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The Zacks Analyst Blog Highlights: Target, General Motors and Williams-Sonoma
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For Immediate Release
Chicago, IL – September 15, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Target Corporation (TGT - Free Report) , General Motors Company (GM - Free Report) and Williams-Sonoma, Inc. (WSM - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Near-Zero Rates to 2023: Global Week Ahead
One big event looms in the Global Week Ahead:
The U.S. Federal Open Market Committee (FOMC) meets September 15th to 16th.
· - Just 39% of respondents to a Sept. 4th to 10th Reuters poll expect Fed officials to alter their guidance
· - Almost a third of respondents don’t predict a Fed rate change until 2021 or later
· - Respondents also saw the U.S. central bank’s updated quarterly projections showing interest rates near zero through 2023
Stock holders: You read that right.
Interest rates near zero through 2023.
There Is No Alternative (TINA) — for two or more years!
Next are Reuters' five world market themes, reordered for equity traders—
(1) The FOMC Publishes and Powell Speaks on Wednesday
The U.S. Federal Reserve meets for the first time since unveiling its landmark shift to a more tolerant stance on inflation.
That move steepened the U.S. Treasury curve, lifting longer-dated borrowing costs and expectations the Fed may have to increase purchases of long-dated bonds to tamp down yields.
The gap between 5- and 30-year U.S. Treasury yields has contracted since hitting three-month highs after Fed chief Jerome Powell flagged the shift on Aug. 27. But 30-year Treasury yields, sensitive to inflation expectations, remain elevated — not great news for the battered economy.
Fed purchases of more than $1.5 trillion of shorter-dated bonds during the pandemic have pinned down front-end borrowing costs. Investors will watch for a shift towards the long end.
(2) The Bank of England (BoE) and Bank of Japan (BoJ) Follow the Fed
The Fed move towards greater inflation tolerance, essentially a pledge to keep policy loose, puts other central banks in a bind. Unless they follow, the dollar’s weakening against their currencies could threaten economic recovery and their inflation targets.
The ECB says euro strength is not yet a concern. But it, along with British and Japanese peers, which meet in the coming days, may eventually be forced down the Fed’s looser-for-longer route.
No policy changes are expected in Japan and Britain. Still, the Bank of England may flag extending its bond-buying to help an economy reeling from COVID-19 and Brexit.
The Bank of Japan (BOJ), meanwhile, must contend with a new premier, likely Yoshihide Suga, who may not hesitate to pressure the central bank over yen strength. Calling for the BOJ to work with the government, Suga said recently he didn’t buy arguments such as negative rates hitting bank profits.
(3) Emerging Market Central Banks Make Moves
Emerging markets have been hot on the heels of advanced peers in cutting interest rates, but inflation pressures driven by weak currencies could force a pause.
Brazil is seen holding rates at 2% on Wednesday. Indonesia also should stand pat, given its debt monetization scheme has knocked the rupiah hard. The rouble’s tumble to four-year lows could induce Russia’s central bank to hold rates at 4.25% on Friday.
Yet South Africa may have little choice but to ease policy further on Thursday, after a data horror show that revealed a record 51% GDP plunge and a huge current account gap.
(4) COVID-19: Still Relevant
COVID-19 cases are rising again in Asian nations that appeared to have successfully controlled the outbreak. Indonesia’s capital, Jakarta, is back in lockdown and its markets have duly crumbled.
But Indonesia is only part of the story. Trade- and tourism-dependent stock markets in Thailand, the Philippines, Singapore and Indonesia have shed 18% to 24% this year and corporate earnings are seen sinking by a third. Australian shares are at 2 1/2-month lows, as Asian growth fears hurt commodities.
India, despite a four-month lockdown, has the world’s second-highest number of coronavirus cases. Not long ago the fastest-growing major economy, it will contract 14.8% this year, Goldman Sachs predicts.
(5) Brexit Troubling the U.K.
If it’s autumn with a year-end deadline and a sterling sell-off, it must be Brexit.
Britain’s internal market bill, a bombshell which the government readily admits contravenes international law, may wreck its EU divorce treaty, scupper chances of a post-Brexit trade agreement and trigger EU legal action.
Britain’s lower house of parliament starts debating the bill on Monday. While Prime Minister Boris Johnson has an 80-seat majority, internal party rumblings over the bill could well test his authority.
Meanwhile, sterling has lost 4% this month and at $1.28, it may not even be pricing the full risk. Clearer signals come from options markets, where positioning has turned markedly bearish.
Top Zacks #1 Rank (STRONG BUY) Stocks
(1) Target: This is a $147 retail stock with a market cap of $73.9B. I see a Zacks Value score of B, a Zacks Growth score of A, and a Zacks Momentum score of C.
(2) General Motors: Yes. This U.S. automaker is on our #1 list. I see a $30 share price and a $43.6B market cap. There is a Zacks Value score of A, a Zacks Growth score of F, and a Zacks Momentum score of D.
(3) Williams Sonoma: This is a $92 a share stock with a market cap of $7.1B. I see a Zacks Value score of B, a Zacks Growth score of B, and a Zacks Momentum score of A.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Target, General Motors and Williams-Sonoma
For Immediate Release
Chicago, IL – September 15, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Target Corporation (TGT - Free Report) , General Motors Company (GM - Free Report) and Williams-Sonoma, Inc. (WSM - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Near-Zero Rates to 2023: Global Week Ahead
One big event looms in the Global Week Ahead:
The U.S. Federal Open Market Committee (FOMC) meets September 15th to 16th.
· - Just 39% of respondents to a Sept. 4th to 10th Reuters poll expect Fed officials to alter their guidance
· - Almost a third of respondents don’t predict a Fed rate change until 2021 or later
· - Respondents also saw the U.S. central bank’s updated quarterly projections showing interest rates near zero through 2023
Stock holders: You read that right.
Interest rates near zero through 2023.
There Is No Alternative (TINA) — for two or more years!
Next are Reuters' five world market themes, reordered for equity traders—
(1) The FOMC Publishes and Powell Speaks on Wednesday
The U.S. Federal Reserve meets for the first time since unveiling its landmark shift to a more tolerant stance on inflation.
That move steepened the U.S. Treasury curve, lifting longer-dated borrowing costs and expectations the Fed may have to increase purchases of long-dated bonds to tamp down yields.
The gap between 5- and 30-year U.S. Treasury yields has contracted since hitting three-month highs after Fed chief Jerome Powell flagged the shift on Aug. 27. But 30-year Treasury yields, sensitive to inflation expectations, remain elevated — not great news for the battered economy.
Fed purchases of more than $1.5 trillion of shorter-dated bonds during the pandemic have pinned down front-end borrowing costs. Investors will watch for a shift towards the long end.
(2) The Bank of England (BoE) and Bank of Japan (BoJ) Follow the Fed
The Fed move towards greater inflation tolerance, essentially a pledge to keep policy loose, puts other central banks in a bind. Unless they follow, the dollar’s weakening against their currencies could threaten economic recovery and their inflation targets.
The ECB says euro strength is not yet a concern. But it, along with British and Japanese peers, which meet in the coming days, may eventually be forced down the Fed’s looser-for-longer route.
No policy changes are expected in Japan and Britain. Still, the Bank of England may flag extending its bond-buying to help an economy reeling from COVID-19 and Brexit.
The Bank of Japan (BOJ), meanwhile, must contend with a new premier, likely Yoshihide Suga, who may not hesitate to pressure the central bank over yen strength. Calling for the BOJ to work with the government, Suga said recently he didn’t buy arguments such as negative rates hitting bank profits.
(3) Emerging Market Central Banks Make Moves
Emerging markets have been hot on the heels of advanced peers in cutting interest rates, but inflation pressures driven by weak currencies could force a pause.
Brazil is seen holding rates at 2% on Wednesday. Indonesia also should stand pat, given its debt monetization scheme has knocked the rupiah hard. The rouble’s tumble to four-year lows could induce Russia’s central bank to hold rates at 4.25% on Friday.
Yet South Africa may have little choice but to ease policy further on Thursday, after a data horror show that revealed a record 51% GDP plunge and a huge current account gap.
(4) COVID-19: Still Relevant
COVID-19 cases are rising again in Asian nations that appeared to have successfully controlled the outbreak. Indonesia’s capital, Jakarta, is back in lockdown and its markets have duly crumbled.
But Indonesia is only part of the story. Trade- and tourism-dependent stock markets in Thailand, the Philippines, Singapore and Indonesia have shed 18% to 24% this year and corporate earnings are seen sinking by a third. Australian shares are at 2 1/2-month lows, as Asian growth fears hurt commodities.
India, despite a four-month lockdown, has the world’s second-highest number of coronavirus cases. Not long ago the fastest-growing major economy, it will contract 14.8% this year, Goldman Sachs predicts.
(5) Brexit Troubling the U.K.
If it’s autumn with a year-end deadline and a sterling sell-off, it must be Brexit.
Britain’s internal market bill, a bombshell which the government readily admits contravenes international law, may wreck its EU divorce treaty, scupper chances of a post-Brexit trade agreement and trigger EU legal action.
Britain’s lower house of parliament starts debating the bill on Monday. While Prime Minister Boris Johnson has an 80-seat majority, internal party rumblings over the bill could well test his authority.
Meanwhile, sterling has lost 4% this month and at $1.28, it may not even be pricing the full risk. Clearer signals come from options markets, where positioning has turned markedly bearish.
Top Zacks #1 Rank (STRONG BUY) Stocks
(1) Target: This is a $147 retail stock with a market cap of $73.9B. I see a Zacks Value score of B, a Zacks Growth score of A, and a Zacks Momentum score of C.
(2) General Motors: Yes. This U.S. automaker is on our #1 list. I see a $30 share price and a $43.6B market cap. There is a Zacks Value score of A, a Zacks Growth score of F, and a Zacks Momentum score of D.
(3) Williams Sonoma: This is a $92 a share stock with a market cap of $7.1B. I see a Zacks Value score of B, a Zacks Growth score of B, and a Zacks Momentum score of A.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.