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The Zacks Analyst Blog Highlights: Apple, Microsoft, Intuitive Surgical and AT&T
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For Immediate Release
Chicago, IL –July 31, 2018 – 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: Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Intuitive Surgical (ISRG - Free Report) and AT&T (T - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Apple Reports: Global Week Ahead
For the Global Week Ahead, I still think this: the latest U.S. quarterly earnings reports will dominate both fresh global macro reports and monetary policymaking, despite a big July U.S. non-farm payroll report out on Friday.
The FAANG stock Apple is the biggest earnings report I see looming this week.
There are loads of summertime monetary policy meetings all week long. Want the big sleeper catalyst in that mix? It should be the Bank of Japan (BoJ) monetary policy meeting. That happens on Tuesday.
To start, I reordered five market-moving events for equity investors. These were crafted from Reuters’ five big world market themes.
These are the ones most likely to dominate the thinking of investors and traders.
(1) Is the FAANG Trade Overcooked?
The spectacular dive by Facebook’s shares last week has unnerved those crowded into the tech sector.
The $120 billion rout was the biggest one-day wipeout in value terms in U.S. stock market history and having seen fellow-FAANG Netflix tumble, and Twitter slump on Friday, there have been some painful memories of the early 2000s dot.com bubble.
The final FAANG, Apple, reports this week and any disappointments in its numbers could cause more pain for U.S. and world stocks – as Wall Street has rallied 6 percent this year, its tech sub-set is up 16 percent.
Analysts at Bank of America Merrill Lynch, who keep a close eye on where investors are putting their money, are warning too that the FAANGs — Amazon and Google are the other two in the quintet — are the most overcrowded trade in the world and to get out.
(2) More U.S. and European Earnings Reports, Specifically CAT
Tech aside, Caterpillar, a company heavily geared to world growth, reports on Monday – its CEO notably said during Q1 results that those would likely be the highwater mark of the cycle so if that looks to be coming true markets will take notice.
In Europe, more than 70 companies on the pan-European STOXX 600 will report. It is a particularly big week for the region’s banks, which have underperformed the broader index with a 10 percent fall so far this year.
The big guns on the list include BNP Paribas, Intesa Sanpaolo, Lloyds, ING, Barclays, SocGen, RBS, Credit Agricole and Unicredit. With issues like stuttering Eurozone growth, a long-running struggle to keep up with U.S. rivals as well as bad loans and trouble in Turkey, there will be plenty to drill into.
(3) The Bank of Japan Meets on Tuesday
The Bank of Japan meets on Tuesday and might be doing some ‘jinarashi’ i.e. preparing markets for some changes to its unique, ultra-loose monetary policy.
Sources have told Reuters that having failed to raise Japan’s inflation to anywhere near its 2 percent target despite some intense effort, it is now considering changing its targets or its bond-buying program.
Five years of the qualitative and quantitative easing policy, which was last tweaked in 2016 to keep rates negative and cap the 10-year bond yield at zero, have had mixed results at best. Unemployment has dropped and the economy is no longer mired in deep deflation, but the yen hasn’t weakened enough to create noticeable inflation or ramp up economic growth.
And with a global trade war now threatening trouble for its big exporters and zero interest rates hurting its banks, the BOJ seems to have recognized that something needs to give.
(4) A Quiet Summer FOMC Meeting Happens, Non-farm Payroll Out Friday
It might be holiday season but U.S. markets won’t be taking much of a break this week.
Closely-scrutinized non-farm jobs data is due on Friday, two days before that the Federal Reserve will probably lay the groundwork for its third rate hike of the year in September.
The Fed’s mandate is to promote maximum employment along with price stability. The unemployment rate rose to 4.0 percent in June from 3.8 in May, when it matched the lowest since 2000. Analysts are expecting Friday’s figure for July to be 3.9 percent and for 190,000 jobs to have been added nationwide.
Given a severe labor shortage, is the economy up against maximum employment? And what does the Fed think about it all? Wednesday’s statement will get parsed, as always, for any worry about overheating in the economy or in inflation. Even tiny changes to its language can raise the temperature in markets.
(5) The Bank of England Follows Through and Raises Rates
The Bank of England’s Mark Carney is looking to throw off his “unreliable boyfriend” tag on Thursday and do what he and his colleagues have been threatening to do for a while -- raise UK interest rates by a quarter point to 0.75 percent.
It would be symbolic as it would get BoE rates above the emergency lows of the 2007-2008 global financial meltdown for the first time, but with a potentially messy Brexit nearing the bank may sound cautious about further moves. Market pricing doesn’t anticipate another hike for at least a year. That has been flattening the UK gilt bond curve and suppressing the pound, so unless Carney reverts to teasing about hikes again that is likely to continue.
Top Zacks #1 Rank (STRONG BUY) Stocks—
Microsoft: Yep. It’s on the #1 list this week. At $829B in market cap and with a Zacks Value ranking of F, you might want to stay away regardless.
Intuitive Surgical: While we are busy beating up FAANG momentum trading names, don’t forget this momo favorite. It is a cool $520 bucks a share now. The Zacks Value score is F and the Growth score is D.
Is it time to shoot the high-flying ISRG stock too? The only reason not to --and it is a good one-- is covering analysts upgraded earnings estimates, putting it on this #1 list.
Once that doesn’t happen, look out.
AT&T: We don’t often list a top large cap telco stock on this list. This $191B market cap stalwart may be worth a look. It garners a Value score of A. This is the stock to look at, particularly if you are a Value investor.
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Apple, Microsoft, Intuitive Surgical and AT&T
For Immediate Release
Chicago, IL –July 31, 2018 – 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: Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Intuitive Surgical (ISRG - Free Report) and AT&T (T - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Apple Reports: Global Week Ahead
For the Global Week Ahead, I still think this: the latest U.S. quarterly earnings reports will dominate both fresh global macro reports and monetary policymaking, despite a big July U.S. non-farm payroll report out on Friday.
The FAANG stock Apple is the biggest earnings report I see looming this week.
There are loads of summertime monetary policy meetings all week long. Want the big sleeper catalyst in that mix? It should be the Bank of Japan (BoJ) monetary policy meeting. That happens on Tuesday.
To start, I reordered five market-moving events for equity investors. These were crafted from Reuters’ five big world market themes.
These are the ones most likely to dominate the thinking of investors and traders.
(1) Is the FAANG Trade Overcooked?
The spectacular dive by Facebook’s shares last week has unnerved those crowded into the tech sector.
The $120 billion rout was the biggest one-day wipeout in value terms in U.S. stock market history and having seen fellow-FAANG Netflix tumble, and Twitter slump on Friday, there have been some painful memories of the early 2000s dot.com bubble.
The final FAANG, Apple, reports this week and any disappointments in its numbers could cause more pain for U.S. and world stocks – as Wall Street has rallied 6 percent this year, its tech sub-set is up 16 percent.
Analysts at Bank of America Merrill Lynch, who keep a close eye on where investors are putting their money, are warning too that the FAANGs — Amazon and Google are the other two in the quintet — are the most overcrowded trade in the world and to get out.
(2) More U.S. and European Earnings Reports, Specifically CAT
Tech aside, Caterpillar, a company heavily geared to world growth, reports on Monday – its CEO notably said during Q1 results that those would likely be the highwater mark of the cycle so if that looks to be coming true markets will take notice.
In Europe, more than 70 companies on the pan-European STOXX 600 will report. It is a particularly big week for the region’s banks, which have underperformed the broader index with a 10 percent fall so far this year.
The big guns on the list include BNP Paribas, Intesa Sanpaolo, Lloyds, ING, Barclays, SocGen, RBS, Credit Agricole and Unicredit. With issues like stuttering Eurozone growth, a long-running struggle to keep up with U.S. rivals as well as bad loans and trouble in Turkey, there will be plenty to drill into.
(3) The Bank of Japan Meets on Tuesday
The Bank of Japan meets on Tuesday and might be doing some ‘jinarashi’ i.e. preparing markets for some changes to its unique, ultra-loose monetary policy.
Sources have told Reuters that having failed to raise Japan’s inflation to anywhere near its 2 percent target despite some intense effort, it is now considering changing its targets or its bond-buying program.
Five years of the qualitative and quantitative easing policy, which was last tweaked in 2016 to keep rates negative and cap the 10-year bond yield at zero, have had mixed results at best. Unemployment has dropped and the economy is no longer mired in deep deflation, but the yen hasn’t weakened enough to create noticeable inflation or ramp up economic growth.
And with a global trade war now threatening trouble for its big exporters and zero interest rates hurting its banks, the BOJ seems to have recognized that something needs to give.
(4) A Quiet Summer FOMC Meeting Happens, Non-farm Payroll Out Friday
It might be holiday season but U.S. markets won’t be taking much of a break this week.
Closely-scrutinized non-farm jobs data is due on Friday, two days before that the Federal Reserve will probably lay the groundwork for its third rate hike of the year in September.
The Fed’s mandate is to promote maximum employment along with price stability. The unemployment rate rose to 4.0 percent in June from 3.8 in May, when it matched the lowest since 2000. Analysts are expecting Friday’s figure for July to be 3.9 percent and for 190,000 jobs to have been added nationwide.
Given a severe labor shortage, is the economy up against maximum employment? And what does the Fed think about it all? Wednesday’s statement will get parsed, as always, for any worry about overheating in the economy or in inflation. Even tiny changes to its language can raise the temperature in markets.
(5) The Bank of England Follows Through and Raises Rates
The Bank of England’s Mark Carney is looking to throw off his “unreliable boyfriend” tag on Thursday and do what he and his colleagues have been threatening to do for a while -- raise UK interest rates by a quarter point to 0.75 percent.
It would be symbolic as it would get BoE rates above the emergency lows of the 2007-2008 global financial meltdown for the first time, but with a potentially messy Brexit nearing the bank may sound cautious about further moves.
Market pricing doesn’t anticipate another hike for at least a year. That has been flattening the UK gilt bond curve and suppressing the pound, so unless Carney reverts to teasing about hikes again that is likely to continue.
Top Zacks #1 Rank (STRONG BUY) Stocks—
Microsoft: Yep. It’s on the #1 list this week. At $829B in market cap and with a Zacks Value ranking of F, you might want to stay away regardless.
Intuitive Surgical: While we are busy beating up FAANG momentum trading names, don’t forget this momo favorite. It is a cool $520 bucks a share now. The Zacks Value score is F and the Growth score is D.
Is it time to shoot the high-flying ISRG stock too? The only reason not to --and it is a good one-- is covering analysts upgraded earnings estimates, putting it on this #1 list.
Once that doesn’t happen, look out.
AT&T: We don’t often list a top large cap telco stock on this list. This $191B market cap stalwart may be worth a look. It garners a Value score of A. This is the stock to look at, particularly if you are a Value investor.
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.