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The Zacks Analyst Blog Highlights Microsoft, Alphabet, Synopsis, NetEase and Palantir
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For Immediate Release
Chicago, IL – July 25, 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: Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) , Synopsis (SNPS - Free Report) , NetEase (NTES - Free Report) and Palantir Technologies (PLTR - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Microsoft, Alphabet and Core PCE: Global Week Ahead
In the Global Week Ahead, the peak Northern Hemisphere holiday season gears up.
But school's not quite out for summer -- inside the world’s financial markets.
Stock traders get:
On Monday, the first PMI snapshots of July manufacturing activity
Lots of S&P500 earnings (MSFT and GOOGL are tops), and
Lots of large-cap European earnings
Both bond and stock traders get:
On Wednesday, the U.S. Fed likely hiking 25 basis points
On Thursday, the European Central Bank (ECB), and
On Friday, the Bank of Japan (BoJ) meeting
On Friday, the core Personal Consumption Expenditure (PCE) data for June
A snap Spanish election happened on Sunday.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Yes, It’s Still Earnings Season. Both in the USA and Europe
European quarterly earnings are starting to trickle in. The season will be a crucial one, with the STOXX 600 share index (STOXX) up about +8% year to date.
The rally has sputtered in July ahead of what Barclays describes as a "make it or break it" quarterly reporting season.
Second-quarter earnings are expected to decrease -9.2% from a year earlier, according to I/B/E/S data from Refinitiv, with aggregate earnings likely to be weighed down by poor performance from energy companies.
Stocks rallied earlier this year as investors, who were mostly bearish about Europe, switched their positions as global growth continued to defy expectations.
That is a macroeconomic story rather than an earnings narrative, which makes European equities vulnerable to companies missing profit targets.
A better-than-expected outcome, on the other hand, could fuel another bull run.
(2) On Wednesday, the FOMC Likely Hikes 25 Basis Points
And just like that, the next Federal Reserve meeting is right around the corner.
U.S. inflation is cooling but markets expect one more rate hike on July 26th.
The more interesting question is whether Chair Jerome Powell will signal the Fed is more confident inflation can cool further while growth stays resilient, meaning the most aggressive rate hiking cycle in decades is nearing an end.
Signs that the Fed is unlikely to raise rates much further would, in theory, keep the wind in the sails of a buoyant Wall Street, while the dollar's tumble will likely continue.
Also in focus are earnings from some of the massive tech and growth stocks that have led markets higher this year.
Among them are Microsoft and Alphabet, which report on July 25th.
(3) On Thursday, the ECB Announces Its Policy Rates Decision
Before they go on their summer break, ECB policymakers have a well-flagged rate hike to deliver.
That will come on Thursday, with the key deposit rate tipped to rise a quarter point to 3.75%.
ECB chief Christine Lagarde will no doubt be pressed for clarity on what happens in September, and economists are divided over whether there will be another rate increase or pause.
Note, hawk Klaas Knot says any move beyond July is "by no means a certainty.”
Underlying inflation, a key focus for the ECB, remains high, but economic growth is weakening. The previously resilient services sector barely grew in June.
The July PMI snapshot of business activity, out globally in coming days, should provide some further insights, as should the ECB's latest bank lending survey.
Rate-setters' summer reading list just got longer.
(4) Also on Thursday, the Bank of Japan (BoJ) Announces Policy Rate Decisions
The Bank of Japan wants to promote communication with markets, but something may have been lost in translation.
Comments from top rate-setters have tied investors in knots before a keenly anticipated two-day policy meeting starting on Thursday.
Governor Kazuo Ueda's message of "steady as she goes" on stimulus, including yield curve control (YCC), was seen, by some, to have been undone by recent remarks by deputy Shinichi Uchida.
Uchida says he "strongly acknowledges" YCC's negative impact, which hawks took as a hint of an imminent raising of the 0.5% ceiling for 10-year bond yields.
Ueda then again backed continued easing in its current form and data on Friday showed inflation may have peaked.
The benchmark yield has swung from 0.4% to a four-month high of 0.485% over the past two weeks, with the market dividing itself sharply into two camps.
That creates plenty of opportunity for another jolting BOJ surprise.
(5) On Sunday, Spain Voted in a Snap Election
Spain voted in a snap election on Sunday.
No party won sufficient support in Spain's election on Sunday to form a government, leaving the country to face weeks of contentious negotiations or potentially new elections.
Key for markets is how quickly the winner can form a government — it's a cliche that equity markets hate uncertainty — but it's said for a reason.
Also in focus?
Whether pressure on the main parties to cut taxes or increase spending worsens Spain's finances.
High debt above 100% of GDP, a slowing economy and tighter EU fiscal rules coming into force in 2024 are concentrating minds.
Stock-pickers are also keeping an eye on the energy sector, where the two main parties have different priorities, and financials, with the outlook for Spain's temporary banking levy in doubt.
Zacks #1 Rank (STRONG BUY) Stocks
Let’s return to the large-cap Info Tech space. But look into less-known names.
(1) Synopsis:This is a Computer Software) industry player. The stock price is at $452. There is a current market cap of $67.1B.
I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of F.
Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries.
The company offers a full suite of products used in the logic synthesis and functional verification phases of chip design, including a broad array of reusable design building blocks. It also sells physical synthesis and physical design products as well as physical verification products.
The company’s products are used to design a chip, from concept to the point of delivery to the manufacturer for fabrication.
Synopsis provides software and hardware, which are used to develop electronic systems that incorporate chips.
Additionally, the company provides Intellectual Property (IP) used in semiconductor design and manufacturing to simplify the design process and accelerate time-to-market for its customers.
Synopsis reports revenues in three segments, namely Time-Based Products, Upfront Products and Maintenance and Service.
Time-Based Products (59% of fiscal 2022 revenues): Segment revenues are recognized as Technology Subscription License (TSL) revenues. Under this segment, the company recognizes revenues from fees over the period of the license or as and when the installments are paid by the customer, whichever is later.
Upfront Products (24%): These revenues are recognized as Term License revenues. Under this segment, the company recognizes revenues from term licenses in full after the completion of the shipment of the software, wherein at least 75% of the license fee is paid within a year of shipment, after fulfilling all other revenue recognition criteria.
Maintenance and Service (17%): Under this segment revenues come from maintenance fees that are generated over the maintenance period; along with revenues generated from professional service and training fees.
The company conducts its business across four geographic regions namely: North America (47% of fiscal 2022 revenues), China (16%), Europe (10%), Korea (10%) and others (17%). Synopsys’ competitors include EDA vendors like Cadence Design Systems Inc. and Mentor Graphics Corp.
(2) NetEase: This is a $102 stock in the Internet Software & Services industry.
This company’s stock currently has a market cap of $67.2B.
I see a Zacks Value score of C, a Zacks Growth score of C, and a Zacks Momentum score of A.
NetEase, Inc. is an Internet technology company engaged in the development of applications, services and other technologies for the Internet in China.
It provides online gaming services that include in-house developed massively multi-player online role-playing games and licensed titles.
NetEase also provides online advertising, community services, entertainment content, free e-mail services and micro-blogging services.
The Company also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the web that are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
NetEase, Inc., formerly known as NetEase.com, Inc., is based in Beijing, the People's Republic of China.
(3) Palantir Technologies: This is a $17 stock found in the Technology Services industry. There is a market cap of $36.2B.
I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of F.
Palantir Technologies Inc. builds and deploys software platforms for the intelligence community principally in the United States.
Palantir Technologies Inc. is based in Denver, CO.
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 Microsoft, Alphabet, Synopsis, NetEase and Palantir
For Immediate Release
Chicago, IL – July 25, 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: Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) , Synopsis (SNPS - Free Report) , NetEase (NTES - Free Report) and Palantir Technologies (PLTR - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Microsoft, Alphabet and Core PCE: Global Week Ahead
In the Global Week Ahead, the peak Northern Hemisphere holiday season gears up.
But school's not quite out for summer -- inside the world’s financial markets.
Stock traders get:
Both bond and stock traders get:
A snap Spanish election happened on Sunday.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) Yes, It’s Still Earnings Season. Both in the USA and Europe
European quarterly earnings are starting to trickle in. The season will be a crucial one, with the STOXX 600 share index (STOXX) up about +8% year to date.
The rally has sputtered in July ahead of what Barclays describes as a "make it or break it" quarterly reporting season.
Second-quarter earnings are expected to decrease -9.2% from a year earlier, according to I/B/E/S data from Refinitiv, with aggregate earnings likely to be weighed down by poor performance from energy companies.
Stocks rallied earlier this year as investors, who were mostly bearish about Europe, switched their positions as global growth continued to defy expectations.
That is a macroeconomic story rather than an earnings narrative, which makes European equities vulnerable to companies missing profit targets.
A better-than-expected outcome, on the other hand, could fuel another bull run.
(2) On Wednesday, the FOMC Likely Hikes 25 Basis Points
And just like that, the next Federal Reserve meeting is right around the corner.
U.S. inflation is cooling but markets expect one more rate hike on July 26th.
The more interesting question is whether Chair Jerome Powell will signal the Fed is more confident inflation can cool further while growth stays resilient, meaning the most aggressive rate hiking cycle in decades is nearing an end.
Signs that the Fed is unlikely to raise rates much further would, in theory, keep the wind in the sails of a buoyant Wall Street, while the dollar's tumble will likely continue.
Also in focus are earnings from some of the massive tech and growth stocks that have led markets higher this year.
Among them are Microsoft and Alphabet, which report on July 25th.
(3) On Thursday, the ECB Announces Its Policy Rates Decision
Before they go on their summer break, ECB policymakers have a well-flagged rate hike to deliver.
That will come on Thursday, with the key deposit rate tipped to rise a quarter point to 3.75%.
ECB chief Christine Lagarde will no doubt be pressed for clarity on what happens in September, and economists are divided over whether there will be another rate increase or pause.
Note, hawk Klaas Knot says any move beyond July is "by no means a certainty.”
Underlying inflation, a key focus for the ECB, remains high, but economic growth is weakening. The previously resilient services sector barely grew in June.
The July PMI snapshot of business activity, out globally in coming days, should provide some further insights, as should the ECB's latest bank lending survey.
Rate-setters' summer reading list just got longer.
(4) Also on Thursday, the Bank of Japan (BoJ) Announces Policy Rate Decisions
The Bank of Japan wants to promote communication with markets, but something may have been lost in translation.
Comments from top rate-setters have tied investors in knots before a keenly anticipated two-day policy meeting starting on Thursday.
Governor Kazuo Ueda's message of "steady as she goes" on stimulus, including yield curve control (YCC), was seen, by some, to have been undone by recent remarks by deputy Shinichi Uchida.
Uchida says he "strongly acknowledges" YCC's negative impact, which hawks took as a hint of an imminent raising of the 0.5% ceiling for 10-year bond yields.
Ueda then again backed continued easing in its current form and data on Friday showed inflation may have peaked.
The benchmark yield has swung from 0.4% to a four-month high of 0.485% over the past two weeks, with the market dividing itself sharply into two camps.
That creates plenty of opportunity for another jolting BOJ surprise.
(5) On Sunday, Spain Voted in a Snap Election
Spain voted in a snap election on Sunday.
No party won sufficient support in Spain's election on Sunday to form a government, leaving the country to face weeks of contentious negotiations or potentially new elections.
Key for markets is how quickly the winner can form a government — it's a cliche that equity markets hate uncertainty — but it's said for a reason.
Also in focus?
Whether pressure on the main parties to cut taxes or increase spending worsens Spain's finances.
High debt above 100% of GDP, a slowing economy and tighter EU fiscal rules coming into force in 2024 are concentrating minds.
Stock-pickers are also keeping an eye on the energy sector, where the two main parties have different priorities, and financials, with the outlook for Spain's temporary banking levy in doubt.
Zacks #1 Rank (STRONG BUY) Stocks
Let’s return to the large-cap Info Tech space. But look into less-known names.
(1) Synopsis:This is a Computer Software) industry player. The stock price is at $452. There is a current market cap of $67.1B.
I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of F.
Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries.
The company offers a full suite of products used in the logic synthesis and functional verification phases of chip design, including a broad array of reusable design building blocks. It also sells physical synthesis and physical design products as well as physical verification products.
The company’s products are used to design a chip, from concept to the point of delivery to the manufacturer for fabrication.
Synopsis provides software and hardware, which are used to develop electronic systems that incorporate chips.
Additionally, the company provides Intellectual Property (IP) used in semiconductor design and manufacturing to simplify the design process and accelerate time-to-market for its customers.
Synopsis reports revenues in three segments, namely Time-Based Products, Upfront Products and Maintenance and Service.
Time-Based Products (59% of fiscal 2022 revenues): Segment revenues are recognized as Technology Subscription License (TSL) revenues. Under this segment, the company recognizes revenues from fees over the period of the license or as and when the installments are paid by the customer, whichever is later.
Upfront Products (24%): These revenues are recognized as Term License revenues. Under this segment, the company recognizes revenues from term licenses in full after the completion of the shipment of the software, wherein at least 75% of the license fee is paid within a year of shipment, after fulfilling all other revenue recognition criteria.
Maintenance and Service (17%): Under this segment revenues come from maintenance fees that are generated over the maintenance period; along with revenues generated from professional service and training fees.
The company conducts its business across four geographic regions namely: North America (47% of fiscal 2022 revenues), China (16%), Europe (10%), Korea (10%) and others (17%). Synopsys’ competitors include EDA vendors like Cadence Design Systems Inc. and Mentor Graphics Corp.
(2) NetEase: This is a $102 stock in the Internet Software & Services industry.
This company’s stock currently has a market cap of $67.2B.
I see a Zacks Value score of C, a Zacks Growth score of C, and a Zacks Momentum score of A.
NetEase, Inc. is an Internet technology company engaged in the development of applications, services and other technologies for the Internet in China.
It provides online gaming services that include in-house developed massively multi-player online role-playing games and licensed titles.
NetEase also provides online advertising, community services, entertainment content, free e-mail services and micro-blogging services.
The Company also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the web that are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
NetEase, Inc., formerly known as NetEase.com, Inc., is based in Beijing, the People's Republic of China.
(3) Palantir Technologies: This is a $17 stock found in the Technology Services industry. There is a market cap of $36.2B.
I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of F.
Palantir Technologies Inc. builds and deploys software platforms for the intelligence community principally in the United States.
Palantir Technologies Inc. is based in Denver, CO.
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.