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The Zacks Analyst Blog Highlights: Ford, Dow and Corning Incorp
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For Immediate Release
Chicago, IL – November 3, 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: Ford Motor Company (F - Free Report) , Dow Inc. (DOW - Free Report) and Corning Incorporated (GLW - Free Report) .
Here are highlights from Monday’s Analyst Blog:
This Election: All Hat, No Cattle? Global Week Ahead
This Global Week Ahead has two parts.
The first part is the run-up to the U.S. Presidential election and its aftermath.
The second part has a Fed meeting, a non-farm payroll report and more Q3 earnings.
On that latter note, it has been a pretty positive Q3 earnings season, relative to depressed expectations. In fact, it is cause for some cheer.
Last Friday, Zacks Research Director Sheraz Mian put this Q3 earnings update together —
“We now have Q3 results from 320 S&P 500 members or 64% of the index’s total membership.
“Total earnings (or aggregate net income) for these 320 companies are down -7.2% from the same period last year on -4.3% lower revenues, with 86.6% beating EPS estimates and 77.8% beating revenue estimates.
“For the Tech sector, we now have Q3 results from 79.7% of the sector’s market capitalization in the S&P 500 index.
“Total earnings for these Tech companies are up +10.6% from the same period last year +5.8 higher revenues, with 95.3% beating EPS estimates and 90.7% beating revenue estimates.
“Looking at Q3 as a whole, total Tech sector earnings are expected to be up +8.8% from the same period last year on +6.7% higher revenues.”
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Tuesday Is Election Day!
Nov. 3rd is Election Day in the world’s biggest economy — a vote that’s particularly fraught due to the COVID-19 pandemic, the candidates’ differing policy platforms and the potential for a delayed or contested outcome.
No wonder volatility gauges are up.
President Donald Trump lags Democrat challenger Joe Biden in opinion polls, though neither is really feared by markets -- the former spells status quo, and the latter is expected to spend big to lift the economy.
The VIX “fear gauge” is near its highest since June, however, fueled by coronavirus worries and a focus on the immediate election aftermath — more specifically, Trump’s claims that mail-in ballots will cause fraud. Yet VIX futures imply market swings will ease in the post-election months.
What markets want is a clear result.
Then focus can shift to the winner’s strategy on the pandemic, stimulus and trade.
(2) Will the Chinese Yuan Move After the Election?
The yuan has become Asia’s favorite vehicle for playing the Trump-Biden contest, so much so that authorities have quietly intervened to stop it becoming a one-way bet on a Democrat win.
The yuan is up 7% since May and remains firm despite central bank efforts to make long positions expensive. A clear Biden win may well provide legs to the rally.
The thinking is Biden’s freer approach to world trade will sink the dollar, while Trump would lift it by maintaining pressure on China. But Biden’s lead is only one reason the yuan is on a tear — it’s also to do with China’s handling of the pandemic and its return to growth in a year when just about every other major economy will shrink.
(3) Watch Travel Industry Stocks…
It’s annus horribilis for Europe’s travel industry.
After dire figures from British Airways-owner IAG, Q3 earnings from Ryanair, Wizz Air, duty-free retailer Dufry and airport handler Fraport are unlikely to contain much good news.
Consumer discretionaries have fared better: an MSCI gauge has lost 10% this year, versus 57% for airlines. And after a strong beat for luxury giant LVMH, investors will hope for upbeat earnings from Hugo Boss, Luxotica and Richemont.
Focus is on how airlines are coping with cash-burn and to what extent consumers are cutting non-essential spending. But new lockdowns mean recovery is more elusive than ever. Citi for instance expects Dufry’s sales to recover to pre-pandemic levels only in 2023.
(4) Are You Worried About Less Central Bank Money-Printing? Read on.
Some worry about a slowdown in central bank stimulus just as lockdowns again curb activity.
European, Japanese and Canadian policymakers all opted recently to keep their powder dry. The U.S. Federal Reserve’s Nov. 4 meeting is expected to be uneventful, too.
But others may step up. The Reserve Bank of Australia is expected to expand bond-buying on Tuesday to target longer-maturity debt, lower the cap on short-dated yields and trim cash rates.
On Thursday, the Bank of England may expand QE by 100 billion pounds to support an economy ravaged by coronavirus and Brexit. It may also signal whether interest rates could fall below zero and if so, when.
(5) The Turkish Lira is in Trouble.
Turkey’s lira has sunk nearly 30% in October — its worst month since August 2018, hit by the usual toxic cocktail of geopolitics and unorthodox policy. Now it also looks vulnerable to U.S. sanctions over the purchase of Russian missiles, should Biden enter the White House.
Its economic data also offers little respite, with a huge trade deficit, a COVID-hit tourism sector, double-digit inflation and looming debt repayments.
After the central bank failed to raise interest rates in October, markets are wondering how low the lira needs to fall before policymakers are forced into a big emergency rate hike.
Top Zacks #1 Rank (STRONG BUY) Stocks
Let’s look into old school industrial U.S stocks. Three names popped up on our #1 list this week.
(1) Ford Motor: Wow! I didn’t expect to find this stock on our #1 list. At $8 a share, the market cap comes to $31.4B. I see a Zacks Value score of B, a Zacks Growth score of B, and a Zacks Momentum score of A.
(2) Dow: Another old school company. The big chemical firm here. I see a $46 a share stock makes for a $34.3B market cap. I see a Zacks Value score of D, a Zacks Growth score of B, and a Zacks Momentum score of A.
(3) Corning: One last old school stock. This one makes Communication Components. At $32 a share, that makes for a $24.5B market cap. I see a Zacks Value score of D, a Zacks Growth score of D, and a Zacks Momentum score of A.
It never hurts to look into stocks that are overlooked.
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: Ford, Dow and Corning Incorp
For Immediate Release
Chicago, IL – November 3, 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: Ford Motor Company (F - Free Report) , Dow Inc. (DOW - Free Report) and Corning Incorporated (GLW - Free Report) .
Here are highlights from Monday’s Analyst Blog:
This Election: All Hat, No Cattle? Global Week Ahead
This Global Week Ahead has two parts.
The first part is the run-up to the U.S. Presidential election and its aftermath.
The second part has a Fed meeting, a non-farm payroll report and more Q3 earnings.
On that latter note, it has been a pretty positive Q3 earnings season, relative to depressed expectations. In fact, it is cause for some cheer.
Last Friday, Zacks Research Director Sheraz Mian put this Q3 earnings update together —
“We now have Q3 results from 320 S&P 500 members or 64% of the index’s total membership.
“Total earnings (or aggregate net income) for these 320 companies are down -7.2% from the same period last year on -4.3% lower revenues, with 86.6% beating EPS estimates and 77.8% beating revenue estimates.
“For the Tech sector, we now have Q3 results from 79.7% of the sector’s market capitalization in the S&P 500 index.
“Total earnings for these Tech companies are up +10.6% from the same period last year +5.8 higher revenues, with 95.3% beating EPS estimates and 90.7% beating revenue estimates.
“Looking at Q3 as a whole, total Tech sector earnings are expected to be up +8.8% from the same period last year on +6.7% higher revenues.”
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Tuesday Is Election Day!
Nov. 3rd is Election Day in the world’s biggest economy — a vote that’s particularly fraught due to the COVID-19 pandemic, the candidates’ differing policy platforms and the potential for a delayed or contested outcome.
No wonder volatility gauges are up.
President Donald Trump lags Democrat challenger Joe Biden in opinion polls, though neither is really feared by markets -- the former spells status quo, and the latter is expected to spend big to lift the economy.
The VIX “fear gauge” is near its highest since June, however, fueled by coronavirus worries and a focus on the immediate election aftermath — more specifically, Trump’s claims that mail-in ballots will cause fraud. Yet VIX futures imply market swings will ease in the post-election months.
What markets want is a clear result.
Then focus can shift to the winner’s strategy on the pandemic, stimulus and trade.
(2) Will the Chinese Yuan Move After the Election?
The yuan has become Asia’s favorite vehicle for playing the Trump-Biden contest, so much so that authorities have quietly intervened to stop it becoming a one-way bet on a Democrat win.
The yuan is up 7% since May and remains firm despite central bank efforts to make long positions expensive. A clear Biden win may well provide legs to the rally.
The thinking is Biden’s freer approach to world trade will sink the dollar, while Trump would lift it by maintaining pressure on China. But Biden’s lead is only one reason the yuan is on a tear — it’s also to do with China’s handling of the pandemic and its return to growth in a year when just about every other major economy will shrink.
(3) Watch Travel Industry Stocks…
It’s annus horribilis for Europe’s travel industry.
After dire figures from British Airways-owner IAG, Q3 earnings from Ryanair, Wizz Air, duty-free retailer Dufry and airport handler Fraport are unlikely to contain much good news.
Consumer discretionaries have fared better: an MSCI gauge has lost 10% this year, versus 57% for airlines. And after a strong beat for luxury giant LVMH, investors will hope for upbeat earnings from Hugo Boss, Luxotica and Richemont.
Focus is on how airlines are coping with cash-burn and to what extent consumers are cutting non-essential spending. But new lockdowns mean recovery is more elusive than ever. Citi for instance expects Dufry’s sales to recover to pre-pandemic levels only in 2023.
(4) Are You Worried About Less Central Bank Money-Printing? Read on.
Some worry about a slowdown in central bank stimulus just as lockdowns again curb activity.
European, Japanese and Canadian policymakers all opted recently to keep their powder dry. The U.S. Federal Reserve’s Nov. 4 meeting is expected to be uneventful, too.
But others may step up. The Reserve Bank of Australia is expected to expand bond-buying on Tuesday to target longer-maturity debt, lower the cap on short-dated yields and trim cash rates.
On Thursday, the Bank of England may expand QE by 100 billion pounds to support an economy ravaged by coronavirus and Brexit. It may also signal whether interest rates could fall below zero and if so, when.
(5) The Turkish Lira is in Trouble.
Turkey’s lira has sunk nearly 30% in October — its worst month since August 2018, hit by the usual toxic cocktail of geopolitics and unorthodox policy. Now it also looks vulnerable to U.S. sanctions over the purchase of Russian missiles, should Biden enter the White House.
Its economic data also offers little respite, with a huge trade deficit, a COVID-hit tourism sector, double-digit inflation and looming debt repayments.
After the central bank failed to raise interest rates in October, markets are wondering how low the lira needs to fall before policymakers are forced into a big emergency rate hike.
Top Zacks #1 Rank (STRONG BUY) Stocks
Let’s look into old school industrial U.S stocks. Three names popped up on our #1 list this week.
(1) Ford Motor: Wow! I didn’t expect to find this stock on our #1 list. At $8 a share, the market cap comes to $31.4B. I see a Zacks Value score of B, a Zacks Growth score of B, and a Zacks Momentum score of A.
(2) Dow: Another old school company. The big chemical firm here. I see a $46 a share stock makes for a $34.3B market cap. I see a Zacks Value score of D, a Zacks Growth score of B, and a Zacks Momentum score of A.
(3) Corning: One last old school stock. This one makes Communication Components. At $32 a share, that makes for a $24.5B market cap. I see a Zacks Value score of D, a Zacks Growth score of D, and a Zacks Momentum score of A.
It never hurts to look into stocks that are overlooked.
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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.