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The Zacks Analyst Blog Highlights Taiwan Semi, Exxon Mobil and Tencent
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For Immediate Release
Chicago, IL – August 30, 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: Taiwan Semi (TSM - Free Report) , Exxon Mobil (XOM - Free Report) and Tencent (TCEHY - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Tricky Markets in September? Global Week Ahead
In the Global Week Ahead, the month of September begins. This is typically the weakest month for stocks.
Traders: Keep that thought firmly in mind.
In terms of macro data, the closely watched Federal monthly jobs report for August comes out on Friday in the United States.
Consumer Price Inflation (CPI) gauges in Europe will arrive on Wednesday.
This set of key macro data will hit while the Euro threatens to push decisively below the key $1 USD/Euro parity mark.
A look at manufacturing activity in Mainland China will also arrive on Wednesday.
Next are Reuters' five world market themes, reordered for equity traders—
(1) September is usually the cruelest month for stocks
The U.S. stock market's rebound has lost some steam, just as it is entering what has been on average its most treacherous month.
Since 1950, the benchmark S&P 500 has fallen an average of 0.5% in September, the worst monthly performance for the index and one of only two months to register an average decline, according to the Stock Trader's Almanac, which notes that fund managers tend to sell underperforming positions as the end of the third quarter nears.
This September, a number of factors could set investors on edge. Following the Jackson Hole central banking symposium in Wyoming, the Fed will hold its next policy meeting on Sept. 20-21. Ahead of that comes the latest reading on consumer prices that will indicate if inflation has peaked and is likely to cause volatility no matter where it lands.
(2) On Friday, we get the August USA nonfarm payroll report
Monthly U.S. jobs data on Sept. 2nd will test the argument that the world's biggest economy is in solid health, and indicate whether the Federal Reserve can engineer a "soft landing" even as it hikes interest rates to fight inflation that has been running at four-decade highs.
Those arguing against the prospect of a recession, despite two straight quarters of shrinking U.S. gross domestic product, have been able to point to the strong labor market, at least so far.
In July, nonfarm payrolls increased by +528K jobs, the largest gain since February. Early estimates for August are projecting an increase of +290K, according to Reuters data.
(3) On Wednesday, we get the flash CPI reading for the Eurozone
Inflation in the Euro area remains uncomfortably high, the flash August consumer price index on Wednesday is likely to show. That will only pile pressure on the European Central Bank (ECB) to hike rates again in September even as recession risks mount.
Instead of peaking soon, as hoped just a few weeks ago, inflation could soon hit double digits. It was at an annual rate of +8.9% in July — well above the ECB's 2% target.
The source of fresh inflation angst is clear: soaring gas prices, which lurched higher again as Russia signaled another squeeze on European gas supplies.
Gas prices are up +45% in August, and +300% this year. Where they go from here remains the key to when Eurozone inflation will finally peak. As one economist put it, we're all becoming gas watchers now.
(4) Also on Wednesday, we get China's latest manufacturing PMI
China's moribund economy may continue the lead from the U.S. and Europe in reporting manufacturing gloom in the coming week.
Official PMI data for this month is due on Wednesday, after a surprise contraction in July as COVID-19 flare-ups fueled by the Omicron variant of the virus forced further clampdowns under China's draconian zero-COVID policies. The Caixin private survey follows the next day, and is also at risk of dipping into contraction territory.
Consumer and business confidence continue to be hit by the ongoing property crisis. And now a searing heat wave is also hampering production.
China's authorities are trying to salvage growth this year, with the central bank cutting additional lending rates on Monday after slashing others the week before. On Thursday, the government announced it would take steps to strengthen the labor market, providing the stock market with a bit of cheer.
(5) The Euro may get below U.S. Dollar parity again
Once again in recent days, one euro became worth less than a U.S. dollar. The currency's tumble to new 20-year lows near $0.99 is emblematic of the scale of the challenges facing the bloc, not the least of which is an energy crisis hitting the Eurozone harder than elsewhere.
Another dramatic jump in natural gas prices ahead of peak winter demand in a region still dependent on Russian supplies is fanning inflation fears, as well as expectations the ECB will hike rates faster even as the economy slides towards recession.
Euro/dollar is increasingly correlated with gas prices, and investors and analysts predict further weakness as Russia continues curtailing its exports.
On a trade-weighted basis, the euro is falling fast too, and recently reached its lowest level since February 2020, when the start of the COVID-19 pandemic rattled world markets.
Top Zacks #1 Rank (STRONG BUY) Stocks
Two major Asia-Pacific tech stocks made it onto our #1 list.
(1) Taiwan Semi : This is a $86 a share semiconductor industry stock, with a market cap of $454.2B. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of F.
(2) Exxon Mobil : This is a $98 a share oil conglomerate stock, with a market cap of $413B. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of A.
(3) Tencent : This is a $42 a share Mainland China tech stock, with a market cap of $406.8B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of B.
Is it time to buy the big tech names in Taiwan and Mainland China?
Key Global Macro
Wednesday looks to be a key focus this week.
On Tuesday, Mexico's household unemployment rate may get to 3.5% from 3.3%.
US JOLTS jobs openings should show us 10.7 million spots remain available.
On Wednesday, the Euro area flash broad CPI should be +9.1% y/y (prior was +8.9%), while core should be +4.0% y/y.
The Eurozone household unemployment rate should be 6.7%, up from 6.6%.
China's Caixin manufacturing PMI should be 50.4.
The U.S. ADP payroll change should be +200K in August.
On Thursday, the S&P Euro area manufacturing PMI should be 49.7 (prior was 49.8).
On Friday, U.S. nonfarm payrolls should add +290K in August, average hourly earnings should be up +5.1% y/y (5.2% is the prior), and the household unemployment rate should remain steady at 3.5%.
Conclusion
That's it for me.
Have a successful trading week.
Warm Regards,
John Blank Zacks Chief Equity Strategist and Economist
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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 Taiwan Semi, Exxon Mobil and Tencent
For Immediate Release
Chicago, IL – August 30, 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: Taiwan Semi (TSM - Free Report) , Exxon Mobil (XOM - Free Report) and Tencent (TCEHY - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Tricky Markets in September? Global Week Ahead
In the Global Week Ahead, the month of September begins. This is typically the weakest month for stocks.
Traders: Keep that thought firmly in mind.
In terms of macro data, the closely watched Federal monthly jobs report for August comes out on Friday in the United States.
Consumer Price Inflation (CPI) gauges in Europe will arrive on Wednesday.
This set of key macro data will hit while the Euro threatens to push decisively below the key $1 USD/Euro parity mark.
A look at manufacturing activity in Mainland China will also arrive on Wednesday.
Next are Reuters' five world market themes, reordered for equity traders—
(1) September is usually the cruelest month for stocks
The U.S. stock market's rebound has lost some steam, just as it is entering what has been on average its most treacherous month.
Since 1950, the benchmark S&P 500 has fallen an average of 0.5% in September, the worst monthly performance for the index and one of only two months to register an average decline, according to the Stock Trader's Almanac, which notes that fund managers tend to sell underperforming positions as the end of the third quarter nears.
This September, a number of factors could set investors on edge. Following the Jackson Hole central banking symposium in Wyoming, the Fed will hold its next policy meeting on Sept. 20-21. Ahead of that comes the latest reading on consumer prices that will indicate if inflation has peaked and is likely to cause volatility no matter where it lands.
(2) On Friday, we get the August USA nonfarm payroll report
Monthly U.S. jobs data on Sept. 2nd will test the argument that the world's biggest economy is in solid health, and indicate whether the Federal Reserve can engineer a "soft landing" even as it hikes interest rates to fight inflation that has been running at four-decade highs.
Those arguing against the prospect of a recession, despite two straight quarters of shrinking U.S. gross domestic product, have been able to point to the strong labor market, at least so far.
In July, nonfarm payrolls increased by +528K jobs, the largest gain since February. Early estimates for August are projecting an increase of +290K, according to Reuters data.
(3) On Wednesday, we get the flash CPI reading for the Eurozone
Inflation in the Euro area remains uncomfortably high, the flash August consumer price index on Wednesday is likely to show. That will only pile pressure on the European Central Bank (ECB) to hike rates again in September even as recession risks mount.
Instead of peaking soon, as hoped just a few weeks ago, inflation could soon hit double digits. It was at an annual rate of +8.9% in July — well above the ECB's 2% target.
The source of fresh inflation angst is clear: soaring gas prices, which lurched higher again as Russia signaled another squeeze on European gas supplies.
Gas prices are up +45% in August, and +300% this year. Where they go from here remains the key to when Eurozone inflation will finally peak. As one economist put it, we're all becoming gas watchers now.
(4) Also on Wednesday, we get China's latest manufacturing PMI
China's moribund economy may continue the lead from the U.S. and Europe in reporting manufacturing gloom in the coming week.
Official PMI data for this month is due on Wednesday, after a surprise contraction in July as COVID-19 flare-ups fueled by the Omicron variant of the virus forced further clampdowns under China's draconian zero-COVID policies. The Caixin private survey follows the next day, and is also at risk of dipping into contraction territory.
Consumer and business confidence continue to be hit by the ongoing property crisis. And now a searing heat wave is also hampering production.
China's authorities are trying to salvage growth this year, with the central bank cutting additional lending rates on Monday after slashing others the week before. On Thursday, the government announced it would take steps to strengthen the labor market, providing the stock market with a bit of cheer.
(5) The Euro may get below U.S. Dollar parity again
Once again in recent days, one euro became worth less than a U.S. dollar. The currency's tumble to new 20-year lows near $0.99 is emblematic of the scale of the challenges facing the bloc, not the least of which is an energy crisis hitting the Eurozone harder than elsewhere.
Another dramatic jump in natural gas prices ahead of peak winter demand in a region still dependent on Russian supplies is fanning inflation fears, as well as expectations the ECB will hike rates faster even as the economy slides towards recession.
Euro/dollar is increasingly correlated with gas prices, and investors and analysts predict further weakness as Russia continues curtailing its exports.
On a trade-weighted basis, the euro is falling fast too, and recently reached its lowest level since February 2020, when the start of the COVID-19 pandemic rattled world markets.
Top Zacks #1 Rank (STRONG BUY) Stocks
Two major Asia-Pacific tech stocks made it onto our #1 list.
(1) Taiwan Semi : This is a $86 a share semiconductor industry stock, with a market cap of $454.2B. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of F.
(2) Exxon Mobil : This is a $98 a share oil conglomerate stock, with a market cap of $413B. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of A.
(3) Tencent : This is a $42 a share Mainland China tech stock, with a market cap of $406.8B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of B.
Is it time to buy the big tech names in Taiwan and Mainland China?
Key Global Macro
Wednesday looks to be a key focus this week.
On Tuesday, Mexico's household unemployment rate may get to 3.5% from 3.3%.
US JOLTS jobs openings should show us 10.7 million spots remain available.
On Wednesday, the Euro area flash broad CPI should be +9.1% y/y (prior was +8.9%), while core should be +4.0% y/y.
The Eurozone household unemployment rate should be 6.7%, up from 6.6%.
China's Caixin manufacturing PMI should be 50.4.
The U.S. ADP payroll change should be +200K in August.
On Thursday, the S&P Euro area manufacturing PMI should be 49.7 (prior was 49.8).
On Friday, U.S. nonfarm payrolls should add +290K in August, average hourly earnings should be up +5.1% y/y (5.2% is the prior), and the household unemployment rate should remain steady at 3.5%.
Conclusion
That's it for me.
Have a successful trading week.
Warm Regards,
John Blank
Zacks Chief Equity Strategist and Economist
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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.