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The Zacks Analyst Blog Highlights: Nvidia, Walmart, Airbnb, Xilinx and STMicroelectronics
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For Immediate Release
Chicago, IL – February 15, 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: Nvidia (NVDA - Free Report) , Walmart (WMT - Free Report) , Airbnb (ABNB - Free Report) , Xilinx and STMicroelectronics (STM - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Bond-Market Scare: Global Week Ahead
In the Global Week Ahead, risk-free bond markets everywhere appear to be nearly fully pricing in an oversized (50 bps) U.S. rate hike in March 2022.
Is that bond trader fear going to ramp up, or abate?
Focus on Fed speakers, January’s FOMC minutes (they come out Wednesday) and on any advanced country monetary policymaker comments for a fresh take on bond/stock trader concern.
Europe and Japan bond markets should test their respective monetary policymakers' resolve to suppress rising sovereign bond rates. Watch for BoJ and ECB comments too.
As a parallel confirm — to all-important U.S. macro data — U.K. data can shed light on the Bank of England's (BoE) next move. The BoE has hiked twice recently.
In geopolitics/military affairs, shuttle diplomacy will seek to avert a war in Ukraine.
For the S&P 500, chipmaker Nvidia and retailer Walmart will be two bellwethers reporting earnings.
Next are Reuters’ five world market themes, reordered for equity traders.
(1) On Wednesday, FOMC Minutes from January as Treasury Rates Rise
After U.S. inflation posted its biggest annual increase in 40 years in January, markets are pricing in a strong chance the Fed will hike rates by half a percentage point in March.
Minutes from the Fed's January meeting, due on Wednesday, may already appear outdated. Nonetheless, edgy markets will scour them for signals on how big a move rate-setters are contemplating.
The Fed last month flagged a rate lift-off for March and also reaffirmed bond purchases will end then. The minutes may provide a sense of when, and how quickly, the Fed might reduce its balance sheet, which roughly doubled to nearly $9 trillion during the pandemic.
(2) Sovereign Bond Rate Rises in Europe
Just as the Bank of Japan (BOJ) steps in, the European Central Bank (ECB), it appears, may allow borrowing costs to rise as it focuses on inflation.
Southern European 10-year bond yield premiums over Germany are at the widest since mid-2020; Italy's spread is 20 bps wider from levels seen before the hawkish ECB pivot on Feb. 3.
Yes, the periphery is in a stronger position to cope, thanks to low debt refinancing costs and the EU recovery fund.
But a potentially faster-than-anticipated unwinding of the stimulus that has long buffered the periphery is a big deal, and the ECB 'put' could be put to the test.
The term, normally used to describe the Fed's backstop for stocks, refers to the ECB's willingness to tolerate rising yields that could tighten financing conditions and raise fragmentation risks. Markets are right to feel nervous.
(3) Macro Data from the U.K. Tuesday, Wednesday & Friday
It's a big data week in Britain with latest employment figures out Tuesday, inflation data on Wednesday and retail sales Friday.
They're in focus because the Bank of England just delivered back-to-back rate rises for the first time since 2004, trebled wage growth forecasts and predicted inflation to peak above 7%. Markets price another 130 basis points in hikes by year-end.
Data last month showed a 4.1% unemployment rate for the three months to November, the lowest since June 2020; new hirings surged by a record amount in December.
Consumer prices, meanwhile, accelerated in December to near 30-year highs of 5.4%, and may only peak in April when households face energy bill hikes of up to 50%.
While December shopping was hit by Omicron-linked curbs, latest retail sales may also show consumers’ mood being soured by inflation, lofty energy bills, higher rates and tax hikes.
(4) Stay on Top of Sovereign Bond Rate Rises in Japan, Too
If markets needed a reminder about who's in charge, the Bank of Japan was happy to comply, saying it would buy an unlimited amount of 10-year bonds at 0.25% and underscoring its resolve to prevent borrowing costs rising too high.
Japan's 10-year bond yield has hit a six-year peak every day for the past week, rising to 0.23%, just 2 bps off the BOJ's tolerance limit.
As the relentless rise in bond yields worldwide rippled out to Japan, some suspect the global trend towards monetary tightening could spur a shift at the dovish BOJ.
The bond market intervention shows that's some way off. Governor Huruhiko Kuroda continues to pledge extraordinary support for the economy, the latest reading of which is out Tuesday.
(5) Ukraine Situation Remains in Global Headlines
Shuttle diplomacy is at fever pitch to prevent tensions between Moscow and the West tipping over into a full-blown conflict around Ukraine.
After French President Emmanuel Macron's visit, German Chancellor Olaf Scholz will see Ukraine's President Volodymyr Zelenskiy on Monday, before heading to Moscow to meet Russia's Vladimir Putin. Poland's foreign minister is due in Moscow too, and NATO holds a defense ministers’ summit in Brussels Wednesday.
While Russian troop build-up near Ukraine’s border continues and Western powers send military to Europe's eastern fringes and ready sanctions on Moscow, markets seem to be focusing on other issues such as central banks and inflation.
The coming days may show whether the flurry of diplomacy improves international ties and keeps Russian energy flowing into Europe.
Top Zacks #1 Rank (STRONG BUY) Stocks
Are tech/growth stocks buys now?
If they are, here are three worth considering, according to our latest Zacks #1 Rank list.
(1) Airbnb: This is a $171 stock with a market cap of $109.2B now. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of F.
(2) Xilinx:This is a $217 stock with a market cap of $53.8B. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of C.
(3) STMicroelectronics: This is a $46 stock with a market cap of $41.6B. I see a Zacks Value score of D, a Zacks Growth score of B and a Zacks Momentum score of A.
Bulls see the Zacks #1 Rank and Zacks Growth scores of B.
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: Nvidia, Walmart, Airbnb, Xilinx and STMicroelectronics
For Immediate Release
Chicago, IL – February 15, 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: Nvidia (NVDA - Free Report) , Walmart (WMT - Free Report) , Airbnb (ABNB - Free Report) , Xilinx and STMicroelectronics (STM - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Bond-Market Scare: Global Week Ahead
In the Global Week Ahead, risk-free bond markets everywhere appear to be nearly fully pricing in an oversized (50 bps) U.S. rate hike in March 2022.
Is that bond trader fear going to ramp up, or abate?
Focus on Fed speakers, January’s FOMC minutes (they come out Wednesday) and on any advanced country monetary policymaker comments for a fresh take on bond/stock trader concern.
Europe and Japan bond markets should test their respective monetary policymakers' resolve to suppress rising sovereign bond rates. Watch for BoJ and ECB comments too.
As a parallel confirm — to all-important U.S. macro data — U.K. data can shed light on the Bank of England's (BoE) next move. The BoE has hiked twice recently.
In geopolitics/military affairs, shuttle diplomacy will seek to avert a war in Ukraine.
For the S&P 500, chipmaker Nvidia and retailer Walmart will be two bellwethers reporting earnings.
Next are Reuters’ five world market themes, reordered for equity traders.
(1) On Wednesday, FOMC Minutes from January as Treasury Rates Rise
After U.S. inflation posted its biggest annual increase in 40 years in January, markets are pricing in a strong chance the Fed will hike rates by half a percentage point in March.
Minutes from the Fed's January meeting, due on Wednesday, may already appear outdated. Nonetheless, edgy markets will scour them for signals on how big a move rate-setters are contemplating.
The Fed last month flagged a rate lift-off for March and also reaffirmed bond purchases will end then. The minutes may provide a sense of when, and how quickly, the Fed might reduce its balance sheet, which roughly doubled to nearly $9 trillion during the pandemic.
(2) Sovereign Bond Rate Rises in Europe
Just as the Bank of Japan (BOJ) steps in, the European Central Bank (ECB), it appears, may allow borrowing costs to rise as it focuses on inflation.
Southern European 10-year bond yield premiums over Germany are at the widest since mid-2020; Italy's spread is 20 bps wider from levels seen before the hawkish ECB pivot on Feb. 3.
Yes, the periphery is in a stronger position to cope, thanks to low debt refinancing costs and the EU recovery fund.
But a potentially faster-than-anticipated unwinding of the stimulus that has long buffered the periphery is a big deal, and the ECB 'put' could be put to the test.
The term, normally used to describe the Fed's backstop for stocks, refers to the ECB's willingness to tolerate rising yields that could tighten financing conditions and raise fragmentation risks. Markets are right to feel nervous.
(3) Macro Data from the U.K. Tuesday, Wednesday & Friday
It's a big data week in Britain with latest employment figures out Tuesday, inflation data on Wednesday and retail sales Friday.
They're in focus because the Bank of England just delivered back-to-back rate rises for the first time since 2004, trebled wage growth forecasts and predicted inflation to peak above 7%. Markets price another 130 basis points in hikes by year-end.
Data last month showed a 4.1% unemployment rate for the three months to November, the lowest since June 2020; new hirings surged by a record amount in December.
Consumer prices, meanwhile, accelerated in December to near 30-year highs of 5.4%, and may only peak in April when households face energy bill hikes of up to 50%.
While December shopping was hit by Omicron-linked curbs, latest retail sales may also show consumers’ mood being soured by inflation, lofty energy bills, higher rates and tax hikes.
(4) Stay on Top of Sovereign Bond Rate Rises in Japan, Too
If markets needed a reminder about who's in charge, the Bank of Japan was happy to comply, saying it would buy an unlimited amount of 10-year bonds at 0.25% and underscoring its resolve to prevent borrowing costs rising too high.
Japan's 10-year bond yield has hit a six-year peak every day for the past week, rising to 0.23%, just 2 bps off the BOJ's tolerance limit.
As the relentless rise in bond yields worldwide rippled out to Japan, some suspect the global trend towards monetary tightening could spur a shift at the dovish BOJ.
The bond market intervention shows that's some way off. Governor Huruhiko Kuroda continues to pledge extraordinary support for the economy, the latest reading of which is out Tuesday.
(5) Ukraine Situation Remains in Global Headlines
Shuttle diplomacy is at fever pitch to prevent tensions between Moscow and the West tipping over into a full-blown conflict around Ukraine.
After French President Emmanuel Macron's visit, German Chancellor Olaf Scholz will see Ukraine's President Volodymyr Zelenskiy on Monday, before heading to Moscow to meet Russia's Vladimir Putin. Poland's foreign minister is due in Moscow too, and NATO holds a defense ministers’ summit in Brussels Wednesday.
While Russian troop build-up near Ukraine’s border continues and Western powers send military to Europe's eastern fringes and ready sanctions on Moscow, markets seem to be focusing on other issues such as central banks and inflation.
The coming days may show whether the flurry of diplomacy improves international ties and keeps Russian energy flowing into Europe.
Top Zacks #1 Rank (STRONG BUY) Stocks
Are tech/growth stocks buys now?
If they are, here are three worth considering, according to our latest Zacks #1 Rank list.
(1) Airbnb: This is a $171 stock with a market cap of $109.2B now. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of F.
(2) Xilinx:This is a $217 stock with a market cap of $53.8B. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of C.
(3) STMicroelectronics: This is a $46 stock with a market cap of $41.6B. I see a Zacks Value score of D, a Zacks Growth score of B and a Zacks Momentum score of A.
Bulls see the Zacks #1 Rank and Zacks Growth scores of B.
Bears see the Zacks Value scores of D or F.
Choose your flavor.
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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.