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The Zacks Analyst Blog Highlights: Lay Z Boy, Winnebago, KB Home and Rite Aid
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For Immediate Release
Chicago, IL – June 23, 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 Lay Z Boy (LZB - Free Report) , Winnebago (WGO - Free Report) , KB Home (KBH - Free Report) and Rite Aid .
Here are highlights from Monday’s Analyst Blog:
How Is the U.S. Consumer? Global Week Ahead
While the Global Week Ahead is not the start of earnings season, there are major company reports worth learning from -- in this COVID-19 environment.
For me, the U.S. companies to watch for 2020 earnings and revenue growth catalysts are solid growth-ranked major companies, in a variety of consumer spaces.
Lay Z Boy AMC on Tuesday. The Zacks style scores are A for Value, A for Growth and A for Momentum. How are consumers handling furniture sales now?
Winnebago BMO on Wednesday. The Zacks style scores show a B for Value and an A for Growth. How are consumers handling mobile recreation home sales now?
KB Home AMC on Wednesday. I see Zacks style scores to like. There is a B for Value and a B for Growth. How are single family home builders seeing traffic now?
and
Rite Aid BMO on Thursday. I see a Zacks D for Value and a B for Growth. This is the 3rd largest retail drugstore in the USA.
Next are Reuters’ five world market themes, re-ordered for equity traders.
(1) Re-setting the Russell 2000 Small Cap Share Index Happens
After one of the most severe equity market selloffs in decades comes the June 26 “Russell Recon,” the once-a-year re-jig of FTSE Russell’s U.S. index range, tracked by over $9 trillion in assets.
Bank of America analysts predict big changes this year, with a greater skew towards mega-cap tech stocks. Those “moving up” may include names such as Zoom,Slackand Crowdstrike, which have risen in price amid the shift to remote working.
In healthcare, BofA sees the “biggest style shift” in the mid-cap index, forecasting their share to be reweighted to 23% from 17%.
As funds adjust portfolios for the new weightings and components, reshuffle day tends to bring huge trading volumes, especially towards the end of the session. Last June saw 1.279 billion shares representing $42.59 billion change hands in just 1.14 seconds, according to the Nasdaq index.
(2) Will Central Banks Be Able to Exit from Monetary Stimulus?
Economies are only just exiting stringent coronavirus lockdowns, but some policymakers are already hinting at another kind of exit — from their crisis-related stimulus.
Not all of them, however. The Fed has assured markets it won’t balk at further policy easing. But comments by the Bank of England, the People’s Bank of China and the Norges Bank have surprised some — the latter has even flagged plans to raise rates from 2022.
The BOE cited signs of economic recovery as a reason to slow the pace of its bond buying. And PBOC governor Yi Gang said policymakers should consider the “timely withdrawal of policy tools in advance” because of the potential for a “hangover.” The PBOC is seen not cutting rates for the second straight month.
Data showing UK public debt surpassing 100% of GBP will reinforce fears of a debt surge stemming from emergency blank cheques. Markets aren’t spooked yet, especially as the Fed remains in easing mode. But stay tuned for more exit strategy talk.
(3) Will Purchasing Manager Indexes (PMIs) Show a “V-Shaped” Recovery?
What shape will it be — the V of a swift rebound, or the U of an (eventual) grind higher, punctuated by coronavirus scares, news of job cuts, social unrest and corporate bankruptcies… or the depressing flatline of an L? Flash estimates of June business activity may give us some indication.
Signs are that despite new infections in China and some U.S. states, the worst is over for big economies. Chinese factory activity returned to growth in May, while most countries saw a bounce in retail sales and manufacturing. U.S. and European purchasing managers’ indexes (PMI) turned higher in May even if they remained in contraction territory.
June PMIs should reflect more positive momentum coming through as lockdowns eased further. Then again, recent market swings suggest there’s just one economic indicator in focus for investors these days, and that’s the coronavirus case count.
(4) We Hear from the People’s Bank of China (PBOC)
After tapping on the brakes, is the People’s Bank of China again feeling for the accelerator? The government has flagged a cut to banks’ reserve ratios, which would free up cash for loans. But anyone hoping for a full-throttle response should brace for disappointment.
The PBOC is seen holding interest rates steady in June for the second straight month. It is also draining money from the financial system, aiming to direct stimulus away from arbitrage plays and into the real economy.
Governor Yi Gang has also made clear that any measures are temporary and bring risks of a “hangover.” The easing path ahead seems to be narrow, not broad, and leading to credit rather than cash.
(5) Emerging Markets Central Banks Will Set Up This Week
Not much exit talk in other emerging markets where central banks are trying to reverse some of the economic devastation with swinging interest rate cuts.
Brazil, Russia and Ukraine have delivered big reductions so now the spotlight falls on Turkey, Egypt, Mexico, Philippines and Hungary. Hungary, Philippines and Egypt are likely to leave rates unchanged but may flag some easing for later in the year.
Turkey might be more of an assured bet for a cut on June 25. Its move in May was the ninth straight reduction in an easing cycle that began last July.
Expect a cut in Mexico too, given a 30% drop in April industrial production and below-target inflation. Rates fell to 5.5% last month and JPMorgan predicts an end-2020 rate of 3%.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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: Lay Z Boy, Winnebago, KB Home and Rite Aid
For Immediate Release
Chicago, IL – June 23, 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 Lay Z Boy (LZB - Free Report) , Winnebago (WGO - Free Report) , KB Home (KBH - Free Report) and Rite Aid .
Here are highlights from Monday’s Analyst Blog:
How Is the U.S. Consumer? Global Week Ahead
While the Global Week Ahead is not the start of earnings season, there are major company reports worth learning from -- in this COVID-19 environment.
For me, the U.S. companies to watch for 2020 earnings and revenue growth catalysts are solid growth-ranked major companies, in a variety of consumer spaces.
Lay Z Boy AMC on Tuesday. The Zacks style scores are A for Value, A for Growth and A for Momentum. How are consumers handling furniture sales now?
Winnebago BMO on Wednesday. The Zacks style scores show a B for Value and an A for Growth. How are consumers handling mobile recreation home sales now?
KB Home AMC on Wednesday. I see Zacks style scores to like. There is a B for Value and a B for Growth. How are single family home builders seeing traffic now?
and
Rite Aid BMO on Thursday. I see a Zacks D for Value and a B for Growth. This is the 3rd largest retail drugstore in the USA.
Next are Reuters’ five world market themes, re-ordered for equity traders.
(1) Re-setting the Russell 2000 Small Cap Share Index Happens
After one of the most severe equity market selloffs in decades comes the June 26 “Russell Recon,” the once-a-year re-jig of FTSE Russell’s U.S. index range, tracked by over $9 trillion in assets.
Bank of America analysts predict big changes this year, with a greater skew towards mega-cap tech stocks. Those “moving up” may include names such as Zoom,Slackand Crowdstrike, which have risen in price amid the shift to remote working.
In healthcare, BofA sees the “biggest style shift” in the mid-cap index, forecasting their share to be reweighted to 23% from 17%.
As funds adjust portfolios for the new weightings and components, reshuffle day tends to bring huge trading volumes, especially towards the end of the session. Last June saw 1.279 billion shares representing $42.59 billion change hands in just 1.14 seconds, according to the Nasdaq index.
(2) Will Central Banks Be Able to Exit from Monetary Stimulus?
Economies are only just exiting stringent coronavirus lockdowns, but some policymakers are already hinting at another kind of exit — from their crisis-related stimulus.
Not all of them, however. The Fed has assured markets it won’t balk at further policy easing. But comments by the Bank of England, the People’s Bank of China and the Norges Bank have surprised some — the latter has even flagged plans to raise rates from 2022.
The BOE cited signs of economic recovery as a reason to slow the pace of its bond buying. And PBOC governor Yi Gang said policymakers should consider the “timely withdrawal of policy tools in advance” because of the potential for a “hangover.” The PBOC is seen not cutting rates for the second straight month.
Data showing UK public debt surpassing 100% of GBP will reinforce fears of a debt surge stemming from emergency blank cheques. Markets aren’t spooked yet, especially as the Fed remains in easing mode. But stay tuned for more exit strategy talk.
(3) Will Purchasing Manager Indexes (PMIs) Show a “V-Shaped” Recovery?
What shape will it be — the V of a swift rebound, or the U of an (eventual) grind higher, punctuated by coronavirus scares, news of job cuts, social unrest and corporate bankruptcies… or the depressing flatline of an L? Flash estimates of June business activity may give us some indication.
Signs are that despite new infections in China and some U.S. states, the worst is over for big economies. Chinese factory activity returned to growth in May, while most countries saw a bounce in retail sales and manufacturing. U.S. and European purchasing managers’ indexes (PMI) turned higher in May even if they remained in contraction territory.
June PMIs should reflect more positive momentum coming through as lockdowns eased further. Then again, recent market swings suggest there’s just one economic indicator in focus for investors these days, and that’s the coronavirus case count.
(4) We Hear from the People’s Bank of China (PBOC)
After tapping on the brakes, is the People’s Bank of China again feeling for the accelerator? The government has flagged a cut to banks’ reserve ratios, which would free up cash for loans. But anyone hoping for a full-throttle response should brace for disappointment.
The PBOC is seen holding interest rates steady in June for the second straight month. It is also draining money from the financial system, aiming to direct stimulus away from arbitrage plays and into the real economy.
Governor Yi Gang has also made clear that any measures are temporary and bring risks of a “hangover.” The easing path ahead seems to be narrow, not broad, and leading to credit rather than cash.
(5) Emerging Markets Central Banks Will Set Up This Week
Not much exit talk in other emerging markets where central banks are trying to reverse some of the economic devastation with swinging interest rate cuts.
Brazil, Russia and Ukraine have delivered big reductions so now the spotlight falls on Turkey, Egypt, Mexico, Philippines and Hungary. Hungary, Philippines and Egypt are likely to leave rates unchanged but may flag some easing for later in the year.
Turkey might be more of an assured bet for a cut on June 25. Its move in May was the ninth straight reduction in an easing cycle that began last July.
Expect a cut in Mexico too, given a 30% drop in April industrial production and below-target inflation. Rates fell to 5.5% last month and JPMorgan predicts an end-2020 rate of 3%.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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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.