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The Zacks Analyst Blog Highlights Banco Do Brasil, Merck KGaA and Ecopetrol

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For Immediate Release

Chicago, IL – October 11, 2022 – 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: Banco Do Brasil (BDORY - Free Report) , Merck KGaA (MKGAF - Free Report) and Ecopetrol (EC - Free Report) .

Here are highlights from Monday’s Analyst Blog:

Big Banks Show Q3 Earnings: Global Week Ahead

In the Global Week Ahead, traders will be heavily influenced by consumer price inflation (CPI) data — though five big U.S. banks report Q3 earnings (BMO) on Friday, Oct. 14th.

U.S. macro data (led by the CPI out on Thursday Oct. 13th at 8:30 am ET) will no doubt be scoured for signs of a long-hoped-for FOMC "pivot" on their Fed Funds rate hiking.

According to Reuters, financial markets will also shift their macro data focus east, as key Mainland China data and policies remain in the spotlight there.

This trove of Mainland China macro data arrives, just as Beijing's once-in-five years leadership reshuffle looks set to see President Xi Jinping break with precedent, and he secures a 3rd term.

Across this week, the world’s central bank and finance chiefs gather in Washington, DC for the IMF and World Bank annual meeting — a first DC in-person meetup since 2019.

Next are Reuters’ five world market themes, reordered for equity traders—

(1) Lots of U.S. Macro Data to Study; Thursday’s CPI Most Important

U.S. inflation numbers, retail sales data, consumer sentiment gauges and minutes from the Federal Reserve’s latest meeting will give market watchers plenty to chew on.

Signs that inflation is finally starting to slip from multi-decade highs would be well received by investors, who have repeatedly had hopes dashed for that elusive pivot away from the Fed's market-punishing rate hikes. But another robust number on Thursday could bolster the case for even more hawkishness.

Wednesday's Fed minutes could lend insight on Fed thinking on the tenacity of inflation and how durable the U.S. economy is likely to be given rising borrowing costs.

Friday's retail sales and consumer sentiment data should show how U.S. consumers are faring after months of tighter monetary policy.

(2) The U.K. Economy (and Pound) Not Out of the Woods Yet

Bank of England (BoE) intervention to stem a bond market rout and a government U-turn on part of its unfunded tax-cutting plan have bought some calm to UK markets.

But the coming days will put the modest recovery in sterling and gilts to the test. It's a data-heavy week, with UK August jobs figures out on Tuesday and the August GDP estimate, industrial output data and trade balance numbers out Wednesday.

The economy is flirting with recession, and weak data could pile pressure on the government to deliver longer-term growth plans. Markets price in a 100-basis point November rate hike, meaning sharply higher borrowing costs will likely add to economic pain.

Emergency BoE bond purchases expire on Oct. 14. That could reveal just how much market nerves have been calmed.

(3) A Credit Suisse Calamity?

After an online storm of rumors over Credit Suisse's (CS) future sent its stock tumbling and default insurance cost soaring, the embattled lender will be keeping its fingers crossed that the coming days stay calm. In a bid to reassure investors, Credit Suisse ended the week by announcing a bond buyback of up to 3 billion Swiss francs ($3 billion).

The bank, beset by a series of scandals and losses, wants time to work out the final details of an overhaul to claw back the trust of skeptical investors and is set reveal its revamp plan on Oct. 27.

The only difficulty: this vision requires another throw of the dice and potentially further billions of Swiss francs in fresh capital.

And the bank's woes cast a pall over Europe's financial sector, already in the spotlight over how lenders will cope with the latest market fallout. Germany's Deutsche Bank is among those feeling the heat.

(4) A 3rd 5-year Term for China’s Xi Comes with Key Macro Data

Chinese President Xi Jinping is set to be appointed to an unprecedented third five-year term as supreme leader in the week to come.

But the days leading up to the twice-a-decade Communist party Congress will be strewn with reminders of how damaging some of his policies have been for the economy and markets.

Loan data could show how a system awash with cash still can't find borrowers, as a property crisis and crippling pandemic policy sap confidence. Exports have fallen victim to factory shutdowns as part of its pandemic counter-measures.

Investors hope for a roadmap out of the draconian zero-COVID policies, and wonder if "common prosperity" efforts will crush more than just the real-estate, hi-tech and tutoring industries.

And part of Xi's vision is a China that includes Taiwan.

(5) World Bank and IMF Annual Meetings in DC. 1st Since 2019

The who's who of finance and central banking descend on Washington for the Oct. 10-16 International Monetary Fund (IMF) and World Bank annual meeting — the first full in-person meeting since October 2019.

There is plenty to discuss. A number of developing economies are buckling under the toxic mix of high inflation, food and energy shocks, elevated borrowing costs and the fallout from climate change. Many — like Ghana, Egypt and Sri Lanka — need financial help, knocking on the door of multilateral banks, the lenders of last resort. Ukraine is pushing for a bespoke program to secure billions of funding.

But the stress is truly global, with central banks outside the United States trying to shore up their currencies against a surging dollar and the fallout from policy mistakes such as Britain's mini-budget sending tremors through markets.

Zacks #1 Rank (STRONG BUY) Stocks

Foreign stocks have been completely written off this year.

Here are three on the top of our latest #1 list.

(1) Banco Do Brasil: This is a $7.80 a share Brasilia-based Foreign Bank company, with a market cap of $22.3B. I see a Zacks Value score of A, a Zacks Growth score of B and a Zacks Momentum score of F.

(2) Merck KGaA: This is a $12 a share Darmstadt, Germany-based Science and Tech company, with a market cap of $21.9B. I see a Zacks Value score of A, a Zacks Growth score of D and a Zacks Momentum score of A.

(3) Ecopetrol: This is a $159 a share Columbia-based Oil and Gas - Emerging Markets company, with a market cap of $21.1B. I see a Zacks Value score of A, a Zacks Growth score of A and a Zacks Momentum score of D.

Someone is going to make money on these Zacks “A” Valued shares, eventually.

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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 for information about the performance numbers displayed in this press release.

See More Zacks Research for These Tickers

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Merck KGaA (MKGAF) - free report >>

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Banco Do Brasil SA (BDORY) - free report >>

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