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The Zacks Analyst Blog Highlights: Alphabet, Facebook, Microsoft, Amazon and Apple
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For Immediate Release
Chicago, IL – April 28, 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: Alphabet (GOOGL - Free Report) , Facebook , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Apple (AAPL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Big Tech Calls the Tune: Global Week Ahead
In the Global Week Ahead, the S&P 500 earnings season hits a high note.
What keys get struck the hardest? Q1 earnings reports due from five tech mega-caps.
Alphabet reports after the market close (AMC) on Tuesday, April 28th
Facebook and Microsoft report AMC on Wednesday, April 29th
Amazon and Apple report AMC on Thursday, April 30th.
The five powerhouses benefited in singular ways from the “work at home” trade theme.
However, the analyst community has prepped us for a brutal tech earning season overall. A usually strong Info Tech growth sector barely outperforms the broad S&P 500, inside a deflated Q1 coronavirus context.
As of April 24th, I see a +0.8% y/y Info Tech sector earnings growth rate for Q1, along with +3.0% revenue growth The broad S&P 500 earnings decline is -15.8%. Revenue growth is +0.1% y/y
Tying it up for all large-cap U.S. stocks, traders get a maximum week of 160 S&P 500 companies reporting earnings.
Monday has 12. I would pay attention to: NOV, NVR, PKG and UHS
Tuesday has 40. I would pay attention to: AKAM, AMD, CAT, F, GLW, GOOGL and HOG
Wednesday has 37. I would pay attention to: ADP, BA, CME, FB, GE, MSFT, QCOM and URI
Thursday has 54. I would pay attention to: AAL, AAPL, AMZN, AMGN, GILD, HP, MCD, PRGO, TWTR, V and WDC
Friday has 17. I would pay attention to: ABBV, BRK.B, JCI and XOM
Next are Reuters’ five world market themes. I ranked them for equities, as usual. Interestingly, their lowest ranks were my highest this time around.
(1) Oil markets likely to make it a Bear or Bull week
Surely oil markets can’t have another week like the one just gone. Sub-zero WTI and Brent prices swinging 25% a day is not good for anybody’s stress levels, but might there be a silver lining?
It could offer a springboard for recovery when coronavirus lockdowns finally end. Cheap oil lowers energy, transport and manufacturing costs, puts money in consumers’ pockets and saves oil-importing countries cash, too, which can then be spent on more useful things.
So next week’s test will be whether markets can settle a bit. The price gyrations and the fact oil storage facilities are nearly full have spooked traders and caused many to pull back temporarily.
The volume of futures contracts still open for delivery in June has fallen by the equivalent of 217 million barrels, more than a third, since Monday. In fact, the number of open contracts is falling across the next four months — decreasing open interest for June is not being fully offset by increased interest in the July, August and September contracts.
(2) Is China able to lead a global recovery with its own banking issues?
China’s top banks are set to show the scars of a historical contraction in the world’s second-largest economy in coming days when reporting quarterly results. The signals are pointing towards tough times lenders face in the coming quarters: loan defaults, repayment delays and bad loans all rose in the first quarter as the new coronavirus outbreak triggered unprecedented economic challenges.
And the pace of accumulation of soured debt is expected to continue. The banking sector’s non-performing loan (NPL) ratio climbed in the first quarter to 2.04% — highest since the global financial crisis. Brokerage firm Jefferies expects a 2.3%-5.6% net NPL formation ratio in 2020-2021 for its covered banks.
That might not spell major trouble for the well-capitalized big-four banks, but the focus will shift on the hit to the large number of systematically important provincial banks already reeling from thin capital buffers and fast running out of options to replenish balance sheets.
China this week decided to lower the bad loan provision requirement for these provincial banks temporarily to free up capital for lending to struggling smaller and medium enterprises, but that may end up creating more challenges in the medium to long term.
(3) Central banks weigh in
The Bank of Japan is kicking off a hefty central banking week on Monday. Analysts expect that the coronavirus may offer policy makers in Tokyo a justification to scrap what has become an obsolete, largely symbolic bond-buying target as it takes stronger action to cushion the economic blow from the pandemic.
Though they also predict that the BOJ will move closer to debt monetization, or direct underwriting of government debt, as Japan joins other countries in deploying unprecedented spending to combat the widening fallout of the health crisis.
Meanwhile, on Wednesday, the focus will shift to the U.S. Federal Reserve’s monetary policy meeting. In recent months, the Fed has slashed rates to near zero, restarted bond purchases and rolled out an unprecedented range of programs to keep credit flowing and shore up business and household confidence, bulging its balance sheet to a record $6.42 trillion.
While the meeting is expected to be less dramatic than the emergency one in March, investors expect to get more details on the Fed’s special lending programs, its asset-purchase program and the forward guidance on the target range for the federal funds rate, analysts said.
(4) What will ultimately be size of the European Central Bank (ECB) asset-buying plan?
The European Central Bank is set to spend just over a trillion euros on asset purchases this year alone, has eased its rules on what it can buy and when, and has stepped up supportive measures for banks to prevent the coronavirus crisis from hammering the economy.
But is it enough? That’s the question ECB President Christine Lagarde is sure to face after Thursday’s central bank meeting in the news conference to be held via a conference call.
Analysts estimate that at the current daily pace, the ECB’s 750 billion euros of emergency bond purchases will be exhausted by October. Some say the ECB will be left with no option but to top up its scheme by a further 500 billion euros soon — perhaps as early as Thursday.
For sure, rising government borrowing costs in the periphery led by Italy means pressure to act is building once again — not least as European governments struggle to agree details of their own emergency stimulus plan.
(5) Europe’s top banks report Q1 earnings
Shareholders in European banks have had their share of nasty surprises since the coronavirus pandemic knocked global markets off record highs and quashed the value of the sector by over 45% in less than a month.
Lenders, which governments have ordered to freeze dividends and move to the front line of the worst economic crisis in living memory, have emerged as the unequivocal top stock market losers of the crash, faring even worse than travel and leisure stocks.
Now investors are bracing themselves to find out in the coming days just how many billions have European banks set aside for loan losses and the overall cost of the coronavirus crisis.
Over the past 30 days, analysts have revised their expectations for loan-loss provisions in 2020 by Europe’s most important banks upward by almost 130%, according to a Reuters analysis of Refinitiv data.
With the additional stress of the oil price crash in mind, investors are waiting for Deutsche Bank, Barclays, HSBC, UBS and Santander to unveil their impairment.
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/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Alphabet, Facebook, Microsoft, Amazon and Apple
For Immediate Release
Chicago, IL – April 28, 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: Alphabet (GOOGL - Free Report) , Facebook , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Apple (AAPL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Big Tech Calls the Tune: Global Week Ahead
In the Global Week Ahead, the S&P 500 earnings season hits a high note.
What keys get struck the hardest? Q1 earnings reports due from five tech mega-caps.
Alphabet reports after the market close (AMC) on Tuesday, April 28th
The five powerhouses benefited in singular ways from the “work at home” trade theme.
However, the analyst community has prepped us for a brutal tech earning season overall. A usually strong Info Tech growth sector barely outperforms the broad S&P 500, inside a deflated Q1 coronavirus context.
As of April 24th, I see a +0.8% y/y Info Tech sector earnings growth rate for Q1, along with +3.0% revenue growth
The broad S&P 500 earnings decline is -15.8%. Revenue growth is +0.1% y/y
Tying it up for all large-cap U.S. stocks, traders get a maximum week of 160 S&P 500 companies reporting earnings.
Next are Reuters’ five world market themes. I ranked them for equities, as usual. Interestingly, their lowest ranks were my highest this time around.
(1) Oil markets likely to make it a Bear or Bull week
Surely oil markets can’t have another week like the one just gone. Sub-zero WTI and Brent prices swinging 25% a day is not good for anybody’s stress levels, but might there be a silver lining?
It could offer a springboard for recovery when coronavirus lockdowns finally end. Cheap oil lowers energy, transport and manufacturing costs, puts money in consumers’ pockets and saves oil-importing countries cash, too, which can then be spent on more useful things.
So next week’s test will be whether markets can settle a bit. The price gyrations and the fact oil storage facilities are nearly full have spooked traders and caused many to pull back temporarily.
The volume of futures contracts still open for delivery in June has fallen by the equivalent of 217 million barrels, more than a third, since Monday. In fact, the number of open contracts is falling across the next four months — decreasing open interest for June is not being fully offset by increased interest in the July, August and September contracts.
(2) Is China able to lead a global recovery with its own banking issues?
China’s top banks are set to show the scars of a historical contraction in the world’s second-largest economy in coming days when reporting quarterly results. The signals are pointing towards tough times lenders face in the coming quarters: loan defaults, repayment delays and bad loans all rose in the first quarter as the new coronavirus outbreak triggered unprecedented economic challenges.
And the pace of accumulation of soured debt is expected to continue. The banking sector’s non-performing loan (NPL) ratio climbed in the first quarter to 2.04% — highest since the global financial crisis. Brokerage firm Jefferies expects a 2.3%-5.6% net NPL formation ratio in 2020-2021 for its covered banks.
That might not spell major trouble for the well-capitalized big-four banks, but the focus will shift on the hit to the large number of systematically important provincial banks already reeling from thin capital buffers and fast running out of options to replenish balance sheets.
China this week decided to lower the bad loan provision requirement for these provincial banks temporarily to free up capital for lending to struggling smaller and medium enterprises, but that may end up creating more challenges in the medium to long term.
(3) Central banks weigh in
The Bank of Japan is kicking off a hefty central banking week on Monday. Analysts expect that the coronavirus may offer policy makers in Tokyo a justification to scrap what has become an obsolete, largely symbolic bond-buying target as it takes stronger action to cushion the economic blow from the pandemic.
Though they also predict that the BOJ will move closer to debt monetization, or direct underwriting of government debt, as Japan joins other countries in deploying unprecedented spending to combat the widening fallout of the health crisis.
Meanwhile, on Wednesday, the focus will shift to the U.S. Federal Reserve’s monetary policy meeting. In recent months, the Fed has slashed rates to near zero, restarted bond purchases and rolled out an unprecedented range of programs to keep credit flowing and shore up business and household confidence, bulging its balance sheet to a record $6.42 trillion.
While the meeting is expected to be less dramatic than the emergency one in March, investors expect to get more details on the Fed’s special lending programs, its asset-purchase program and the forward guidance on the target range for the federal funds rate, analysts said.
(4) What will ultimately be size of the European Central Bank (ECB) asset-buying plan?
The European Central Bank is set to spend just over a trillion euros on asset purchases this year alone, has eased its rules on what it can buy and when, and has stepped up supportive measures for banks to prevent the coronavirus crisis from hammering the economy.
But is it enough? That’s the question ECB President Christine Lagarde is sure to face after Thursday’s central bank meeting in the news conference to be held via a conference call.
Analysts estimate that at the current daily pace, the ECB’s 750 billion euros of emergency bond purchases will be exhausted by October. Some say the ECB will be left with no option but to top up its scheme by a further 500 billion euros soon — perhaps as early as Thursday.
For sure, rising government borrowing costs in the periphery led by Italy means pressure to act is building once again — not least as European governments struggle to agree details of their own emergency stimulus plan.
(5) Europe’s top banks report Q1 earnings
Shareholders in European banks have had their share of nasty surprises since the coronavirus pandemic knocked global markets off record highs and quashed the value of the sector by over 45% in less than a month.
Lenders, which governments have ordered to freeze dividends and move to the front line of the worst economic crisis in living memory, have emerged as the unequivocal top stock market losers of the crash, faring even worse than travel and leisure stocks.
Now investors are bracing themselves to find out in the coming days just how many billions have European banks set aside for loan losses and the overall cost of the coronavirus crisis.
Over the past 30 days, analysts have revised their expectations for loan-loss provisions in 2020 by Europe’s most important banks upward by almost 130%, according to a Reuters analysis of Refinitiv data.
With the additional stress of the oil price crash in mind, investors are waiting for Deutsche Bank, Barclays, HSBC, UBS and Santander to unveil their impairment.
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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/performancefor information about the performance numbers displayed in this press release.