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The Zacks Analyst Blog Highlights Novo Nordisk, Swisscom and HSBC
Read MoreHide Full Article
For Immediate Release
Chicago, IL – March 7, 2023 – 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: Novo Nordisk (NVO - Free Report) , Swisscom (SCMWY - Free Report) and HSBC (HSBC - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Finally, Nonfarm Jobs Numbers! Global Week Ahead
In the Global Week Ahead, Fed Chair Powell testifies for two days to Congress.
On Wednesday, both the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) offer policy rate decisions.
On Thursday, in Europe, key U.K. macro growth data hits the tape.
On Friday, in the Asia-Pacific, the Bank of Japan's boss looks set to bow out.
Also on Friday, at 8:30 am ET, traders finally get FEB U.S. nonfarm jobs numbers.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Where do global financial markets (bonds and equities) head in March?
Markets have moved into March in a muddle.
After a red-hot January rally, bonds and equities retreated in February as strong data sparked concerns about more rate hikes.
Ahead of the Fed's March 22nd meeting, more wild swings could be next.
Money markets are increasingly positioning for the Fed to extend its most aggressive tightening cycle since the 1980s.
But the world's dominant central bank might also view recent robust economic performance as temporary, sticking to its forecast of a soft economic landing.
Jittery government bond markets suggest sentiment will keep shifting between these two views.
An index of volatility in the $24 trillion U.S. Treasury market, where yields underpin asset valuations worldwide, rose by the most in February since June 2022 and continued climbing as March got underway.
(2) On Friday, FEB U.S. Nonfarm Jobs Report
It's all about jobs, and Friday's February U.S. employment report takes on added significance after stunningly strong January data prompted a rethink on projections for an economic slowdown and the Fed's rate path.
Another dose of hot job growth after January's payrolls increase of 517,000 trounced estimates could stoke fears of more hawkish Fed action. Initial expectations are for a 200,000 increase in jobs in February, according to a Reuters poll.
Fed Chief Powell, meanwhile, testifies before a U.S. Congressional committee on Tuesday. Powell has said the January jobs report showed why the battle against inflation will "take quite a bit of time.”
Investors expect another 25 basis point hike from the Fed, but market pricing suggests a slightly higher chance for a bigger increase than had previously been the case. Powell's comments and the jobs data could help settle what the Fed does later this month.
(3) On Thursday, Key U.K. Macro Data
The British economy, which narrowly avoided falling into recession in the last three months of 2022, is showing signs of life.
Business activity, consumer confidence and a pick-up in tax revenues means some analysts have upgraded growth forecasts.
The Bank of England, which many had widely expected to wrap up its 15-month-old tightening cycle this month, might now have to keep raising rates, not least as consumers and businesses appear to be holding up in the face of double-digit inflation.
Data on Thursday for how the economy fared in January might offer a glimmer of optimism.
That said, Britain is the only G7 economy that is still smaller than before the coronavirus pandemic. The International Monetary Fund (IMF) believes it will be the only G7 economy to shrink this year.
(4) China’s National People’s Congress Kicks Off
The National People's Congress, China's annual parliament session, opened over the weekend. It comes as global investors turn cautious given worries over the direction of policy, economic stimulus, and regulations in the world's No.2 economy.
Growth targets set for 2023 include +5% in the overall economy, following 3% in 2022, as Covid restrictions continue to roll off. Outgoing Premier Li Keqiang targets 12 million urban jobs created this year, and forecasts +3.0% GDP, outpacing last year’s +2.8%.
The direction the Congress sets for the property market and infrastructure spending is also key to appetite for commodities and China's high-yield bond market. Keqiang looks to be replaced as Premier by ex-Shanghai party leader Li Qiang, while President Xi Jinping continues his third leadership term, which breaks with recent tradition.
(5) The Bank of Japan’s (BoJ) Governor Kurodo Chairs Final Policy Meeting
After a decade at the top of the Bank of Japan, overseeing ever-more complex stimulus measures, Governor Haruhiko Kuroda chairs his last policy meeting at the end of the week.
As recently as a month ago, investors thought there could be fireworks, with unpopular yield curve controls tumbling down. But a series of band aids, and the stated dovishness of successor Kazuo Ueda, have cooled investor attacks on the bond market for now.
Meanwhile the Reserve Bank of Australia meets Tuesday, and investors there have also reeled in hawkish rate-hike bets.
The RBA hinted at further tightening at its meeting last month, but data since then has pointed the other way. The economy grew at the weakest pace in a year last quarter, and January consumer price data suggested inflation may be past the peak.
Top Zacks #1 Rank (STRONG BUY) Stocks
I noted three very large Europe-based companies on our #1 list this week.
(1) Novo Nordisk: This is a $145 a share stock, with a market cap of $327.9B. It is a Denmark-based global health care company, I see a Zacks Value score of D, a Zacks Growth score of F and a Zacks Momentum score of F.
(2) Swisscom: This is a $63 a share stock, with a market cap of $324.6B. It It is Switzerland’s leading telecom company. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of B.
(3) HSBC: This is a $37 a share foreign bank company, headquartered in London, with a market cap of $147B. I see a Zacks Value score of B, a Zacks Growth score of C and a Zacks Momentum score of A.
So much for Europe’s economy falling apart!
Key Global Macro
On Monday, the Swiss Consumer Price Index (CPI) comes out for FEB. I see the prior is +3.3% y/y, and the consensus is +2.9% y/y. Note this data. The Swiss have some of the lowest CPI rates. How did they achieve it? Has to be related to their central bank management, in some way.
On Tuesday, Fed Chair Powell testifies for two days, starting today.
On Wednesday, the Reserve Bank of Australia’s (RBA) head Lowe gives a speech.
Euro Area GDP for Q4 should be finalized at +1.9% y/y.
U.S. ADP private job additions should be +168K in FEB, after +106K in JAN.
The Bank of Canada (BoC) offers an interest rate decision.
On Thursday, Mainland China’s CPI for FEB should be +2.1% y/y, and their PPI for FEB should be -2.9% y/y. Both data are low, due to heavy COVID shutdowns.
On Friday, the Bank of Japan (BoJ) offers a policy rate decision.
U.S. nonfarm job additions for FEB are pegged at -35K, with the prior at +517K.
The U.S. household unemployment rate should be 3.4%. Again.
Conclusion
Do we get a weak FEB jobs print?
Note: The U.S. economist consensus shows us a FEB -35K Federal nonfarm jobs print, the Reuters’ consensus is for +200K, and the ADP private jobs consensus is for +168K.
Acknowledging the above constructs, I am thinking this: We get a substantial downward revision to that huge +517K JAN Federal jobs data.
(These are not post hoc data!)
We shall see.
Fed Chair Powell is data-dependent.
Across Tuesday and Wednesday, stock traders get two days of formal Congressional testimony from him. Keep that event firmly in your minds, too.
In turn, Friday jobs numbers will be a major input to FOMC members’ future “dot-plots.“
Shortly, their models get carefully updated. In advance of their March 21st-22nd meeting.
The economist game, when played well, is thankfully tedious.
Have a great early March trading week.
John Blank Zacks Chief Equity Strategist and Economist
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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 Novo Nordisk, Swisscom and HSBC
For Immediate Release
Chicago, IL – March 7, 2023 – 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: Novo Nordisk (NVO - Free Report) , Swisscom (SCMWY - Free Report) and HSBC (HSBC - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Finally, Nonfarm Jobs Numbers! Global Week Ahead
In the Global Week Ahead, Fed Chair Powell testifies for two days to Congress.
On Wednesday, both the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) offer policy rate decisions.
On Thursday, in Europe, key U.K. macro growth data hits the tape.
On Friday, in the Asia-Pacific, the Bank of Japan's boss looks set to bow out.
Also on Friday, at 8:30 am ET, traders finally get FEB U.S. nonfarm jobs numbers.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Where do global financial markets (bonds and equities) head in March?
Markets have moved into March in a muddle.
After a red-hot January rally, bonds and equities retreated in February as strong data sparked concerns about more rate hikes.
Ahead of the Fed's March 22nd meeting, more wild swings could be next.
Money markets are increasingly positioning for the Fed to extend its most aggressive tightening cycle since the 1980s.
But the world's dominant central bank might also view recent robust economic performance as temporary, sticking to its forecast of a soft economic landing.
Jittery government bond markets suggest sentiment will keep shifting between these two views.
An index of volatility in the $24 trillion U.S. Treasury market, where yields underpin asset valuations worldwide, rose by the most in February since June 2022 and continued climbing as March got underway.
(2) On Friday, FEB U.S. Nonfarm Jobs Report
It's all about jobs, and Friday's February U.S. employment report takes on added significance after stunningly strong January data prompted a rethink on projections for an economic slowdown and the Fed's rate path.
Another dose of hot job growth after January's payrolls increase of 517,000 trounced estimates could stoke fears of more hawkish Fed action. Initial expectations are for a 200,000 increase in jobs in February, according to a Reuters poll.
Fed Chief Powell, meanwhile, testifies before a U.S. Congressional committee on Tuesday. Powell has said the January jobs report showed why the battle against inflation will "take quite a bit of time.”
Investors expect another 25 basis point hike from the Fed, but market pricing suggests a slightly higher chance for a bigger increase than had previously been the case. Powell's comments and the jobs data could help settle what the Fed does later this month.
(3) On Thursday, Key U.K. Macro Data
The British economy, which narrowly avoided falling into recession in the last three months of 2022, is showing signs of life.
Business activity, consumer confidence and a pick-up in tax revenues means some analysts have upgraded growth forecasts.
The Bank of England, which many had widely expected to wrap up its 15-month-old tightening cycle this month, might now have to keep raising rates, not least as consumers and businesses appear to be holding up in the face of double-digit inflation.
Data on Thursday for how the economy fared in January might offer a glimmer of optimism.
That said, Britain is the only G7 economy that is still smaller than before the coronavirus pandemic. The International Monetary Fund (IMF) believes it will be the only G7 economy to shrink this year.
(4) China’s National People’s Congress Kicks Off
The National People's Congress, China's annual parliament session, opened over the weekend. It comes as global investors turn cautious given worries over the direction of policy, economic stimulus, and regulations in the world's No.2 economy.
Growth targets set for 2023 include +5% in the overall economy, following 3% in 2022, as Covid restrictions continue to roll off. Outgoing Premier Li Keqiang targets 12 million urban jobs created this year, and forecasts +3.0% GDP, outpacing last year’s +2.8%.
The direction the Congress sets for the property market and infrastructure spending is also key to appetite for commodities and China's high-yield bond market. Keqiang looks to be replaced as Premier by ex-Shanghai party leader Li Qiang, while President Xi Jinping continues his third leadership term, which breaks with recent tradition.
(5) The Bank of Japan’s (BoJ) Governor Kurodo Chairs Final Policy Meeting
After a decade at the top of the Bank of Japan, overseeing ever-more complex stimulus measures, Governor Haruhiko Kuroda chairs his last policy meeting at the end of the week.
As recently as a month ago, investors thought there could be fireworks, with unpopular yield curve controls tumbling down. But a series of band aids, and the stated dovishness of successor Kazuo Ueda, have cooled investor attacks on the bond market for now.
Meanwhile the Reserve Bank of Australia meets Tuesday, and investors there have also reeled in hawkish rate-hike bets.
The RBA hinted at further tightening at its meeting last month, but data since then has pointed the other way. The economy grew at the weakest pace in a year last quarter, and January consumer price data suggested inflation may be past the peak.
Top Zacks #1 Rank (STRONG BUY) Stocks
I noted three very large Europe-based companies on our #1 list this week.
(1) Novo Nordisk: This is a $145 a share stock, with a market cap of $327.9B. It is a Denmark-based global health care company, I see a Zacks Value score of D, a Zacks Growth score of F and a Zacks Momentum score of F.
(2) Swisscom: This is a $63 a share stock, with a market cap of $324.6B. It It is Switzerland’s leading telecom company. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of B.
(3) HSBC: This is a $37 a share foreign bank company, headquartered in London, with a market cap of $147B. I see a Zacks Value score of B, a Zacks Growth score of C and a Zacks Momentum score of A.
So much for Europe’s economy falling apart!
Key Global Macro
On Monday, the Swiss Consumer Price Index (CPI) comes out for FEB. I see the prior is +3.3% y/y, and the consensus is +2.9% y/y. Note this data. The Swiss have some of the lowest CPI rates. How did they achieve it? Has to be related to their central bank management, in some way.
On Tuesday, Fed Chair Powell testifies for two days, starting today.
On Wednesday, the Reserve Bank of Australia’s (RBA) head Lowe gives a speech.
Euro Area GDP for Q4 should be finalized at +1.9% y/y.
U.S. ADP private job additions should be +168K in FEB, after +106K in JAN.
The Bank of Canada (BoC) offers an interest rate decision.
On Thursday, Mainland China’s CPI for FEB should be +2.1% y/y, and their PPI for FEB should be -2.9% y/y. Both data are low, due to heavy COVID shutdowns.
On Friday, the Bank of Japan (BoJ) offers a policy rate decision.
U.S. nonfarm job additions for FEB are pegged at -35K, with the prior at +517K.
The U.S. household unemployment rate should be 3.4%. Again.
Conclusion
Do we get a weak FEB jobs print?
Note: The U.S. economist consensus shows us a FEB -35K Federal nonfarm jobs print, the Reuters’ consensus is for +200K, and the ADP private jobs consensus is for +168K.
Acknowledging the above constructs, I am thinking this: We get a substantial downward revision to that huge +517K JAN Federal jobs data.
(These are not post hoc data!)
We shall see.
Fed Chair Powell is data-dependent.
Across Tuesday and Wednesday, stock traders get two days of formal Congressional testimony from him. Keep that event firmly in your minds, too.
In turn, Friday jobs numbers will be a major input to FOMC members’ future “dot-plots.“
Shortly, their models get carefully updated. In advance of their March 21st-22nd meeting.
The economist game, when played well, is thankfully tedious.
Have a great early March trading week.
John Blank
Zacks Chief Equity Strategist and Economist
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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.