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The Zacks Analyst Blog Highlights Marathon Petroleum, Suncor Energy and Valero Energy
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For Immediate Release
Chicago, IL – June 14, 2022 – Zacks.com announces the list of stocks and 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: Marathon Petroleum (MPC - Free Report) , Suncor Energy (SU - Free Report) and Valero Energy (VLO - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Big Central Bank Week Global Week Ahead
The Global Week Ahead shows us a central-bank heavy calendar.
Want the easy keystone central bank meeting?
On Wednesday, the U.S. Fed certainly delivers its 2nd straight 50-basis-point (bps) rate hike, in order to bring broad U.S. consumer inflation under control.
A day later on Thursday, and then Friday, Britain and Sweden too will likely lift interest rates again, while Switzerland may be getting ready to join the rate-hike club.
In contrast, on Friday, the Bank of Japan should keep on with its ultra-dovish stance.
(1) On Wednesday, the FOMC Meeting Wraps
It's time to go big or go home in the battle to curb inflation.
So, Wednesday will likely see the Federal Reserve hike interest rates by another 50 basis points (bps), adding to the 75 bps of tightening already delivered since March.
How confident the Fed remains in quashing the highest inflation in decades without tipping the U.S. economy into a recession will be under scrutiny.
The jobs market is holding up well and retail sales data on Wednesday could show how consumers are doing as borrowing costs rise. Analysts expect a +0.2% monthly increase in Retail Sales for May. One big retailer is cutting its margin outlook.
Also watch the Fed's projections for rate moves in the so-called "dot plot."Unexpectedly aggressive rate-hike projections could pile pressure on U.S. Treasuries, with 10-year yields back above 3.0%.
(2) On Thursday, Bank of England (BoE) Trues Up Monetary Policy Stance
Near-10% inflation — the worst cost-of-living squeeze in decades, along with planned labor strikes — threaten a summer of discontent in Britain. The OECD predicts zero growth next year, the weakest performance for any G20 economy except Russia.
But on June 16th, the Bank of England will likely raise rates for the fifth time since December. GDP and jobs figures are also due on Monday and Tuesday. As a reminder, Q1 joblessness touched 48-year lows at 3.7%. But adjusted for inflation, pay was down 2% on year-earlier levels, the biggest fall since 2013.
Meanwhile, Prime Minister Boris Johnson, his authority shaken by a narrow vote of confidence by members of his own party, is forging on with "fiscal firepower" pledges, and plans to amend a Northern Ireland trade protocol. The former could exacerbate inflation; the latter will almost certainly stoke tensions with the European Union.
(3) On Thursday, Swiss National Bank (SNB) Reports Monetary Policy
Switzerland has caught the inflation bug, having seen prices rise in May by the most in nearly 14 years. It could mean the days of deeply negative rates are numbered.
The Swiss National Bank (SNB) may not make a change to its -0.75% interest rate — the world's lowest — at its Thursday meeting. But price pressures and the prospect of the ECB hiking rates in July are persuading some rate-setters to change their dovish stance.
Swiss Franc strength has dampened inflation somewhat, and the SNB has toned down franc selling. Still, it may join the rate-hike club soon, having watched such hitherto-dovish peers as Sweden's Riksbank make policy U-turns.
Having upped rates in April, the Riksbank may do so again on Friday, with some chance of a 50 basis point move.
(4) On Friday, Bank of Japan Follows, with Stubborn Dovishness
There's little doubt that the Bank of Japan will stick to its big stimulus guns on Friday, with Governor Haruhiko Kuroda in recent days repeatedly re-committing to ultra-easy monetary policy.
But pressure to change tack is growing. Being the G-10's lone dove means constantly pushing back against a global tide of rising yields. Japan's 10-year bond yield is regularly bumping against the BOJ's tolerance ceiling, 25 bps north of 0%.
Pinning it there is costly, and one casualty is the yen. Widening yield differentials have sent the currency to multi-decade lows.
Japan's imported energy has become expensive, crunching consumers and businesses at a sensitive time as crucial upper house elections loom this summer. Kuroda didn't help matters by suggesting households were becoming more tolerant of rising prices, forcing a rare apology.
(5) On Sunday, the French Vote in First-Round Parliamentary Elections
France votes on Sunday in first-round parliamentary elections that will determine whether newly re-elected President Emmanuel Macron will be able to implement his pro-business platform.
Much has changed since his 58% win against far-right candidate Marine Le Pen on April 24th, with opinion polls shifting from expectations for a majority for Macron's Ensemble (Together) alliance to the possibility of a hung parliament.
A unified Left opposition, which promises to lower the retirement age to 60 and cap prices on essential products, has gained momentum. Falling short of an absolute majority would be a big setback, forcing Macron to broaden his alliance or face the uncertainty tied to governing without a majority.
The broader the alliance, the more complicated deal-making — and dictating policy decisions — becomes. Some amount of political risk would kick in as investors reconsider the premium paid for French assets.
Top Zacks #1 Rank (STRONG BUY) Stocks
Oil & Gas sector stocks continue to dominate our #1 stock list.
With gas-at-the-pump prices sky high, this should be no surprise: Two U.S.-based refiners made my focus list.
Next are three large cap oil stocks, roughly the same size in market cap terms:
(1) Marathon Petroleum: This is a $108 a share stock, making for a $60.2B market cap. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of B. This is a Refiner and Marketer.
In October 2018, Marathon Oil completed the acquisition of its rival Andeavor in a $23.3 billion deal, thereby becoming the nationwide largest refining company by market capitalization. The deal also made the company the largest U.S. refiner and the fifth largest in the world by capacity.
(2) Suncor Energy: This is a $41 a share stock, making for a $59.1B market cap. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of B. This is a Canadian oil sands company.
Suncor is one of the largest owners of oil sands in the world. The company has gained new oil sands properties to supplement its existing operations in northern Alberta, making it the dominant producer in the region where reserves are second only to Saudi Arabia.
(3) Valero Energy: This is a $140 a share stock, making for a $58,5B market cap. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of A. This is a refiner and marketer.
It has a refining capacity of 3.1 million barrels per day across 15 refineries located throughout the United States, Canada and the United Kingdom.
Moreover, Valero is a leading ethanol producer with 14 ethanol plants in the Midwest that have a combined capacity of 1.73 billion gallons per year.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Marathon Petroleum, Suncor Energy and Valero Energy
For Immediate Release
Chicago, IL – June 14, 2022 – Zacks.com announces the list of stocks and 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: Marathon Petroleum (MPC - Free Report) , Suncor Energy (SU - Free Report) and Valero Energy (VLO - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Big Central Bank Week Global Week Ahead
The Global Week Ahead shows us a central-bank heavy calendar.
Want the easy keystone central bank meeting?
On Wednesday, the U.S. Fed certainly delivers its 2nd straight 50-basis-point (bps) rate hike, in order to bring broad U.S. consumer inflation under control.
A day later on Thursday, and then Friday, Britain and Sweden too will likely lift interest rates again, while Switzerland may be getting ready to join the rate-hike club.
In contrast, on Friday, the Bank of Japan should keep on with its ultra-dovish stance.
(1) On Wednesday, the FOMC Meeting Wraps
It's time to go big or go home in the battle to curb inflation.
So, Wednesday will likely see the Federal Reserve hike interest rates by another 50 basis points (bps), adding to the 75 bps of tightening already delivered since March.
How confident the Fed remains in quashing the highest inflation in decades without tipping the U.S. economy into a recession will be under scrutiny.
The jobs market is holding up well and retail sales data on Wednesday could show how consumers are doing as borrowing costs rise. Analysts expect a +0.2% monthly increase in Retail Sales for May. One big retailer is cutting its margin outlook.
Also watch the Fed's projections for rate moves in the so-called "dot plot."Unexpectedly aggressive rate-hike projections could pile pressure on U.S. Treasuries, with 10-year yields back above 3.0%.
(2) On Thursday, Bank of England (BoE) Trues Up Monetary Policy Stance
Near-10% inflation — the worst cost-of-living squeeze in decades, along with planned labor strikes — threaten a summer of discontent in Britain. The OECD predicts zero growth next year, the weakest performance for any G20 economy except Russia.
But on June 16th, the Bank of England will likely raise rates for the fifth time since December. GDP and jobs figures are also due on Monday and Tuesday. As a reminder, Q1 joblessness touched 48-year lows at 3.7%. But adjusted for inflation, pay was down 2% on year-earlier levels, the biggest fall since 2013.
Meanwhile, Prime Minister Boris Johnson, his authority shaken by a narrow vote of confidence by members of his own party, is forging on with "fiscal firepower" pledges, and plans to amend a Northern Ireland trade protocol. The former could exacerbate inflation; the latter will almost certainly stoke tensions with the European Union.
(3) On Thursday, Swiss National Bank (SNB) Reports Monetary Policy
Switzerland has caught the inflation bug, having seen prices rise in May by the most in nearly 14 years. It could mean the days of deeply negative rates are numbered.
The Swiss National Bank (SNB) may not make a change to its -0.75% interest rate — the world's lowest — at its Thursday meeting. But price pressures and the prospect of the ECB hiking rates in July are persuading some rate-setters to change their dovish stance.
Swiss Franc strength has dampened inflation somewhat, and the SNB has toned down franc selling. Still, it may join the rate-hike club soon, having watched such hitherto-dovish peers as Sweden's Riksbank make policy U-turns.
Having upped rates in April, the Riksbank may do so again on Friday, with some chance of a 50 basis point move.
(4) On Friday, Bank of Japan Follows, with Stubborn Dovishness
There's little doubt that the Bank of Japan will stick to its big stimulus guns on Friday, with Governor Haruhiko Kuroda in recent days repeatedly re-committing to ultra-easy monetary policy.
But pressure to change tack is growing. Being the G-10's lone dove means constantly pushing back against a global tide of rising yields. Japan's 10-year bond yield is regularly bumping against the BOJ's tolerance ceiling, 25 bps north of 0%.
Pinning it there is costly, and one casualty is the yen. Widening yield differentials have sent the currency to multi-decade lows.
Japan's imported energy has become expensive, crunching consumers and businesses at a sensitive time as crucial upper house elections loom this summer. Kuroda didn't help matters by suggesting households were becoming more tolerant of rising prices, forcing a rare apology.
(5) On Sunday, the French Vote in First-Round Parliamentary Elections
France votes on Sunday in first-round parliamentary elections that will determine whether newly re-elected President Emmanuel Macron will be able to implement his pro-business platform.
Much has changed since his 58% win against far-right candidate Marine Le Pen on April 24th, with opinion polls shifting from expectations for a majority for Macron's Ensemble (Together) alliance to the possibility of a hung parliament.
A unified Left opposition, which promises to lower the retirement age to 60 and cap prices on essential products, has gained momentum. Falling short of an absolute majority would be a big setback, forcing Macron to broaden his alliance or face the uncertainty tied to governing without a majority.
The broader the alliance, the more complicated deal-making — and dictating policy decisions — becomes. Some amount of political risk would kick in as investors reconsider the premium paid for French assets.
Top Zacks #1 Rank (STRONG BUY) Stocks
Oil & Gas sector stocks continue to dominate our #1 stock list.
With gas-at-the-pump prices sky high, this should be no surprise: Two U.S.-based refiners made my focus list.
Next are three large cap oil stocks, roughly the same size in market cap terms:
(1) Marathon Petroleum: This is a $108 a share stock, making for a $60.2B market cap. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of B. This is a Refiner and Marketer.
In October 2018, Marathon Oil completed the acquisition of its rival Andeavor in a $23.3 billion deal, thereby becoming the nationwide largest refining company by market capitalization. The deal also made the company the largest U.S. refiner and the fifth largest in the world by capacity.
(2) Suncor Energy: This is a $41 a share stock, making for a $59.1B market cap. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of B. This is a Canadian oil sands company.
Suncor is one of the largest owners of oil sands in the world. The company has gained new oil sands properties to supplement its existing operations in northern Alberta, making it the dominant producer in the region where reserves are second only to Saudi Arabia.
(3) Valero Energy: This is a $140 a share stock, making for a $58,5B market cap. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of A. This is a refiner and marketer.
It has a refining capacity of 3.1 million barrels per day across 15 refineries located throughout the United States, Canada and the United Kingdom.
Moreover, Valero is a leading ethanol producer with 14 ethanol plants in the Midwest that have a combined capacity of 1.73 billion gallons per year.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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/performance for information about the performance numbers displayed in this press release.