division of Southern Research, which tends to boost its position in the defense space. Kratos Defense & Security Solutions, Inc.KTOS recently revealed that it acquired Alabama-based Southern Research’s Engineering division ("SRE"). Considering the increased funding for the fiscal 2023 defense budget, this buyout should bolster Kratos’ growth in the defense market.The move comes in sync with the company’s intent to grow and expand its business through meaningful and strategic acquisitions.Details of the AcquisitionKratos acquired SRE for a consideration of $80 million, which comprises $75 million in cash and $5 million in the shares of Kratos common stock. KTOS aims to generate value through this opportunistic acquisition by acquiring its 54-acre campus with varied facilities and machinery and equipment to perform various tasks, which comprise 25% of the buyout price.Moreover, Kratos intends to carry out the operations of this newly formed business unit, Kratos SRE, under its Kratos Defense and Rocket Support Services Division.Benefits of the AcquisitionSRE’s expertise and excellence in developing multi-faceted defense products like hypersonic, space, missile, missile defense, strategic deterrence, propulsion systems and energy applications as well as the Intelligence Surveillance and Reconnaissance sensor must play a major catalyst for Kratos’ growth in the strategic weapon system arena.Moreover, the acquisition will aid the company in winning more contracts from the Pentagon, with the fiscal 2023 US defense budget proposing an investment of $773 billion for the Department of Defense (DoD), which implies a 4.1% increase from fiscal 2022’s enacted amount.Furthermore, the acquisition provides a platform for expansion for Kratos, with the customer acceptance of certain SRE products already in development and nearing completion.In the light of the aforementioned factors, we believe that the recent acquisition by the company is a prudent one as it is likely to be accretive to its organic growth trajectory going forward. This, in turn, may bolster its revenue generation prospects from a diverse range of products.Peer ProspectsConsidering the increased investment proposal for DoD in 2022, other defense majors that are likely to benefit are:Lockheed Martin LMT is the world’s largest defense contractor and the largest military aircraft manufacturer and the prime contractor of the F-35 Joint Strike Fighter Program. Other notable products include the F-16 Fighting Falcon and the C-130 Hercules.Lockheed Martin’s long-term earnings growth rate is pegged at 5.7%. LMT shares have returned 15.3% in the past year.Northrop Grumman NOC is one of the top U.S. defense contractors in terms of revenues. Its product line is well-positioned in high-priority categories, such as defense electronics, unmanned aircraft and missile defense. Some of its notable products are the B-2 Spirit strategic bomber, the E-8C Joint STARS surveillance aircraft, the RQ-4 Global Hawk and the T-38 Talon supersonic trainer.Northrop Grumman has a long-term earnings growth rate of 6.1%. NOC’s investors have gained 28.4% in the past year.Raytheon Technologies RTX researches, develops and manufactures advanced technology products in the aerospace and defense industry, including aircraft engines, avionics, aerostructures, cybersecurity, guided missiles, air defense systems, satellites and drones. Some of its defense product ranges include the Advanced Medium Range Air-to-Air Missile, the TOW Weapon System, U.S. Navy's SPY-6 Radars, Javelin Missile and the SkyCeptor missile.Raytheon Technologies has a long-term earnings growth rate of 10.5%. Shares of RTX have returned 7.7% in the past year.Price MovementIn the past year, shares of Kratos have declined 45.9% compared with the industry’s decline of 2.4%.Image Source: Zacks Investment ResearchZacks RankKratoscurrently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Northrop Grumman Corporation (NOC): Free Stock Analysis Report Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report Raytheon Technologies Corporation (RTX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 25th, 2022

Five Major Challenges Facing The Energy Industry

Five Major Challenges Facing The Energy Industry Authored by Irina Slav via OilPrice.com, Record-high prices at the pump, a looming diesel shortage right when the summer season is starting, and an uncooperative OPEC are probably reasons for many headaches among government officials around the world. Yet these are, in fact, manifestations of deeper problems in the energy industry. Underinvestment  In the past decade or so, Europe and, to a lesser but no less significant extent, North America, have made it their mission to reduce their reliance on fossil fuels and increase their reliance on renewable energy. This has spurred an investor exodus from oil and gas and the emergence of the so-called ESG investing trend. Money for new oil and gas developments has become more difficult to tap as banks join the ESG movement, and companies have had to cut back on spending. Saudi Arabia's oil minister warned that underinvestment in oil and gas would have a boomerang effect on consumers earlier this year, and he is not the only one. Many OPEC officials have made the same warning but, apparently, to no avail. After all, none other than the International Energy Agency said last year the world does not need new oil and gas exploration because we won't be needing any more new oil or gas supply. Of course, it was only a few months later that the IEA changed its tune, calling on OPEC to boost production, and it demonstrated one of the harsh realities of the energy industry: you cannot reverse a process that has been going on for years in a matter of months. Low discovery rates A topic that doesn't get much talked about, the average rate of new oil and gas discoveries is, in a way, comparable to the average conversion rate of solar panels: it is well below 30 percent. Bloomberg recently reported that three wells that Shell had drilled offshore Brazil had come up dry. The supermajor had paid $1 billion for drilling rights in the area and had spent three years drilling to come up empty-handed. Exxon had also failed to tap any significant oil reserves in its Brazilian blocks, which cost it $1.6 billion. The news highlights the risky nature of oil and gas exploration even in places like Brazil, which has been touted as the next hot spot in the industry, probably alongside Guyana. Brazil has become a magnet for supermajors because of its prolific presalt zone, but, as one local energy consultant told Bloomberg, the big discoveries have already been made—back when the discovery rate was close to 100 percent. The average successful discovery rate for the oil and gas industry is much lower than that, however, at 24.8 percent, according to Bloomberg. And there are fewer and fewer big discoveries to be made. Production cost inflation Broader inflation trends, in large part driven by soaring energy costs, have not passed the energy industry itself. In the U.S. shale patch, production costs have risen by some 20 percent. Two companies recently warned they would be reporting higher costs for their second quarters, Continental Resources and Hess Corp, and they are far from the only ones experiencing these higher costs. Shortages of raw materials such as frac sand and, earlier this year, steel piping for wells, are one reason for the production cost inflation, not just in the shale patch but everywhere where these raw materials are used in oil fields. A shortage of labor is a special problem for the U.S. shale patch, too, helping to drive production costs higher. Lingering supply chain problems from the pandemic are also in the mix. The bigger problem is that the industry is not expecting any respite in the coming months, either, as Argus recently reported, citing oil and gas executives. The production cost squeeze comes at a time when the federal government really needs more oil and gas, which is probably the worst possible time as it has discouraged drillers further from spending more on new drilling. Cyberattacks Cybersecurity has become a cause for concern in the energy industry in the past few years as cyberattacks have multiplied significantly. The Colonial Pipeline hacking really helped out things in perspective on the cybersecurity front, but little action followed, it seems. A brand new survey by DNV, the Norwegian risk assessment and quality assurance consultancy, revealed this week that the industry is quite uneasy about cyberthreats and, what's worse, not really prepared to handle them. According to the study, 84 percent of executives expect cyberattacks will lead to physical damage to energy assets, while more than half—54 percent—expect cyberattacks to result in the loss of human life. Some 74 percent of the respondents expect environmental damage as a result of a cyberattack. And only 30 percent know what to do if their company becomes a target of such an attack. Geopolitics The most chronic risk in the energy industry, geopolitics is never far away when prices start swinging wildly or, as is the case right now, remain stubbornly high. The prospect of an EU oil embargo on Russia, although dimming in the past few days, is one big bullish factor for oil prices. The lack of progress on Iran nuclear talks is another. And then there is, of course, OPEC's evident unwillingness to respond to calls from the West for more oil. Russia itself does not seem bothered by the embargo prospects at all. "The same oil that they [the EU countries] bought from us will have to be purchased elsewhere, and they will pay more, because the prices will definitely rise; and once the cost of delivery and freight increase, it will be necessary to invest in building the corresponding infrastructure," Deputy Prime Minister Alexander Novak said this week. Iran is meanwhile boosting its oil exports, which go almost exclusively to China. The country has signaled it will not agree to a deal with the U.S. unless the U.S. meets its demands, and it appears that the ball is now in Washington's court. In the meantime, China will have Iranian oil, but no one else will. For the U.S., the price problem has become so dire that now President Biden is seeking a meeting with the Saudi Crown Prince Mohammed, whom he has consistently refused to communicate with, instead communicating with his father, King Salman. Biden has also been openly critical of MbS for his alleged role in the killing of a dissident Saudi journalist, calling the Kingdom a "pariah" with "no redeeming social value." Geopolitics can be awkward. Tyler Durden Mon, 05/23/2022 - 21:40.....»»

Category: blogSource: zerohedgeMay 23rd, 2022

How to boost cybersecurity with managed print services

Printing is essential for most businesses. From documents to flyers, newsletters, and annual reports, most commercial enterprises devote a significant part of their budgets to printing. Most modern printers are connected to the business’ network and are therefore a potential gateway for hackers. That’s why printer security is one of the most critical ways to secure your office. Partnering with a managed print services (MPS) provider can help. What is managed print services? A managed print….....»»

Category: topSource: bizjournalsMay 23rd, 2022

How to boost cybersecurity with managed print services

Printing is essential for most businesses. From documents to flyers, newsletters, and annual reports, most commercial enterprises devote a significant part of their budgets to printing. Most modern printers are connected to the business’ network and are therefore a potential gateway for hackers. That’s why printer security is one of the most critical ways to secure your office. Partnering with a managed print services (MPS) provider can help. What is managed print services? A managed print….....»»

Category: topSource: bizjournalsMay 23rd, 2022

Morgan Stanley: We Are About To Find Out The Cost Of Remodeling A Global Economy

Morgan Stanley: We Are About To Find Out The Cost Of Remodeling A Global Economy By Michael Zezas, Head of Public Policy Research at Morgan Stanley What’s the cost of remodeling a global economy? What’s the benefit? Ready or not, we’re about to find out. Why? Because geopolitical events are accelerating important secular trends: The “slowbalization” of economic and national interests eating away at globalization; and The shift from a single economic power base and set of rules to a “multipolar world.” While the sell-off in risk markets is getting attention now, our conversations with corporate decision-makers and policy-makers are increasingly taken up with how to deal with these two important and overlapping transitions. These decisions have long-term consequences, so investors need to understand how their choices may play out. Our latest Blue Paper is a guide to navigating these secular trends, with frameworks we developed in 2019 ("The Slowbalization Playbook") and 2020 ("Investing for a Multipolar World", both reports are available to zerohedge professional subscribers). For the sake of your Sunday, here’s what you need to know, in brief: Geopolitics are accelerating slowbalization and the multipolar world, providing more incentives to near-shore or “friend-shore” supply chains: To be clear, these trends didn’t start with Russia invading Ukraine or even US/China trade tensions. Services trade was already outpacing goods trade, and automation has been reducing the primacy of low-cost labor. But the incentives for companies and policy-makers to rethink globalization have been amplified by recent geopolitical developments. A bipartisan consensus emerged in the US around an existential need to outcompete China. The result in 2018 was tariff and non-tariff barriers (i.e., export restrictions), the latter meant to protect the US advantage in key technologies. We expect these barriers to endure and boost costs beyond the directly taxed sectors, like semis, to industries like auto batteries and AI that are adopting these new technologies. The pandemic served painful notice for some sectors that paying up for ”just in case” instead of “just in time” inventories might be the only way to avoid the supply chain bottlenecks caused by lockdowns, mask mandates, or other restrictions. And Russia’s invasion of Ukraine and the subsequent sanctions cut off exports of energy and agricultural products to Europe and other parts of the globe. Relying on allies rather than rivals yields supply chain security. With transitions come costs and lingering inflation… Consider that Europe now is eager to build infrastructure to import natural gas from the US to avoid reliance on Russia. Or consider a hypothetical American multinational moving some of its production out of China to avoid new US export controls. This shift comes not only with a cost but also fresh uncertainties around labor and infrastructure in the new locale. Our equity research colleagues believe that profit margins could face headwinds in sectors like European chemicals, European and Asian midstream and downstream natural gas utilities, auto OEMs, consumer staples, portions of leisure, and transportation. ...but transitions also drive opportunity. All this "geopolitical capex" has to drive capital somewhere. Some geographies and sectors are likely beneficiaries: For US and European companies, friend-shoring is more attractive in countries with larger labor pools, competitive wage costs, and trade agreements with key end markets. In varying ways and to varying degrees, Mexico, India, and Turkey are recipient candidates. And regardless of the location, building these new supply chains will almost surely drive a pick-up in demand – and profits – in sectors like semiconductor capital equipment, automation, clean tech, defense/cybersecurity, industrial gases, cap goods, and metals/mining. Of course, this transition is a multi-year project. And as in any remodel, we expect many hidden costs and benefits to emerge along the way. We’ll keep updating our playbook, and you, as we move through the process. Tyler Durden Sun, 05/22/2022 - 14:40.....»»

Category: smallbizSource: nytMay 22nd, 2022

PwC Chair says the "war for talent" could last another decade. Why he"s never seen a more challenging time for CEOs.

PwC Chair Tim Ryan expects corporate M&A will stay strong, 2022 earnings will be solid, and that a war for talent could last another decade. PwC's US chairman, Tim Ryan, expects the war for talent could last for years.PwC PwC's Ryan says while the headlines can be scary, many CEOs he talks to say business is good. The barrage of hurdles leaders face means 'There's never been a more challenging time to be a CEO.' Corporate earnings should still be good in 2022 but it won't be a repeat of the banner 2021 numbers. Tim Ryan, the US chair of the accounting firm PricewaterhouseCoopers, believes the landscape for US companies isn't as treacherous as it might appear from day-to-day headlines that ring of war, unchecked inflation, and slumping markets.Even if surging prices and higher interest rates end up pushing the economy into a slower gear, Ryan told Insider he expected strong corporate dealmaking to continue and that a "war for talent" could stretch on for a decade.The CEOs Ryan talks to are doing as much worrying as ever. Yet for many, business remains robust. "Demand is up. Revenue growth is good. When you look at the innovation capabilities that people have, they feel pretty good," Ryan said. "When you talk to a CEO, he or she generally would say, 'My business is doing well.'" There are clear exceptions, of course. Challenges at big names like Facebook's parent company, Meta, and Netflix have investors worried that there are bigger economic potholes ahead. After peaking in November, the tech-heavy Nasdaq has slumped more than 26%, while the S&P 500 index is off about 16% from its high at the start of the year.Ryan, 56, said the CEOs he talked to didn't expect the US economy to crater, in part because spending by these companies' customers remains strong. He said companies were remaking their businesses to cultivate new sources of revenue and cutting costs where they could. Ryan also expects mergers and acquisitions to continue despite the Federal Reserve's interest-rate hikes, which are designed to slow inflation and keep the economy from overheating. "M&A is really strong, even though rates have gone up a little bit. We anticipate M&A will continue to be very strong," he said.Corporate earningsRyan, who joined PwC at 22, predicted 2022 would prove a solid year for corporate earnings by historical standards, though not compared with the windfalls from 2021."What's on the minds of many CEOs is they feel like '22 will be a good year, but will it be enough for their investors?" he said. "I think it'll be younger companies reporting good numbers, but the comparables are going to be tough."Leadership in the most challenging timeThe number of fastballs coming at chief executives — from supply-chain worries to increased calls in some quarters for unionization of workforces — make the job increasingly difficult, Ryan said. Heads of companies, he said, are facing scrutiny on corporate-tax rates, data privacy and security, whether their algorithms are fair and ethical, workplace safety, and environmental, social, and governance concerns."There's never been a more challenging time to be a CEO," Ryan said.The companies that succeed amid all this, he said, will be the ones where the CEO can drive change. "Almost every company needs to change, and the bigger the company, the harder it is to change." Ryan pointed to bigger companies' larger workforces, sprawling legacy systems, and global footprints. Each can present additional hurdles for making swift changes.Another big challenge is simply understanding what is working, what isn't, and what the mood is among employees, customers, and suppliers. "Proximity to what is actually happening on the ground is critical," Ryan said. "When I look at the most successful companies, the CEO and the boards have a really good pulse on what's actually happening."The best corporate boards focus on hiring and firing the CEO and avoid getting mired in issues that can seem important but are ultimately distractions, Ryan said. A danger for a board that takes on too much is that when a variety of issues seem to be under control, it's easy to overlook cracks that might be forming."You can lull yourself into a false sense of security that every single thing we're looking at is green, but nine greens or 19 greens don't add up to an overall green if you're not focused on the right things," he said.The war for talentRyan said strong business formations, an aging workforce, and pandemic-inspired retirements for some workers meant it's likely companies would continue to compete with each other to bring on enough people for years, perhaps as long as a decade. "Even if the economy slows a bit," he said, "I think the war for talent continues to stay strong."It's a battle in which PwC has been engaging as it seeks to add to its US workforce of about 55,000. Last year, the company said it would boost its global workforce by more than one-third by 2026 as it expanded into areas like artificial intelligence and cybersecurity. Ryan said the company had been studying how to better serve its workers before the pandemic and that some of the ideas — considerations like a four-day workweek — that seemed bold at the time now felt less so. The pandemic forced a worldwide experiment in new ways to work; many of these innovations are likely to endure. "Ultimately, what we concluded is that the debate around physical versus virtual was the wrong discussion and the wrong debate for us," Ryan said. "Talent wants choice." PwC surveyed its client-service staff and found more than three-quarters wanted a mix of in-office and remote work; 22% opted to be fully remote.The No. 2 consultancy behind Deloitte in terms of revenue is giving workers greater autonomy to determine the types of assignments they take on, how much they work, and what kind of training they pursue to develop their skills. This flexibility for workers means companies like PwC will need to be more creative in how they draw up their labor pools. Ryan said that rather than requiring 55,000 people in the US, the firm might need 70,000 if some workers wanted to work 20 or 30 hours a week. Ultimately, Ryan said, successful businesses will be ones that treat their employees more like customers. "There isn't a business in their right mind that will tell the consumer what they want. The consumer says what they want," he said. What's nextThe pandemic, inflation, and other challenges that seemed to emerge overnight have pushed many corporate leaders to think more about how to be ready for the unexpected. "The name of the game is scenario planning," Ryan said. That translates to things like reducing risks associated with supply chains or making sure operations aren't concentrated in one location. "The corporate world is doing a really good job of getting used to scenario planning. And then, obviously, being agile with what you know what you can't plan for," he added.Ryan said he expected to see businesses change at a faster pace, as developments like Web3, which would remake the internet using blockchain technology, could once again reshape how businesses operate."I see more automation, more business-model transformation, than we've ever seen before. It's hard for us to find a client who is not focused on some type of transformation," he said. "I know this is cliché, but the pace of change has never been faster."Disclosure: Mathias Döpfner, CEO of Business Insider's parent company, Axel Springer, is a Netflix board member.Read the original article on Business Insider.....»»

Category: personnelSource: nytMay 16th, 2022

TD SYNNEX (SNX) Ties Up With California"s Broadcom Software

TD SYNNEX (SNX) teams up with Broadcom Software to help its channel partners enhance customer experiences while ensuring better growth opportunities in the SMB segment. TD SYNNEX SNX recently announced that it entered into a cybersecurity aggregator partner agreement with California-based IT company Broadcom Software. Per the new agreement, SNX will enable its channel partners to improve customer experiences and be financially rewarded in return.TD SYNNEX’s move will not only increase customer retention but also offer the partners an opportunity for growth.The latest move will help the partner community drive key customer initiatives for Broadcom’s cybersecurity portfolio Symantec. The deal intends to benefit Symantec resellers and customers in the small and medium-sized businesses (SMB) customer segments in North America while ensuring strong margins, partner support and upsell or cross-sell opportunities. TD SYNNEX Corp. Price and Consensus TD SYNNEX Corp. price-consensus-chart | TD SYNNEX Corp. QuoteBroadcom Software will also provide channel partner programs, sales tools, value-based pricing options and incentives to boost SMB segment growth.Through this pact, both companies aim to strengthen customers’ reliability while accelerating their digital transformation journey. TD SYNNEX has been benefiting from consecutive deal wins since its formation, following the merger of SYNNEX and Tech Data Corporation in the first week of September 2021.In January, 2022, TD SYNNEX announced a new strategic collaboration with Amazon Web Services, Inc. Through a separate deal, SNX partnered with MicroStrategy, an enterprise analytics platform that delivers modern, consumer-grade experiences for every role on every device for the North American region.In December 2021, TD SYNNEX’s wholly-owned subsidiary Tech Data India announced a partnership with Zscaler to enable its partners to purchase security solutions and services as part of the Zscaler Zero Trust Exchange platform directly from Tech Data India.Previously in October 2021, TD SYNNEX’s legacy company Tech Data collaborated with Hewlett Packard Enterprise in the Asia Pacific to grow its distribution of HPE GreenLake cloud services in the region, enabling partners to access a robust set of cloud services that help customers tackle their most challenging business outcomes.In the same month, TD SYNNEX’s legacy company Tech Data signed a distributor agreement with Freshworks Inc. to make the latter’s suite of products for business solutions available in the India region.TD SYNNEX is committed to boost its organic growth profile with more strategic acquisitions and deal wins that complement and expand its existing capabilities. The merger of TD SYNNEX with Tech Data is expected to be significantly accretive to SNX’s bottom line. The deal is anticipated to contribute solid synergy benefits to SNX’s top line in the near term.Zacks Rank & Other Key PicksTD SYNNEX currently carries a Zacks Rank #2 (Buy). Shares of SNX have declined 15.9% in the past year.Some other top-ranked stocks from the broader Computer and Technology sector are Avnet AVT, Gogo GOGO and Analog Devices ADI. While Avnet sports a Zacks Rank #1 (Strong Buy), Gogo and Analog Devices carry a Zacks Rank of 2 at present. You can see the complete list of today's Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Avnet's fourth-quarter fiscal 2022 earnings has been revised 55 cents northward to $1.96 per share over the past seven days. For 2022, earnings estimates have moved 20.5% north to $6.83 per share in the past seven days.Avnet's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average being 21.2%. Shares of AVT have increased 6.5% in the past year.The Zacks Consensus Estimate for Gogo's first-quarter 2022 earnings has been revised a penny downward to 13 cents per share over the past 30 days. For 2022, GOGO's earnings estimates have moved a couple of cents south to 63 cents per share in the past seven days.Gogo's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average being 65%. Shares of GOGO have soared 58.9% in the past year.The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised 4 cents upward to $2.12 per share over the past 30 days. For fiscal 2022, earnings estimates have moved 11 cents north to $8.43 per share in the past 30 days.Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average being 6%. Shares of ADI have inched up 3.5% in the past year. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Analog Devices, Inc. (ADI): Free Stock Analysis Report Avnet, Inc. (AVT): Free Stock Analysis Report TD SYNNEX Corp. (SNX): Free Stock Analysis Report Gogo Inc. (GOGO): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 9th, 2022

Expeditors (EXPD) Stock Up Post Q1 Earnings Report: Here"s Why

Higher year-over-year revenues at all segments boost Expeditors' (EXPD) Q1 results. Despite the cyberattack woes, Expeditors International of Washington EXPD outperformed in first-quarter 2022, both on the top and the bottom-line front. Evidently, EXPD’s first-quarter 2022 earnings of $2.05 per share surpassed the Zacks Consensus Estimate of $1.77. The bottom line improved 22.75% year over year. The outperformance, despite the challenges, pleased investors. As a result, the stock gained in early trading.Expeditors International of Washington, Inc. Price, Consensus and EPS Surprise Expeditors International of Washington, Inc. price-consensus-eps-surprise-chart | Expeditors International of Washington, Inc. QuoteMainly due to the February attack, airfreight tonnage volume and ocean container volume decreased 18% and 3%, respectively, on a year-over-year basis. Total revenues of $4,664.3 million outperformed the Zacks Consensus Estimate of $4,175.6 million and also increased 38.9% year over year. Higher revenues across all units boosted the top line.Airfreight Services revenues increased 20.56% year over year to $1.59 billion in the first quarter. Ocean Freight and Ocean Services revenues skyrocketed more than 100% to $1.98 billion. Customs Brokerage and Other Services revenues climbed 18.55% year over year to $1.09 billion.Operating income rose 19.77% to $461.76 million in the March quarter on the back of higher revenues. Total operating expenses escalated 49.3% to $4.21 billion. Due to the cyberattacks, EXPD incurred significant costs for recovering its operational and accounting systems and enhancing its cybersecurity protections.As a result of Expeditors’ inability to process and move shipments through ports on a timely basis, it had to shell out approximately $40 million as incremental demurrage charges.During the first quarter of 2021, Expeditors, currently carrying a Zacks Rank #3 (Hold), did not repurchase any shares. EXPD exited the March quarter with cash and cash equivalents of $2.14 billion compared with $1.73 billion at the end of 2021.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings SnapshotsWithin the broader Transportation sector, the likes of J.B. Hunt Transport Services JBHT, CSX Corporation CSX and United Airlines UAL reported first-quarter 2022 results.J.B. Hunt reported better-than-expected first-quarter 2022 earnings. Quarterly earnings of $2.29 per share surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on the back of higher revenues across all segments.Total operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year.CSX Corp’s first-quarter 2022 earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny despite the decrease in overall volumes as supply-chain issues continue to dent results. The bottom line improved 25.81% year over year owing to higher revenues, aided by increased shipping rates.Total revenues of $3,413 million outperformed the Zacks Consensus Estimate of $3291.2 million. The top line increased 21.33% year over year.United Airlines incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss incurred by UAL as coronavirus concerns continue to weigh on air-travel demand.  Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million.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 Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report United Airlines Holdings Inc (UAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 3rd, 2022

Top Research Reports for Novo Nordisk, AMD & Netflix

Today's Research Daily features new research reports on 16 major stocks, including Novo Nordisk A/S (NVO), Advanced Micro Devices, Inc. (AMD), and Netflix, Inc. (NFLX). Tuesday, April 26, 2022 The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Novo Nordisk A/S (NVO), Advanced Micro Devices, Inc. (AMD), and Netflix, Inc. (NFLX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>> Shares of Novo Nordisk have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+53% vs. +28.4%). Novo Nordisk’s marketed diabetes drug, Ozempic, is off to a solid start. The launch of Rybelsus also looks impressive. Yearly growth is driven by all geographical areas. Novo Nordisk has one of the broadest diabetes portfolios in the industry. Ozempic, Rybelsus, Xultophy and Saxenda have been helping the company maintain momentum. The Zacks analyst believes that Label expansion of these existing drugs is expected to further boost sales. However, lower realized prices in the Unites States, loss of exclusivity for products and stiff competition are affecting sales. Sales are also being negatively impacted by the COVID-19 pandemic. Also, the supply challenges for Wegovy has hurt the stock. The patent expiry on some of the products in Novo Nordisk’s portfolio is concerning too. (You can read the full research report on Novo Nordisk here >>>) Advanced Micro Devices shares have gained +2.2% over the past year against the Zacks Electronics - Semiconductors industry’s gain of +4.4%. The company is benefiting from strong demand of its Ryzen and EPYC server processors, courtesy of the increasing proliferation of Artificial Intelligence (AI) and Machine Learning (ML) in industries like cloud, gaming and data center. The growing clout of 7 nanometer (nm) products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst. AMD provided strong 2022 guidance for revenues backed by robust growth across all businesses. Higher server and client processor revenues are likely to lead to a sequential increase. The Xilinx and Pensando acquisitions will bolster AMD's data center business. Alliances with Amazon, Microsoft, Baidu and JD.com are likely to augment business prospects. However, stiff competition from NVIDIA and Intel remains a concern. (You can read the full research report on Advanced Micro Devices here >>>) Netflix shares have declined -60.0% over the past year against the Zacks Broadcast Radio and Television industry’s decline of -43.0%. The company is suffering from stiff competition in the streaming space like Apple, Amazon prime video, HBO Max, Disney+, Peacock, Paramount+ and TikTok. The company’s leveraged balance sheet and higher streaming obligation are major concerns. Stiff competition, the unfavorable impact of account sharing, sluggish economic growth, increasing inflation, the Russia-Ukraine conflict and some continued disruptions from COVID-19. However, Netflix is expected to continue to dominate the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. (You can read the full research report on Netflix here >>>) Other noteworthy reports we are featuring today include Merck & Co., Inc. (MRK), Merck & Co., Inc. (MRK), and Marsh & McLennan Companies, Inc. (MMC).Mark VickerySenior Editor Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadNovo Nordisk's (NVO) Diabetes Drugs Aid Growth Amid RivalryRobust Product Portfolio & Partnerships Aid AMD's ProspectsWeak Content Slate & Stiff Competition Hurts Netflix (NFLX)Featured ReportsKey Drugs & Animal Health Unit Drive Merck's (MRK) SalesMerck's (MRK) drugs like Keytruda, Lynparza and Bridion have been driving sales. The Zacks analyst believes that Animal health and vaccine products remain core growth drivers.Strategic Buyouts Aid Morgan Stanley (MS), High Costs AilsPer the Zacks analyst, inorganic expansion plans to focus on less capital markets dependent businesses and solid balance sheet aid Morgan Stanley. Yet, rising operating costs remain a major concern.Per the Zacks analyst, a number of acquisitions help Marsh & McLennan Per the Zacks analyst, a number of acquisitions help Marsh & McLennan expand geographically, and diversify its portfolio. Yet, escalating expenses continue to weigh down margins.Focus on Permian Basin, Cost Management Aid Occidental (OXY)Per the Zacks analyst Occidental's efficient cost management and expansion of its operation Permian Basin through acquisition of Anadarko will drive its performance over the long run.Solid User Growth & Premium Content Demand Aids Snap (SNAP)Per the Zacks analyst, Snap benefits from an improving user growth driven by strong adoption of Augmented Reality (AR) Lenses and demand for premium Discover content and Shows. Solid Balance Sheet Supports BNY Mellon (BK) Amid Low RatesPer the Zacks analyst, solid balance sheet and efforts to improve efficiency through cost control will aid BNY Mellon. Despite the expected rate hikes, relatively low rates might hurt interest income.VeriSign (VRSN) Gains on Higher Demand for Domain NamesPer the Zacks analyst, VeriSign has been gaining from growth in .com and .net domain name registrations. However, surging expenses related to cybersecurity and infrastructure spending is a concern. New UpgradesSuncor (SU) to Benefit from Strong Liquidity PositionThe Zacks analyst likes Suncor's strong financial position. The company has near-term debt maturities of a mere C$1.8 billion and sits on more than C$4 billion in total liquidity.Pool Corp (POOL) Rides on Capacity Creation InitiativesPer the Zacks analyst, Pool Corp is likely to have benefitted from solid demand, healthy contractor backlogs and capacity-creation initiatives. Also, focus on expansions through acquisitions bode wellSolid Order Levels, Product Innovation Aid Manitowoc (MTW)Per the Zacks Analyst, solid order levels, product innovation as well as focus on cost controls and increasing productivity are likely to drive Manitowoc's results.New DowngradesSoft Hard Seltzer to Ail Boston Beer's (SAM) PerformancePer the Zacks analyst, Boston Beer has been reeling under slowed growth trends in hard seltzer for some time now. Q1 hard seltzer sales declined 3% in measured off-premise channels.Low Paper-Related Demand & High Debt Weaken Xerox (XRX)The Zacks analyst is pessimistic about Xerox grappling with decreased demand for paper-related systems and products. Also, low current ratio is worrisome.High Cost & Traffic Woes Likely to Hurt Cracker Barrel (CBRL)Per the Zacks analyst, Cracker Barrel is likely to be impacted by higher labor costs due to increased wages and dismal traffic. The company is apprehensive regarding incurring inflationary costs. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Morgan Stanley (MS): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report Novo Nordisk AS (NVO): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report Netflix, Inc. (NFLX): Free Stock Analysis Report Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 26th, 2022

"Dr. Doom" Warns Of The Gathering Global Stagflationary Storm

'Dr. Doom' Warns Of The Gathering Global Stagflationary Storm Authored by Nouriel Roubini via Project Syndicate, While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy’s only problems. Even without them, the medium-term outlook would be darkening, owing to a broad range of economic, political, environmental, and demographic trends. The new reality with which many advanced economies and emerging markets must reckon is higher inflation and slowing economic growth. And a big reason for the current bout of stagflation is a series of negative aggregate supply shocks that have curtailed production and increased costs. This should come as no surprise. The COVID-19 pandemic forced many sectors to lock down, disrupted global supply chains, and produced an apparently persistent reduction in labor supply, especially in the United States. Then came Russia’s invasion of Ukraine, which has driven up the price of energy, industrial metals, food, and fertilizers. And now, China has ordered draconian COVID-19 lockdowns in major economic hubs such as Shanghai, causing additional supply-chain disruptions and transport bottlenecks. But even without these important short-term factors, the medium-term outlook would be darkening. There are many reasons to worry that today’s stagflationary conditions will continue to characterize the global economy, producing higher inflation, lower growth, and possibly recessions in many economies. For starters, since the global financial crisis, there has been a retreat from globalization and a return to various forms of protectionism. This reflects geopolitical factors and domestic political motivations in countries where large cohorts of the population feel “left behind.” Rising geopolitical tensions and the supply-chain trauma left by the pandemic are likely to lead to more reshoring of manufacturing from China and emerging markets to advanced economies – or at least near-shoring (or “friend-shoring”) to clusters of politically allied countries. Either way, production will be misallocated to higher-cost regions and countries. Moreover, demographic aging in advanced economies and some key emerging markets (such as China, Russia, and South Korea) will continue to reduce the supply of labor, causing wage inflation. And because the elderly tend to spend savings without working, the growth of this cohort will add to inflationary pressures while reducing the economy’s growth potential. The sustained political and economic backlash against immigration in advanced economies will likewise reduce labor supply and apply upward pressure on wages. For decades, large-scale immigration kept a lid on wage growth in advanced economies. But those days appear to be over. Similarly, the new cold war between the US and China will produce wide-ranging stagflationary effects. Sino-American decoupling implies fragmentation of the global economy, balkanization of supply chains, and tighter restrictions on trade in technology, data, and information – key elements of future trade patterns. Climate change, too, will be stagflationary. After all, droughts damage crops, ruin harvests, and drive up food prices, just as hurricanes, floods, and rising sea levels destroy capital stocks and disrupt economic activity. Making matters worse, the politics of bashing fossil fuels and demanding aggressive decarbonization has led to underinvestment in carbon-based capacity before renewable energy sources have reached a scale sufficient to compensate for a reduced supply of hydrocarbons. Under these conditions, sharp energy-price spikes are inevitable. And as the price of energy rises, “greenflation” will hit prices for the raw materials used in solar panels, batteries, electric vehicles, and other clean technologies. Public health is likely to be another factor. Little has been done to avert the next contagious-disease outbreak, and we already know that pandemics disrupt global supply chains and incite protectionist policies as countries rush to hoard critical supplies such as food, pharmaceutical products, and personal protective equipment. We must also worry about cyberwarfare, which can cause severe disruptions in production, as recent attacks on pipelines and meat processors have shown. Such incidents are expected to become more frequent and severe over time. If firms and governments want to protect themselves, they will need to spend hundreds of billions of dollars on cybersecurity, adding to the costs that will be passed on to consumers. These factors will add fuel to the political backlash against stark income and wealth inequalities, leading to more fiscal spending to support workers, the unemployed, vulnerable minorities, and the “left behind.” Efforts to boost labor’s income share relative to capital, however well-intentioned, imply more labor strife and a spiral of wage-price inflation. Then there is Russia’s war on Ukraine, which signals the return of zero-sum great-power politics. For the first time in many decades, we must account for the risk of large-scale military conflicts disrupting global trade and production. Moreover, the sanctions used to deter and punish state aggression are themselves stagflationary. Today, it is Russia against Ukraine and the West. Tomorrow, it could be Iran going nuclear, North Korea engaging in more nuclear brinkmanship, or China attempting to seize Taiwan. Any one of these scenarios could lead to a hot war with the US. Finally, the weaponization of the US dollar – a central instrument in the enforcement of sanctions – is also stagflationary. Not only does it create severe friction in international trade in goods, services, commodities, and capital; it encourages US rivals to diversify their foreign-exchange reserves away from dollar-denominated assets. Over time, that process could sharply weaken the dollar (thus making US imports more costly and feeding inflation) and lead to the creation of regional monetary systems, further balkanizing global trade and finance. Optimists may argue that we can still rely on technological innovation to exert disinflationary pressures over time. That may be true, but the technology factor is far outnumbered by the 11 stagflationary factors listed above. Moreover, the impact of technological change on aggregate productivity growth remains unclear in the data, and the Sino-Western decoupling will restrict the adoption of better or cheaper technologies globally, thereby increasing costs. (For example, a Western 5G system is currently much more expensive than one from Huawei.) In any case, artificial intelligence, automation, and robotics are not an unalloyed good. If they improve to the point where they can create meaningful disinflation, they also would probably disrupt entire occupations and industries, widening already large wealth and income disparities. That would invite an even more powerful political backlash than the one we have already seen – with all the stagflationary policy consequences that are likely to result. Tyler Durden Tue, 04/26/2022 - 06:30.....»»

Category: blogSource: zerohedgeApr 26th, 2022

3 Internet Software Stocks to Buy in a Challenging Industry

The Zacks Internet software industry participants like Splunk (SPLK), Paylocity Holding (PCTY) and Rimini Street (RMNI) benefit from high demand for SaaS due to the increasing need for remote working, learning and diagnosis software as well as cybersecurity applications. The Zacks Internet Software industry is benefiting from accelerated demand for digital transformation and the ongoing shift to the cloud. The high demand for SaaS-based solutions due to the increasing need for remote working, learning and diagnosis software as well as cybersecurity applications has been a major driving factor. Robust IT spending on software is a positive factor for industry participants like Splunk SPLK, Paylocity Holding PCTY and Rimini Street RMNI. However, increased geopolitical risks due to the Russia-Ukraine conflict, higher wage inflation, currency fluctuations and pandemic-inducted supply-chain disruptions are hurting the industry’s prospects. Further, despite the fact that risk related to new coronavirus variants remains a concern, the growing demand for solutions supporting hybrid operating environments is noteworthy.Industry DescriptionThe Zacks Internet Software industry comprises companies offering application performance monitoring as well as infrastructure and application software, DevOps deployment and Security software. Industry participants offer multi-cloud application security and delivery, social networking, online payment and 3D printing applications and solutions. The industry participants use the SaaS-based cloud computing model to deliver solutions to end-users as well as enterprises. Hence, subscriptions are the primary source of revenue. Advertising is also a major source of revenue. Industry participants target a variety of end-markets, including banking & financial services, service providers, federal governments and animal-health technology and services.3 Trends Shaping the Future of the Internet Software IndustryGrowing Adoption of SaaS: The industry is benefiting from continued demand for digital transformation. Growth prospects are alluring primarily due to the rapid adoption of SaaS, which offers a flexible and cost-effective delivery method of applications. It also cuts down on deployment time compared to legacy systems. SaaS attempts to deliver applications to any user, anywhere, anytime and on any device. It has been effective in addressing customer expectations of seamless communications across multiple channels, including voice, chat, email, web, social media and mobile. This drives customer satisfaction and increases retention rate, thereby driving the top line of industry participants. Moreover, the SaaS delivery model has supported industry participants to deliver software applications amid coronavirus-led lockdowns and shelter-in-place guidance. Remote working, learning and diagnosis have also boosted demand for SaaS-based software applications.Pay-As-You-Go Model Gaining Traction: The increasing customer-centric approach is allowing end-users to perform all the required actions with minimal intervention by the software provider. Moreover, the pay-as-you-go model helps Internet Software providers scale their offerings according to the needs of different users. Further, the subscription-based business model ensures recurring revenues for industry participants. The affordability of the SaaS delivery model, particularly for small and medium businesses, is also a major driver. The cloud-based applications are easy to use. Hence, the need for specialized training reduces significantly, which lowers expenses, thereby driving profits.Ongoing Transition to Cloud Creates Opportunities: Additionally, the growing need to secure cloud platforms, amid growing incidence of cyber-attacks and hacking, drives demand for web-based cyber security software. Further, as enterprises continue to move their on-premise workload to cloud environments, application and infrastructure monitoring is gaining importance. This is creating more demand for web-based performance management monitoring tools.Zacks Industry Rank Indicates Dim ProspectsThe Zacks Internet Software industry, within the broader Zacks Computer And Technology sector, carries a Zacks Industry Rank #186 that places it in the bottom 27% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.Despite the gloomy industry outlook, a few stocks have the potential to outperform the market. But before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first.Industry Lags Sector and S&P 500The Zacks Internet Software industry has underperformed the broader Zacks Computer And Technology sector as well as the S&P 500 Index in the past year.The industry has declined 47.5% over this period against the S&P 500 Index’s rise of 5.7% and the broader sector’s decline of 10.4%.One-Year Price PerformanceIndustry's Current Valuation On the basis of trailing 12-month price-to-sales (P/S), which is a commonly used multiple for valuing Internet Software stocks, we see that the industry is currently trading at 2.58X compared with the S&P 500’s 4.58X and the sector’s trailing 12-month P/S of 4.45X.Over the last three years, the industry has traded as high as 6.75X, as low as 2.25X and at the median of 4.88X, as the chart below shows.Trailing 12-Month Price-to-Sales (P/S) Ratio3 Stocks to Buy Right NowRimini Street – Shares of this Zacks Rank #1 (Strong Buy) company have returned 2.3% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Rimini Street is benefiting from an expanding clientele. The company’s robust portfolio that addresses the needs of various industries is expected to remain strong in the near term. Growing demand for Application Management Services solutions is expected to benefit Rimini Street’s top-line growth in the long run.The Zacks Consensus Estimate for Rimini Street’s 2022 earnings stands at 58 cents per share, unchanged in the past 30 days.Price and Consensus: RMNI Paylocity Holding – This Illinois-based Zacks Rank #2 (Buy) company offers cloud-based payroll and human capital management software solutions to medium-sized organizations across the United States.Paylocity is benefiting from the growing adoption of its solutions among clients with less than 50 employees. Healthy momentum in the company’s core and the upper end of the market is a tailwind. Further, the release of the Learning Management System and Community portal, which garnered positive feedback from clients, is encouraging. Also, the addition of on-demand pay to its portfolio is likely to boost client wins in the long haul.Paylocity’s stock has declined 15.2% year to date. The consensus mark for its fiscal 2022 earnings is pegged at $2.64 per share, unchanged in the past 30 days.Price and Consensus: PCTY  Splunk – This San Francisco, CA-based company gains from strong execution across its platform, observability and security businesses as organizations partner with it to secure their infrastructure.Splunk’s software can be deployed in various computing environments, from a single laptop to large distributed data centers. This feature is helping Splunk win customers. The integration with Amazon Web Services security hub to help customers accelerate response to potential threats is a key catalyst.Splunk’s shares have gained 19% year to date. The Zacks Consensus Estimate for this Zacks Rank #2 company’s fiscal 2023 loss has stayed at 18 cents per share over the past 30 days.Price and Consensus: SPLK  Just Released: Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022? Last year's 2021 Zacks Top 10 Stocks portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buysAccess Zacks Top 10 Stocks for 2022 today >>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 Splunk Inc. (SPLK): Free Stock Analysis Report Paylocity Holding Corporation (PCTY): Free Stock Analysis Report Rimini Street, Inc. (RMNI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 19th, 2022

Mastercard (MA) Aids Organizations to Manage Third-Party Risk

Mastercard (MA) teams up with Interos to empower financial institutions with the latter's credible risk-monitoring capabilities for quickly addressing third-party risk in their businesses. Mastercard Incorporated MA recently collaborated with the rapidly growing operational resilience company Interos to expand the latter’s multi-tier risk monitoring prowess to financial institutions. Simultaneously, the partnership reflects MA’s efforts to boost its security capabilities.Powered by artificial intelligence and machine learning, the Interos platform plots, tracks and models the intricate network of business relationships that is integral to the global trade. With the platform offering an aggregate operational resilience risk score, organizations can conveniently assess those companies with which they are engaged in trade for identifying susceptibilities related to multiple risk dimensions.Evidently, the financial institutions get prompt insights, which equip them well to eradicate risks across their business networks and merchant relationships in cyber, financial, ESG, restrictions, geopolitical and operational areas.The latest tie-up highlights Mastercard’s sincere efforts to ease continual identification of risks for financial institutions, thus saving them from incurring exorbitant costs, which otherwise occur in case of potential disruption in one’s business ecosystem. The Interos platform with its widespread reach to more than 345 million entities and 18 billion business relationships seems the apt partner for complementing MA’s endeavor.With the global risk landscape rapidly evolving via a continuous development of more sophisticated and complex business risks, this MA-Interos partnership seems aptly timed.Prevalence of an increasing number of complex and interconnected supplier, and merchant business relationships might indicate the development of threats amid the third-party business network of an organization. This necessitates empowering enterprises with the capability to promptly address third-party risk, which unfortunately many organizations are still devoid of.Per Interos research, a mere proportion (11%) of organizations keeps a continual check on their third-party risk. A study conducted by RiskRecon, a buyout of  Mastercard, signals the increasing priority of 63% surveyed organizations to manage third-party risk.Initiatives similar to the latest one also clearly indicate one of Mastercard’s most prominent endeavors, which is to upgrade security in the digital ecosystem. The COVID-19 pandemic further necessitated organizations to integrate digitization into operations as it has penetrated every sphere of life so far.While digitization definitely brought numerous benefits to organizations and consumers, the trend to go digital prompted fraudsters to indulge in sophisticated methods of cybercrimes. This continues to be an alarming concern because payments received by organizations and the confidential data of consumers are compromised. Thus, companies offering a comprehensive portfolio of fraud detection solutions for varied industries with higher accuracy will be best positioned to gain from the current scenario.Mastercard made consistent efforts in the form of partnerships or significant investments to enhance its cybersecurity suite. MA has a program in place to safeguard its network and platforms from cyber and information security threats. The technology company in the global payments industry also has the support of Security Operations Centers, Fusion Centers and the Mastercard Intelligence Center to immediately identify and address various cyber and physical threats.Shares of Mastercard have inched up 0.4% in the past six months against the industry’s decline of 14.3%. MA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchSimilar to Mastercard, other companies like Visa Inc. V, PayPal Holdings, Inc. PYPL and American Express Company AXP are continuously rolling out a diverse range of fraud detection solutions to protect merchants and consumers amid a growing digital economy.Visa introduced the Advanced Identity Score in 2020 to minimize digital identity frauds and reduce its operational costs linked with identity-related forgeries. V steadily invests in technology to minimize the impact of fraud, and safeguard consumer and merchant-oriented information. The CyberSource solution by V boasts a diversified portfolio of payment and fraud management tools.PayPal made substantial investments to utilize blockchain technology for boosting digital identity capabilities. PYPL’s risk management and tokenization ensure legitimacy of transactions and prevent any illegal or fraudulent dealings.American Express strives hard to enhance its digital arm for assisting its merchants and Card members across the globe. In June 2021,  AXP collaborated with a few online fraud-prevention companies like Accertify, Microsoft and Riskified. In July 2020, AXP launched its proprietary automated accounts payable (AP) solution American Express One AP, considering robust demand for AP solutions that secure payment processes via digitization.American Express stock has gained 3.7% in the past six months. Meanwhile, shares of Visa and PayPal have lost 5.7% and 61%, respectively, in the same time frame. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 13th, 2022

RLI or KNSL: Which P&C Insurance Stock is Worth Investing?

Let's see how RLI Corp. (RLI) and Kinsale Capital (KNSL) fare in terms of some of the key metrics. The Zacks Property and Casualty Insurance industry has been doing well, thanks to better pricing, prudent underwriting, increased adoption of technology, increased exposure, and impressive solvency level. Streamlining operations, diversifying business, favorable reserve development and expanding global presence have been tailwinds for the industry players.The industry has rallied 18.4% in the past year compared with the Zacks S&P 500 composite’s rise of 9% and the Finance sector’s 5.5% growth.Image Source: Zacks Investment ResearchAgainst this backdrop, let’s take a look at two leading P&C insurer companies, namely RLI Corp. RLI and Kinsale Capital Group, Inc. KNSL, and find out which stock is more profitable to add to your portfolio for better returns.RLI, with a market capitalization of $4.9 billion, is an insurance holding company that underwrites property and casualty insurance in the United States and internationally. Kinsale Capital, with a market capitalization of $5.3 billion, is a property and casualty insurance company that focuses exclusively on the excess and surplus lines (E&S) market in the United States. Both the companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Per the Swiss Re Institute, global non-life premiums are expected to increase 3.7% in 2022 and 3.3% in 2023. It also expects global insurance premiums to exceed $7 trillion by mid-2022. Increasing risk awareness and above-average natural driving improved pricing, are likely to support the premium growth.Per Willis Towers Watson’s 2022 Insurance Marketplace Realities report, the commercial insurance market is likely to witness a shift toward normalcy in 2022, as the rate increases for commercial lines of insurance are declining to single digits and even flat renewals.Fitch predicts a double-digit rate hike for property catastrophe insurance in 2022. Fitch also expects 2022 to be the fifth successive year of price rises, even though growth is expected to be slower than 2021.Price hikes, operational strength, higher retention, strong renewal, the appointment of retail agents and higher new business premiums should help write higher premiums.The property and casualty insurance industry remains exposed to catastrophe loss stemming from natural disasters and weather-related events, inducing volatility in its underwriting results. Per Swiss Re, natural catastrophes resulted in a total global economic loss of $270 billion and insured loss of $111 billion in 2021. The Colorado State University expects above-normal activity during the 2022 hurricane season and there will be a total of 19 named storms during the Atlantic hurricane season. Riding on exposure growth, improved pricing, prudent underwriting, favorable reserve development and a sturdy capital position, the insurance industry will be able to absorb catastrophe losses.Banking on solid capital position, property and casualty industry players are pursuing strategic mergers and acquisitions, which are likely to expand their geographic reach, increase the scale and add new technology capabilities. M&A activities are also likely to strengthen portfolios, diversify operations and enable the companies to penetrate into more profitable market segments. Per Deloitte Insights, M&A activity across the insurance industry increased in 2021. Deloitte’s global outlook survey projects more merger and acquisition strategies in 2022.The insurers have increased investment in emerging technologies in a bid to drive efficiency, enhance cybersecurity, upgrade policy administration and claims systems as well as expand automation capabilities across the organization. The adoption of technologies such as robotic process automation, Chatbot and RoboAdvisory, artificial intelligence and data analytics, insurtech solutions, telematics and cloud computing is gaining steam. Deloitte’s Global survey expects insurers’ technology budget to increase 13.7% in 2022.In the latest FOMC meeting, Fed approved its first interest rate increase by 25 basis points to a range of 0.25-0.5%, its first interest rate increase since 2018. Fed also indicated three interest rate hikes in 2023. The insurers are poised to benefit from the recent rate increase, as they are beneficiaries of a rising rate environment. A larger invested base, directing funds to alternative investments like private equity, hedge funds, and real estate, is expected to boost investment income in the future.Now let’s take a look at two leading players in the industry: RLI & KNSL.Price PerformanceKinsale Capital has rallied 36.9% in the past year versus the industry’s increase of 18.4% and RLI’s 4.3% decline.Image Source: Zacks Investment ResearchReturn on Equity (ROE)Kinsale Capital, with a return on equity of 20.5%, exceeds RLI’s ROE of 14.5% and the industry average of 5.9%.Image Source: Zacks Investment ResearchValuationThe price-to-book value is the best multiple used for valuing insurers. Compared with Kinsale Capital’s reading of 7.59, RLI is cheaper, with a reading of 4.06. The P&C insurance industry’s P/B ratio is 1.42.Image Source: Zacks Investment ResearchDividend YieldRLI’s dividend yield of 0.9% is better than Kinsale Capital’s 0.2%. Thus, RLI is in an advantageous position over Kinsale Capital on this front.Image Source: Zacks Investment ResearchDebt to EquityKinsale Capital’s debt-to-equity ratio of 6.1 is lower than the industry average of 22.5 and Markel’s reading of 16.2.Earnings Surprise HistoryRLI has a solid record of beating earnings estimates in the last six quarters. Kinsale Capital has a record of beating earnings estimates in five of the last six quarters.Hence, RLI has an edge in this regard over Kinsale Capital.Growth ProjectionThe Zacks Consensus Estimate for 2022 earnings indicates 15.3% growth from the year-ago reported figure for Kinsale Capital and the same for RLI implies a decline of 1.8%.Combined RatioKinsale Capital’s combined ratio was 77.1% in 2021, whereas that of RLI was 86.8% in the said time frame. Thus, the combined ratio of Kinsale Capital is better than that of RLI.Estimate MovementFor 2022, the Zacks Consensus Estimate for RLI has moved 1.3% north to $3.80 in the past 60 days and the same for Kinsale Capital has been revised 5.9% upward to $6.62. Therefore, Kinsale Capital is in an advantageous position over RLI on this front.To ConcludeOur comparative analysis shows that Kinsale Capital has an edge over RLI with respect to price, return on equity, leverage, growth projection, estimate movement and combined ratio, while RLI scores higher in terms of dividend yield, valuation and earnings surprise history. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI): Free Stock Analysis Report Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 11th, 2022

Top Stock Reports for Costco, AstraZeneca & Medtronic

Today's Research Daily features new research reports on 16 major stocks, including Costco Wholesale Corporation (COST), AstraZeneca PLC (AZN), and Medtronic plc (MDT). Friday, April 8, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Costco Wholesale Corporation (COST), AstraZeneca PLC (AZN), and Medtronic plc (MDT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>> Shares of Costco have outperformed the Zacks Retail - Discount Stores industry over the past year (+69.5% vs. +23.7%), reflecting the company's growth strategies, better price management, decent membership trend, and increasing penetration of e-commerce business. The strategy to sell products at discounted prices has helped draw customers seeking both value and convenience. These factors have been aiding in registering impressive sales and earnings numbers.Costco put up a decent performance in second-quarter fiscal 2022, wherein both the top and the bottom lines improved year over year. Also, Costco has been witnessing stellar comps sales run. While the aforementioned factors raise optimism. However, supply chain bottlenecks and higher labor and freight costs remain concerns. Any deleverage in SG&A rate may hurt margins.(You can read the full research report on Costco here >>>)Shares of AstraZeneca have outperformed the Zacks Large Cap Pharmaceuticals industry over the past year (+47% vs. +38.5%). The Zacks analyst believes that the company’s newer drugs, mainly cancer medicines, Lynparza, Tagrisso and Imfinzi should keep driving revenues. Its pipeline is strong with several phase III data readouts lined up. AstraZeneca has also engaged in external acquisitions and strategic collaborations to boost its pipeline while investing in geographic areas of high growth like emerging markets. Cost-cutting efforts should drive earnings.The Alexion buyout strengthens its immunology franchise, adding several drugs that can boost its top line. However, AstraZeneca’s diabetes franchise faces stiff competition while pricing pressure is hurting sales in the respiratory unit. Sales of some medicines are being hurt due to COVID-19. Sales are slowing down in key markets, China, due to pricing pressure.(You can read the full research report on AstraZeneca here >>>)Shares of Medtronic have outperformed the Zacks Medical - Products industry over the year-to-date period (+9.3% vs. -7.3%). Medtronic has registered organic growth in the Cardiovascular, Neuroscience and Diabetes segments. The company claims share gains in 60% of its businesses.However, the sluggish top-line results reflect the unfavorable market impact of COVID-19 and health system labor shortages. CRDN sales decreased in the mid-single digits, given the impact of COVID-19 on PCI procedures. Also, there have been low double-digit organic declines in RGR with sales of ventilators declining in the high-fifties as demand returns to pre-pandemic levels.(You can read the full research report on Medtronic here >>>)Other noteworthy reports we are featuring today include Equinor ASA (EQNR), Sony Group Corporation (SONY), and Applied Materials, Inc. (AMAT).Sheraz Mian Director of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>> Today's Must ReadDecent Comparable Sales Run to Fuel Costco's (COST) Top LineCancer Drugs Aid AstraZeneca (AZN) Sales Amid China ImpactMedtronic's (MDT) Market Share Grows Despite Forex HeadwindsFeatured ReportsBrand Focus to Aid Sony (SONY) Amid G&NS Segment WeaknessWhile Sony's focus on premium segment of branded products is helping it gain momentum, declining sales in the Game & Network Services (G&NS) segment is likely to dent margins, per the Zacks analyst. Applied Materials (AMAT) Rides on Foundry & Logic SpendingPer the Zacks analyst, solid customer spending in foundry and logic which are required in IoT, communications, 5G, automotive, power and sensor applications is benefiting Applied Materials.Booking Holdings (BKNG) Banks on Improving Customer BookingsPer the Zacks analyst, Booking Holdings is benefiting from increasing customer bookings owing to the ongoing vaccination drive and removal of travel restrictions worldwide.Technology, Loans Aid ICICI Bank (IBN), Credit Quality AilsPer the Zacks analyst, ICICI Bank's efforts to digitize operations, and steady loan and deposit growth will support profitability. However, worsening credit quality and higher costs are key concerns.Operating Prowess Aids Waste Management (WM) Amid High DebtThe Zacks Analyst is impressed with Waste Management's solid operational performance which has helped it strengthen its cash flow position. A debt-heavy balance sheet remains a concern.Pandemic-Led Strong Demand For PC & Printer Aid HP (HPQ)Per the Zacks analyst, increased demand for personal computers and printers amid the COVID-19 pandemic-led remote-working and online-learning wave is driving revenue growth for HP.Revenue Growth, Decline in Costs Aid Molina Healthcare (MOH)Per the Zacks analyst, Molina Healthcare's rising revenues can be attributed to strong premium revenues and solid membership growth. Efforts to control costs have been driving its margins.New UpgradesEquinor (EQNR) to Benefit From Rising Clean Energy DemandThe Zacks analyst is impressed by Equinor's massive investments in renewable projects comprising solar and wind energy. This makes it well-poised to capitalize on the rising clean energy demand.Eni (E) Banks on Renewables, Secures Ample Funding SourcesThe Zacks analyst likes Eni since the integrated energy firm is producing energy from renewables increasingly. Also, the company has secured sufficient funding sources to satisfy its financial needs.WestRock (WRK) Bets on E-Commerce Demand & AcquisitionsPer the Zacks analyst, WestRock will gain on robust e-commerce demand amid the pandemic as well as KapStone and other acquisitions which have boosted its product offerings and geographic presence.New DowngradesWeak End-Markets & High Costs to Hurt TriMas (TRS)The Zacks analyst is concerned that TriMas' top-line will continue to bear the brunt of weakness in aviation market while inflated material costs will hurt its bottom line performance.Weather Variation & Cybersecurity Risks Ail Exelon (EXC)Per the Zacks analyst, Exelon's ability to provide services can be impacted by extreme weather condition and cybersecurity threats poses risk to Exelon operation and impact its reputation.COVID Led Supply Chain Issue Impacts Leidos Holdings (LDOS)Per the Zacks analyst, Leidos might experience delays on certain contracts due to COVID induced supply chain challenges, especially around computer chips, which might impact its operations. Special Report: The Top 5 IPOs for Your Portfolio Today, you have a chance to get in on the ground floor of one of the best investment opportunities of the year. As the world continues to benefit from an ever-evolving internet, a handful of innovative tech companies are on the brink of reaping immense rewards - and you can put yourself in a position to cash in. One is set to disrupt the online communication industry. Brilliantly designed for creating online communities, this stock is poised to explode when made public. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity.>>See Zacks’ Hottest IPOs NowWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AstraZeneca PLC (AZN): Free Stock Analysis Report Medtronic PLC (MDT): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report Equinor ASA (EQNR): Free Stock Analysis Report Sony Corporation (SONY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksApr 8th, 2022

Futures, Yields And Oil All Rise On Last Day Of Turbulent Week

Futures, Yields And Oil All Rise On Last Day Of Turbulent Week After several extremely volatile days, US equity futures are ending the week in the green (for now) with European equities snapping two days of declines sparked by the Federal Reserve’s plan for aggressive monetary-policy tightening, and Asian stocks trading higher. S&P 500 and Nasdaq 100 futures trimmed earlier gains to trade 0.3% higher as traders weighed the latest developments about the war in Ukraine. Contracts on U.S. stock benchmarks trim earlier gains as traders weigh developments about the war in Ukraine.Nasdaq 100 futures flat; S&P 500 futures +0.1%; Dow Jones futures +0.2%. The dollar rose for a 7th consecutive week and US Treasuries sold off across the curve; gold and bitcoin were flat. Oil was steady after three days of losses stoked by plans to release millions of barrels of crude from strategic reserves and China’s demand-sapping virus outbreak. Markets had a subdued session yesterday after sinking more than 4% in the previous two days as hawkish signals from the Federal Reserve sent Treasury yields surging. Among notable premarket moves, Robinhood slid 3% after Goldman Sachs, not too long ago the lead underwriter on the company's IPO, cut their rating on the stock to sell, saying softening retail engagement levels and profitability concerns will likely limit any outperformance. Some other notable premarket movers: Alcoa (AA US) is 1.2% lower as Credit Suisse analyst Curt Woodworth trims his recommendation to neutral as he views LME aluminum prices near peak levels. Quidel (QDEL US) gained in extended trading Thursday after it posted preliminary revenue for the first quarter that beat the average analyst estimate. CrowdStrike (CRWD US) advanced 4.1%. Analysts responded positively after management set a framework to reach $5 billion in annual recurring revenue (ARR) by 2026, during the cybersecurity company’s investor briefing. WD-40 (WDFC US) is poised to gain after producing a “solid” beat in the second quarter, Jefferies said, adding that an increased market share and new product launches would support volume growth of 3% in 2022. Kura Sushi (KRUS US) shares rose in postmarket trading after the restaurant chain reported a year-over-year jump in quarterly sales. ACM Research (ACMR US) edged lower in extended trading Thursday after saying in a release its first quarter revenue would be “significantly below” expectations, but reiterated full-year revenue guidance for 2022. U.S. stocks are on course to snap a three-week winning streak with investors shedding risk assets following indications from the Fed of a faster-than-expected pace of tightening in monetary policy. Concerns are also growing about the impact of high inflation and slowing economic growth on corporate earnings. The two-year Treasury yield rose five basis points and the 10-year yield climbed one point, reversing some of the curve steepening seen in the wake of the Fed minutes Wednesday, which outlined plans to pare the central bank’s balance sheet by more than $1 trillion a year alongside interest-rate hikes. Global equities are nursing losses for the week as markets grapple with the Fed’s campaign against elevated price pressures, Russia’s grinding war in Ukraine and China’s Covid travails. The lockdown in Shanghai -- which recorded more than 21,000 new daily virus cases -- has become one of President Xi Jinping’s biggest challenges. Expectations are growing that China will take steps to support its economy. “Stocks have had a little bit of a harder time this week digesting the fact that interest rates are going to be higher” amid a major shift in expectations around monetary policy, Anthony Saglimbene, global market strategist at Ameriprise Financial Inc., said on Bloomberg Television. Still, U.S. equities saw a second straight week of inflows at $1.5 billion, with large-cap and growth stocks outperforming small-cap and value sectors, according to Bank of America strategists. Marija Veitmane, a senior strategist at State Street Global Markets, also said stocks still appeared to be the safest option. “Cash gives you nothing with 7% inflation, bonds just had one of the worse quarters in history, and then if you look at stocks, we still have decent earnings outlook, and to me the biggest attraction is really strong balance sheets,” she said on Bloomberg TV. In the latest news out of Ukraine, dozens were killed Friday morning as Russian troops allegedly bombed civilians waiting at a train station to be evacuated from the Donetsk region. Meanwhile, U.S. officials warned that the war may last for weeks, months or even years, as Kyiv’s foreign minister pleaded for urgent military assistance. Here are the latest Ukraine war developments: Ukraine intends to establish up to 10 humanitarian corridors on Friday, those leaving Mariupol will need to use private vehicles. Ukrainian advisor Podolyak says negotiations with Russia continue online constantly, but the mood changed after Bucha events, via Reuters. Kremlin says it does not understand EU concerns about European countries paying for Russian gas in RUB, adds Commission President von der Leyen probably needs more information. On planned EU ban of Russian coal, says coal is in high demand. Special operation in Ukraine could be completed in the foreseeable future, given aims are being achieved and work is being carried out by peace negotiators and the military. EU ready to release EUR 500mln for arms to Ukraine, according to AFP citing EU chief. Russia says it has destroyed a training centre for foreign mercenaries within Ukraine, was located north of Odesa, via Tass. Japan's Industry Ministry plans to reduce Russian coal imports gradually while looking for alternative suppliers, according to Reuters. Ukraine PM says they have large stocks of grain, cereals and vegetable oil. Are able to provide themselves with food; this year's harvest will be 20% less YY. Ukraine gas grid warns that Russian actions could impact gas flows to Europe, via Reuters. On Thursday, St Louis Fed president James Bullard said he prefers boosting the policy rate to 3%-3.25% in the second half of 2022. Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral while monitoring the economy’s performance. The steepening in the Treasury yield curve contrasts with the flattening and inversions that have vexed markets this year. The two-year rate topped the 10-year last week for the first time since 2019, a possible warning of recession. “We’re seeing a tactical re-steepening right now but the curve is going to continue to flatten,” Kelsey Berro, fixed income portfolio manager at JPMorgan Asset Management, said on Bloomberg Television. “That’s because the Fed has told us, we’d like to get to neutral expeditiously. On top of that, they may need to tighten beyond neutral. Front-end yields can still go higher.” In Europe, Euro Stoxx 50 rallies over 1.8% before stalling while the Stoxx 600 index climbed 1.2% but drifted off best levels as investors took advantage of beaten-down stock valuations with energy, banks and autos the strongest-performing sectors. Banks outperformed as Banco BPM SpA surged after Credit Agricole SA bought a 9.2% stake in the Italian lender. An Asia-Pacific share index eked out a small increase.  Here are some of the biggest European movers today: Scout24 shares rise as much as 17%, the most intraday since December 2018, after a report that Hellman & Friedman, EQT and Permira have discussed taking the firm private. Banco BPM shares rise as much as 17% after Credit Agricole bought a 9.2% stake in the Italian lender, with Bank of America saying the deal is a reminder that real value should be based on fundamentals. Sodexo shares jump as much as 7.4%, their biggest single-day gain in a month, after RBC Capital Markets upgrades the French caterer to outperform from sector perform. K+S gains as much as 10% after JPMorgan double-upgraded the shares to overweight from underweight, seeing a very positive environment for fertilizers amid supply disruptions and high energy prices. Atlantia shares rise as much as 4.5% following a report in a Italian newspaper that the Benetton family and Blackstone may start their takeover offer for Atlantia at more than EU22 per share. Saab rise as much as 5% as SEB upgrades the shares to buy from hold on the Swedish defense firm’s sales potential in the coming decade in the wake of Russia’s invasion of Ukraine. Moncler shares rise as much as 4.2% after Barclays upgrades the Italian luxury company to overweight, citing an “attractive” defensive profile in the current environment. Genmab fall as much as 10%, the most since September 2020, after saying a tribunal decided in favor of Janssen Biotech over two issues surrounding the cancer drug daratumumab (Darzalex). Ahead of this weekend's French election, Macron's lead is shrinking: the current President led his rivals in the April 10 election with 26.2% support, down from 27.2% a day earlier, according to a polling average calculated by Bloomberg on April 8. Macron was 3.5 percentage points ahead of second-placed Marine Le Pen, down from 4.1 points. Asian stocks edged higher on Friday, poised to snap three days of declines as traders assessed the prospect of policy easing by Beijing.  The MSCI Asia Pacific Index erased early losses of as much as 0.4% to climb 0.2%. Chinese property and infrastructure-related stocks surged on hopes for fiscal as well as monetary easing as the government seeks to prop up growth.   For the week, the Asian benchmark was down 2% as investors turned cautious on risk assets after latest comments from the Federal Reserve suggested aggressive tightening lies ahead. Tech shares were hit hard in particular, with the MSCI Asia-Pacific Information Technology Index losing 4% this week, on track for its worst performance since end-January. “There appears to be speculation that monetary easing by the PBOC might be imminent,” said Kazutaka Kubo, senior economist at Okasan Securities. There are also expectations that once lockdowns are over, the economy could be supported by pent-up demand, he added.  Chinese authorities have repeatedly vowed to support the economy and markets in thet past few weeks, as rising Covid-19 infections and lockdowns darken the outlook for growth. The pledges have spurred bets that some form of monetary easing may come soon.  Movements in most national benchmarks in the region were modest on Friday, gaining less than 1%. Stocks in the Philippines and Indonesia outperformed, while Singapore shares fell.  Indian stocks gained after the Reserve Bank of India kept borrowing costs at a record low, while India’s 10-year bond yield hit 7% - the highest since 2019 - as the nation’s central bank boosted an inflation forecast. The central bank also announced the start of policy normalization as the pandemic’s impact fades. The S&P BSE Sensex climbed 0.7% to 59,447.18 in Mumbai to complete a second week of gains, while the NSE Nifty 50 Index rose 0.8%. Gauges of small- and mid-sized companies gained 1% and 0.9%, respectively. The Reserve Bank of India’s monetary policy panel held the benchmark rate at 4%, in line with predictions of all 36 economists surveyed by Bloomberg. RBI Governor Shaktikanta Das said the central bank will start focusing on withdrawal of banking liquidity accommodation to target inflation but such a move would be “multi-year” and carried out without disrupting the markets. “Equity markets will like the RBI’s continued focus on growth and its commitment to an accommodative stance,” said Abhay Agarwal, a fund manager at Mumbai-based Piper Serica Advisors Pvt.  The RBI’s commentary means adequate flow of liquidity will continue and immediate beneficiaries will be consumers who are borrowing to purchase real estate and autos, he added. All but one of 19 sectoral sub-indexes compiled by BSE Ltd. advanced, led by a gauge of power companies. Reliance Industries Ltd. was a key gainer on the Sensex, which saw 22 of its 30 components advance. The RBI has comforted markets by refraining from being aggressive, unlike its global peers, and by ensuring that the liquidity withdrawal will be gradual, Yesha Shah, head of equity research at Samco Securities wrote in a note.  “On the growth front, one can assume that the central bank expects private investment to ramp up now that capacity utilization has improved further,” she said, adding the policy lays the framework for a possible rate increase in coming reviews. Australian stocks advanced - the S&P/ASX 200 index rose 0.5% to close at 7,478.00 - supported by materials and industrial stocks. GrainCorp shares surged to a record high, after the firm upgraded its FY22 earnings guidance as high levels of rain in Australia lay a path for a bumper crop.  Platinum Asset plunged to an all-time low after the company reported net outflows of A$222 million in March. In New Zealand, the S&P/NZX 50 index was little changed at 12,066.27. In rates, Treasuries fell across the curve, with the front-end of the Treasuries curve pressured lower, flattening 2s10s spread by ~5bp as 2-year yields trade more than 7bp cheaper on the day at ~2.54%. S&P 500 futures near top of Thursday’s range, following bigger advance for European stocks after three straight declines. Yields across long-end of the curve are little changed on the day, as flattening extends out to 5s30s spread which is tighter by ~4bp; 10-year yields around 2.683%, cheaper by 2.5bp vs Thursday close; bunds and gilts outperform by 1bp-2bp in the sector. Bunds reversed opening gains, adding to a three-day run of declines; French debt underperformed bunds ahead of presidential elections beginning Sunday. The German curve bull-flattens, richening 2bps across the back end. Peripheral spreads widen to core with Italy underperforming. In FX, Bloomberg dollar index advanced a seventh consecutive day and neared the strongest level since July 2020 as the greenback advanced against all of its Group-of-10 peers apart from the Norwegian krone. The euro pared losses after touching a one-month low against the dollar in early London trading. The pound fell to the lowest in more than three weeks as bets for aggressive policy tightening by the Federal Reserve boost the dollar. Gilts rose across the curve as U.S. Treasury yields stabilized following the recent selloff. The Australian and New Zealand dollars were the worst-performing G-10 currencies; Australia’s yield curve steepened following a similar move in Treasuries on Thursday. Most Japanese government bonds rose, thanks to support from the central bank’s regular purchase operations. The yen briefly reversed early an Asia session loss after an ex-BOJ official said there’s likelihood of a policy shift as soon as this summer. Bitcoin is contained and unable to derive traction either way from the broader risk tone. Strike payment platform launches Shopify (SHOP) integration, which allows merchants to accept Bitcoin (BTC), according to Bloomberg. In commodities, crude futures trade within Thursday’s range; WTI holds above $96, Brent stalls near $102. Spot gold holds steady near $1,930/oz. Most base metals trade well: LME zinc and lead outperforming, tin lags. To the day ahead now. Central bank speakers include the ECB’s de Cos, Centeno, Panetta, Stournaras, Makhlouf and Herodotou. Italian retail sales for February and Canadian employment for March round out this week’s data. Market Snapshot S&P 500 futures up 0.5% to 4,517.00 STOXX Europe 600 up 1.4% to 461.27 MXAP up 0.2% to 176.33 MXAPJ up 0.3% to 584.66 Nikkei up 0.4% to 26,985.80 Topix up 0.2% to 1,896.79 Hang Seng Index up 0.3% to 21,872.01 Shanghai Composite up 0.5% to 3,251.85 Sensex up 0.9% to 59,558.63 Australia S&P/ASX 200 up 0.5% to 7,477.99 Kospi up 0.2% to 2,700.39 Brent Futures up 1.2% to $101.76/bbl Gold spot down 0.0% to $1,931.38 U.S. Dollar Index up 0.14% to 99.89 German 10Y yield little changed at 0.68% Euro down 0.1% to $1.0865 Top Overnight News from Bloomberg The Bank of Russia delivered a surprise cut in its key interest rate Friday, reversing some of the steep increase it made after the invasion of Ukraine as the ruble recovered. The central bank lowered the rate to 17% from 20% and said further cuts could be made at upcoming meetings if conditions permit EU countries agreed to ban coal imports from Russia, the first time the bloc’s sanctions have targeted Moscow’s crucial energy revenues. Japan is also looking to curb imports, in what could be a shift in policy from one of the world’s largest energy buyers The EU is aiming to lock in progress on trade and technology disputes with the U.S. during President Joe Biden’s first term amid concerns that any gains could otherwise be easily reversed The relationship between Australia’s equities and currency has become the closest in a decade as commodity prices surge. The 180-day correlation between the country’s stock benchmark and the Australian dollar has climbed to the highest level since late 2011, according to data compiled by Bloomberg. The strengthened ties come as rallies in materials from oil to iron ore have boosted both the nation’s equities and the Aussie The ECB will look past threats to economic growth from the war in Ukraine, ending asset purchases in the summer and setting the stage for a first interest-rate increase in more than a decade in December, according to a survey of economists Junk bond sales across Europe are experiencing their longest drought in more than 10 years, as the Russian invasion of Ukraine and the prospect of rising interest rates neuter risk appetite A more detailed look at global markets courtesy of Newsquawk: Asia-Pacific stocks were choppy and eventually conformed to a mixed picture; some weakness was seen shortly after the Chinese cash open. ASX 200 bucked the trend and was propped up by its energy and gold names. Nikkei 225 was choppy and moved in tandem with action in USD/JPY whilst the KOSPI was weighed on by its chip and telecoms sectors. Hang Seng remained pressured by losses across its large constituents - Alibaba and JD.com. Shanghai Comp swung between gains and losses but overall remained supported by reports from China's Securities Journal which noted of a potential PBoC RRR in Q2. Top Asian News Hong Kong Tycoons Heed China, Endorse John Lee to lead City Chinese Tech Stocks Fall as Tencent Shuts Game Streaming Site Abu Dhabi’s IHC Invests $2 Billion in Billionaire Adani’s Empire ADDX Rolls Out Private Market Services for Wealth Managers European bourses are firmer across the board, Euro Stoxx 50 +1.5%, bouncing in a morning of quiet newsflow with the broader tone modestly risk-on. Albeit, benchmarks are still negative on the week and some way from earlier WTD peaks; unsurprisingly, sectors are all in the green with defensive-bias names lagging. Stateside, futures are similarly in the green, ES +0.2%, though magnitudes are more contained ahead of a limited US schedule to round off the week. Top European News U.S. Sanctions Russian Miner Producing 30% of World’s Diamonds Atlantia Gains After Reports of Offer Price Above EU22/Share Generali CEO Says He Won’t Change Plan Challenged by Investors Baader Downgrades Six Chemical Firms, Citing Ukraine War In FX: DXY touches 100.000 as US Treasury yields continue to soar and curve steepen, but unable to break barrier. Kiwi underperforms awaiting NZIER Q1 survey, while Aussie holds up better after hawkish warning in RBA FSR; NZD/USD around 0.6950, AUD/USD nearer 0.7460. Yen sub-124.00 as Japanese export supply is absorbed, Euro supported by bids circa 1.0850 and Sterling treading water above 1.3000. Rouble relatively resilient in the face of 300 bp CBR rate reduction as it remains above pre-conflict highs. Fixed income: Choppy trade in bonds approaching the end of another very bearish week. Bunds and Gilts nurse losses mostly above par around 157.00 and 120.00 handles vs fresh cycle lows of 156.40 and 119.83. US Treasuries most seeing red, but curve less steep in correction after hawkish FOMC minutes and Fed commentary, via Brainard and Bullard especially Central Banks: RBA Financial Stability Review: important that borrowers are prepared for an increase interest rates; global asset markets are vulnerable to larger-than-expected rate increases, via Reuters. RBI leave rates unchanged as expected, retains "accommodative" stance as expected; will focus on withdrawing accommodation going forward. RBI is to restore LAF corridor to 50bps and floor to be constituted by SDF, according to Reuters. CBRT April survey sees Turkish End-Year CPI at 46.44% (prev. 40.47%) CNB Minutes (March): Dedek and Michl voted in the minority for stable rates. Board assessed risks and uncertainties of winter forecast as being markedly inflationary, particularly in short-term CBR cuts its Key Rate to 17.00% (prev. 20.00%) as of April 11th; holds open the prospect of further key rate reduction at its upcoming meetings. In commodities, WTI and Brent are bolstered amid broader sentiment, though crude/geopolitical specific developments have been limited In-fitting with equities, the benchmarks are negative on the week and some way shy of best levels as such. New York will suspend the state gas tax from June 1st to December 31st, according to Reuters. Barclays raises oil forecasts by USD 7-8/bb assuming no material disruption in Russian supplies beyond Q2 2022, according to Reuters. Spot gold is marginally firmer, but, remains drawn to USD 1930/oz after marginally eclipsing the level overnight; base metals bid in-line with sentiment. US Event Calendar 10:00: Feb. Wholesale Trade Sales MoM, est. 0.8%, prior 4.0% 10:00: Feb. Wholesale Inventories MoM, est. 2.1%, prior 2.1% DB's Henry Allen concludes the overnight wrap Yesterday’s ECB minutes reinforced what we learned from the March FOMC minutes and soon-to-be Vice Chair Brainard earlier this week – there are no doves in fox holes – by casting doubt on the likelihood of inflation returning to target this year. We also heard from St. Louis Fed President Bullard, the hawk leading the charge, who called for a fed funds rates above 3% this year. That would beckon a faster pace of hikes along with more aggregate tightening. Regional Presidents Bostic and Evans, non-voters each, meanwhile, want to get rates to neutral. The tighter path of global policy continued to drive sovereign yields higher and equity indices lower. Market-implied ECB policy rates by the end of the year increased +6.0bps to +62.3bps, the highest level this cycle. Sovereign yields rose to multi-year highs of their own, with those on 10yr bund (+3.4bps), OATs (+4.4bps) and BTPs (+3.5bps) moving higher, with 10yr breakevens falling in Germany (-1.9bps) and France (-0.7bps) for the first time in five days, while Italian breakevens were essentially flat (+0.2bps). Meanwhile, fed funds futures by end-2022 staged a slight retreat, falling -1.2bps to 2.50%, albeit +10bps higher than a week ago. While the probability of a +50bp hike in May remained steady at 85.4%. 2yr yields fell in line, declining -1.2bps, while 10yr Treasuries gained +6.0bps, leaving the curve at +19.2bps. If you’re up on the yield curve discourse, you’ll know the Fed discounts the signal coming from 2s10s, instead preferring shorter-dated measures of the yield curve, which wound up flattening yesterday. Yesterday’s yield curve steepening should not be viewed in a vacuum. The 2s10s curve has taken a 58.3bp round trip over the last two weeks, falling from +23.1bps two weeks ago, to -8.0bps last Friday, to +19.2bps at yesterday’s close. The fundamental outlook hasn’t changed dramatically over that time span. Instead, this likely reflects the elevated rates volatility environment we currently sit in. This, all before QT has even begun. Real Treasury yields continue to march higher in the back end, with 10yr real yields gaining +5.3bps to -0.19%, their highest level since March 2020, having gained +25.1bps this week alone, and +91.3bps YTD. Despite higher rates and more restrictive language, the S&P 500 ended the day +0.43% higher, after losing -2.21% the previous two sessions. The S&P 500 is now -5.58% YTD following the massive repricing of Fed expectations, while the Bloomberg Financial Conditions index is just a hair tighter than the post-2010 average. Monetary policy may need to adjust tighter yet to engineer the demand slowdown commensurate with a return of inflation to target. European equities were modestly lower, with the STOXX 600 slipping -0.21% and the DAX down -0.52%. The CAC (-0.57%) underperformed the STOXX 600 for the seventh consecutive session, on the back of growing Presidential election jitters. Polls between President Macron and his closest rival, Marine Le Pen, tightened. In particular, one poll (caveat emptor) from Atlas actually put Le Pen marginally ahead of Macron in a head-to-head runoff for the first time, by 50.5%-49.5%. The news immediately saw the French 10yr spread over bund yields widen in response, ending the day at 54.2bps, its widest since March 2020. While one poll a race does not make, it’s worth noting the broader poll narrowing over the last month. That has seen Macron’s lead in the first round over Le Pen go from 30%-17% a month ago (according to Politico’s average), to just 27%-22% now. In the second round, polls are likewise pointing to a tight contest, with Macron ahead of Le Pen by 52-48% (Ifop) and 53%-47% (Ipsos). For those looking for more details on the presidential race, DB’s Marc de-Muizon put out a guide yesterday (link here), where he looks at the current state of play in the election, the main aspects of both Macron and Le Pen’s programmes, as well as some potential challenges for both candidates. Back to the US, in a rare show of bi-partisanship, the Senate voted 100-0 to discontinue normal trade relations with Russia and Belarus and to ban Russian oil imports. Brent crude prices fell below $100/bbl for the first time since mid-March intraday, ultimately falling -0.48% to close at $100.58/bbl. The EU also moved to include a Russian coal embargo in its fifth round of sanctions. The opprobrium was global, with the UN General Assembly voting to suspend Russia from the Human Rights Council following its human rights violations, the first such suspension since Libya in 2011. On the ground, the Kremlin admitted to enduring heavy troop losses, and while the locus of the war still seems set to shift eastward, Ukrainian commanders have their guard up for a renewed assault on Kyiv. Elsewhere, Judge Ketanji Brown Jackson was confirmed to the Supreme Court. It’s expected the Senate will now turn to approving President Biden’s nominations for the Fed Board of Governors later this month, which will still have one empty seat following Sarah Bloom Raskin withdrawing her nomination. Asian equity markets this morning aren’t matching Wall Street’s resilience from yesterday. The Hang Seng (-0.57%) is leading the moves lower with the Nikkei (-0.08%), Kospi (-0.10%), Shanghai Composite (-0.06%) and CSI (-0.10%) all slightly on the wrong foot. Along with tighter global monetary policy, China’s Covid outbreak is worsening and dragging on sentiment. US stock futures are unperturbed, with S&P 500 and Nasdaq futures virtually unchanged. Meanwhile, the aforementioned rates volatility continues to rear its head, with the curve snapping back flatter as we go to press, with 2yr Treasuries +4.2bps higher and the 10yr a bit softer at -0.5bps. Oil prices are extending their decline this morning with Brent futures (-0.74%) sliding below $100/bbl. On the data side, Japan’s current account swung back to surplus in February to +¥1.6 trillion, following a -¥1.2 trillion deficit in January - the second-biggest deficit on record. The main release yesterday came from the US weekly initial jobless claims, which fell to their lowest level since 1968, with just 166k initial claims in the week through April 2 (vs. 200k expected). In addition, the previous week was revised down to 171k from 202k, which left the smoother 4-week moving average at 170k, the lowest ever in the entire data series going back to 1967. Euro Area retail sales grew by +0.3% in February (vs. +0.5% expected), and German industrial production grew by +0.2% that same month, in line with expectations. To the day ahead now. Central bank speakers include the ECB’s de Cos, Centeno, Panetta, Stournaras, Makhlouf and Herodotou. Italian retail sales for February and Canadian employment for March round out this week’s data. Tyler Durden Fri, 04/08/2022 - 07:51.....»»

Category: blogSource: zerohedgeApr 8th, 2022