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The Zacks Analyst Blog Highlights: JPMorgan, Citigroup and Wells Fargo, Home Depot, Lowe's and Autozone
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For Immediate Release
Chicago, IL – January 11, 2022 – 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: JPMorgan, Citigroup and Wells Fargo, Home Depot (HD - Free Report) , Lowe’s (LOW - Free Report) and Autozone (AZO - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Burst in the Geopolitical Landscape? Global Week Ahead
Before this Global Week Ahead begins, richly-valued growth stocks have already hit the brakes.
Rising U.S. Treasury yields -- sparked by growing speculation that the Fed will start hiking as early as March 2022 – have dampened growth stock enthusiasm.
As U.S. Q4-21 earnings season kicks off, traders also must reckon with an unexpected financial/geopolitical landscape, bursting sometime in 2022.
Unrest in Kazakhstan, along with a Russian military build-up on Ukraine’s border, and major Belarus unrest, has put NATO diplomacy back on most stock traders’ agendas.
On top of that, don’t forget about Mainland China. That country keeps its zero COVID strategy on with shutdowns -- ahead of the February 2022 Winter Olympics it is hosting.
Still, this market’s tone may improve — at any time.
We have had three years in a row of great U.S. stock returns. Risk markets are unlikely to give bullish sentiment up easily.
Here are Reuters’ five world market themes, reordered for equity traders--
(1) Time for Q4-21 Earnings Season
Massive profit increases from U.S. companies helped fuel last year's +27% gain in the S&P 500. As the earnings season kicks off in coming days, companies will likely have a difficult time posting similar numbers for the fourth quarter.
Earnings for S&P500 companies are expected to jump +22.3%, according to Refinitiv IBES — a robust increase, though a lower clip than in the first, second and third quarters.
Big Wall Street banks JPMorgan, Citigroup and Wells Fargo will be first in line to report. Investors are keen to hear about inflation, whether companies believe the supply chain bottlenecks that helped drive prices up last year will ease in coming months and forecasts for 2022.
S&P500 profit growth is expected to slow to +8.4% from +49.7% in 2021.
(2) How High Will Long-Term U.S. Treasury Rates Go?
The first week of trading in 2022 has been anything but dull for the world's biggest bond markets.
Short-dated Treasury yields shot up to highs not seen since early 2020, 10-year yields are up over 20 bps, Germany's -0.06% Bund yield is lurching closer to 0% and sovereign borrowing costs from Britain to Australia are at multi-month highs.
The message is clear: tighter monetary policy is likely sooner than anticipated, with the United States leading the way. Until data or central bank-speak contradicts this, 10-year Treasury yields could reach the 2% milestone soon.
Investors will also keep a close eye on real yields since a view that inflation-adjusted yields will remain low has fueled the risk asset rally.
The first week's 30 bps jump in U.S. real yields, may not make for a happy new year for some.
(3) Geopolitics: Will Kazakhstan’s Protests Create a Domino Effect Against Putin?
Deadly protests in Kazakhstan — the worst violence in its 30 years of independence — have added to the list of flare ups in the region being felt well beyond its borders.
Once again, Russia plays a key role. The Kremlin deploying troops is widely seen as a gamble to secure its interests in the oil and uranium-producing Central Asian nation.
Reverberations are felt throughout commodity markets and weighed on the rouble as Russia finds itself again in the limelight – tensions over Ukraine have loomed large over its markets.
The outcome of unrest in Kazakhstan is yet unclear.
But markets will have to sift through the fallout for geopolitical risk and diplomatic alignments for some time to come.
(4) Enjoy the Chinese New Year… Under Lockdown
For millions in China the new year began as the old ended – under lockdown COVID-19 cases are few, particularly of the Omicron variant, but restrictions are spreading fast as authorities keep a zero-tolerance policy before next month's Winter Olympics.
Xian is more than two weeks into a lockdown and harsh rules are rolling out across central China. All 400,000 residents of Yongji, in Shanxi Province, were ordered to remain indoors this week after the virus was detected on a railway turnstile.
The measures could render moot any further easing of zooming producer prices in December data due on Wednesday, especially if they trigger fresh supply-chain disruption around the world.
(5) Wild Moves in Bitcoin Prices
After a wild 2021, bitcoin's new year hangover has lingered into the first week of 2022 — and might get worse.
The computing power of its network dropped sharply this week as Kazakhstan's internet was shut down during its uprising, hitting its cryptocurrency mining industry — the second biggest in the world.
The drop in bitcoin "hashrate" might, in theory, hit its price. The more miners on the network, the greater the amount of computing power needed to mine new bitcoin. If miners drop off the network, it becomes easier for the remaining miners to produce new coins — boosting supply, in theory.
Bitcoin has fallen below $41,000 to its lowest since late September, with hawkish signs from the Fed adding to the malaise.
Some see it slipping further into the $30,000-range. Crypto investors will be searching for signs bitcoin can get off the ropes.
Top Zacks #1 Rank (STRONG BUY) Stocks
I noted 3 major U.S. consumer retail outfits on our #1 list. Let’s explore their metrics.
(1) Home Depot: This is an expensive $405 a share home goods retailer stock. I see a Zacks Value score of D, a Zacks Growth score of D and a Zacks Momentum score of F.
(2) Lowe’s:This is another expensive $257 a share home goods retailer stock. I see a Zacks Value score of D, a Zacks Growth score of C and a Zacks Momentum score of C.
(3) Autozone: This is a truly astounding $2,062 a share auto parts retailer stock. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of C.
Surprisingly, the long-term Zacks VGM scores on this limited set of #1 U.S. retail stocks look best on the highest priced Autozone.
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: JPMorgan, Citigroup and Wells Fargo, Home Depot, Lowe's and Autozone
For Immediate Release
Chicago, IL – January 11, 2022 – 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: JPMorgan, Citigroup and Wells Fargo, Home Depot (HD - Free Report) , Lowe’s (LOW - Free Report) and Autozone (AZO - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Burst in the Geopolitical Landscape? Global Week Ahead
Before this Global Week Ahead begins, richly-valued growth stocks have already hit the brakes.
Rising U.S. Treasury yields -- sparked by growing speculation that the Fed will start hiking as early as March 2022 – have dampened growth stock enthusiasm.
As U.S. Q4-21 earnings season kicks off, traders also must reckon with an unexpected financial/geopolitical landscape, bursting sometime in 2022.
Unrest in Kazakhstan, along with a Russian military build-up on Ukraine’s border, and major Belarus unrest, has put NATO diplomacy back on most stock traders’ agendas.
On top of that, don’t forget about Mainland China. That country keeps its zero COVID strategy on with shutdowns -- ahead of the February 2022 Winter Olympics it is hosting.
Still, this market’s tone may improve — at any time.
We have had three years in a row of great U.S. stock returns. Risk markets are unlikely to give bullish sentiment up easily.
Here are Reuters’ five world market themes, reordered for equity traders--
(1) Time for Q4-21 Earnings Season
Massive profit increases from U.S. companies helped fuel last year's +27% gain in the S&P 500. As the earnings season kicks off in coming days, companies will likely have a difficult time posting similar numbers for the fourth quarter.
Earnings for S&P500 companies are expected to jump +22.3%, according to Refinitiv IBES — a robust increase, though a lower clip than in the first, second and third quarters.
Big Wall Street banks JPMorgan, Citigroup and Wells Fargo will be first in line to report. Investors are keen to hear about inflation, whether companies believe the supply chain bottlenecks that helped drive prices up last year will ease in coming months and forecasts for 2022.
S&P500 profit growth is expected to slow to +8.4% from +49.7% in 2021.
(2) How High Will Long-Term U.S. Treasury Rates Go?
The first week of trading in 2022 has been anything but dull for the world's biggest bond markets.
Short-dated Treasury yields shot up to highs not seen since early 2020, 10-year yields are up over 20 bps, Germany's -0.06% Bund yield is lurching closer to 0% and sovereign borrowing costs from Britain to Australia are at multi-month highs.
The message is clear: tighter monetary policy is likely sooner than anticipated, with the United States leading the way. Until data or central bank-speak contradicts this, 10-year Treasury yields could reach the 2% milestone soon.
Investors will also keep a close eye on real yields since a view that inflation-adjusted yields will remain low has fueled the risk asset rally.
The first week's 30 bps jump in U.S. real yields, may not make for a happy new year for some.
(3) Geopolitics: Will Kazakhstan’s Protests Create a Domino Effect Against Putin?
Deadly protests in Kazakhstan — the worst violence in its 30 years of independence — have added to the list of flare ups in the region being felt well beyond its borders.
Once again, Russia plays a key role. The Kremlin deploying troops is widely seen as a gamble to secure its interests in the oil and uranium-producing Central Asian nation.
Reverberations are felt throughout commodity markets and weighed on the rouble as Russia finds itself again in the limelight – tensions over Ukraine have loomed large over its markets.
The outcome of unrest in Kazakhstan is yet unclear.
But markets will have to sift through the fallout for geopolitical risk and diplomatic alignments for some time to come.
(4) Enjoy the Chinese New Year… Under Lockdown
For millions in China the new year began as the old ended – under lockdown COVID-19 cases are few, particularly of the Omicron variant, but restrictions are spreading fast as authorities keep a zero-tolerance policy before next month's Winter Olympics.
Xian is more than two weeks into a lockdown and harsh rules are rolling out across central China. All 400,000 residents of Yongji, in Shanxi Province, were ordered to remain indoors this week after the virus was detected on a railway turnstile.
The measures could render moot any further easing of zooming producer prices in December data due on Wednesday, especially if they trigger fresh supply-chain disruption around the world.
(5) Wild Moves in Bitcoin Prices
After a wild 2021, bitcoin's new year hangover has lingered into the first week of 2022 — and might get worse.
The computing power of its network dropped sharply this week as Kazakhstan's internet was shut down during its uprising, hitting its cryptocurrency mining industry — the second biggest in the world.
The drop in bitcoin "hashrate" might, in theory, hit its price. The more miners on the network, the greater the amount of computing power needed to mine new bitcoin. If miners drop off the network, it becomes easier for the remaining miners to produce new coins — boosting supply, in theory.
Bitcoin has fallen below $41,000 to its lowest since late September, with hawkish signs from the Fed adding to the malaise.
Some see it slipping further into the $30,000-range. Crypto investors will be searching for signs bitcoin can get off the ropes.
Top Zacks #1 Rank (STRONG BUY) Stocks
I noted 3 major U.S. consumer retail outfits on our #1 list. Let’s explore their metrics.
(1) Home Depot: This is an expensive $405 a share home goods retailer stock. I see a Zacks Value score of D, a Zacks Growth score of D and a Zacks Momentum score of F.
(2) Lowe’s:This is another expensive $257 a share home goods retailer stock. I see a Zacks Value score of D, a Zacks Growth score of C and a Zacks Momentum score of C.
(3) Autozone: This is a truly astounding $2,062 a share auto parts retailer stock. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of C.
Surprisingly, the long-term Zacks VGM scores on this limited set of #1 U.S. retail stocks look best on the highest priced Autozone.
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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.