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The Zacks Analyst Blog Highlights On Semiconductor, Ross Stores and Constellation Energy
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For Immediate Release
Chicago, IL – October 3, 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: On Semiconductor (ON - Free Report) , Ross Stores (ROST - Free Report) and Constellation Energy Corp. (CEG - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Nonfarm Payroll Week: Global Week Ahead
On Friday, we get closely-watched U.S. jobs data.
In the Global Week Ahead, thankfully, there won’t be a U.S. federal gov’t shutdown, led by the U.S House of Representatives. But a Ukraine military funding bill must still pass.
In the Asia-Pacific region, real estate developer China Evergrande remains on the brink.
Also helping to kick off the fourth fiscal quarter of 2023, there are central bank meetings in Australia, New Zealand and Poland.
This happens while stock and bond markets still adjust to central banks' higher-for-longer rates mantra.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) The third quarter ends, and the fourth quarter begins.
Markets kick off the all-important final quarter of the year after a game-changer of a last few months, driven largely by a +30% surge in oil prices.
Higher rates mean U.S. Treasuries and German Bunds — often the main ballast of portfolios — have cost investors between 5.5% and 6.5% in Q3.
Even gold has lost its shine, meaning that the U.S. dollar has really been the only safety play in town.
Equity bulls have also been biffed. World stocks are still up a respectable +8% for the year but have given back almost -5% in September with even the global tech giants reversing.
Q4, though, will bring another earnings season, and while the AI boom still matters, analysts will be ultra-focused on the what the traditional economy players say about the cost pain or lack of it that their customers are now feeling.
(2) Will the 10-year U.S. Treasury yield reach 5.0%?
Just how high government bond yields climb is on the watch list after yet another market sell-off.
The 10-year U.S. Treasury yield has risen to 4.6%, its highest level since the October 2007, as investors absorb the Federal Reserve message that rates will stay high until inflation is quashed.
That has also steepened yield curves sharply, as long-dated bond yields are rising much faster than shorter-dated ones.
The yield surge has hammered stocks and helped push the dollar to its highest in almost a year.
INGreckons a 5.0% handle on U.S. Treasury yields and 3.0% for 10-year German Bunds are "looking more probable by the day.”
At around 2.9%, German yields are near their highest levels since 2011.
(3) Political damages to assess from Washington DC?
The world's No.1 economy was on the brink of another possible government shutdown.
That could have damaged its credit rating further, exacerbated stock market volatility, and delayed economic releases, including the key Oct. 6th jobs report.
Hundreds of thousands of federal workers would have been furloughed, and a wide range of services would have paused, if Congress had not passed this 45-day funding legislation. Democratic President Joe Biden signed it into law by midnight on Saturday Sept. 30th.
Still, the lack of Ukrainian funding in the stopgap bill is further evidence of how political polarization in Washington is weakening fiscal policymaking, Moody's says.
Investors will now get timely updates on the economy from the U.S. Federal government.
Economists polled by Reuters expect the U.S. economy has created +150K jobs in September versus +187K in August.
Stronger-than-expected data would likely bolster the 'higher for longer' rates stance that is hurting bonds and stocks.
(4) A new Reserve Bank of Australia (RBA) governor.
The Reserve Bank of Australia's new governor, Michele Bullock — the first woman to head the bank — chairs her first meeting on Tuesday.
Investors will be looking for signals from Bullock, known as a straight-talker, on whether the RBA is done with hikes or if more might be coming after some signs of inflation smoldering in the services sector.
The consensus is for a pause.
China is another risk for Australia's economy, of course: a property sector teetering on the edge of collapse flashes red lights for Australian raw material exports.
The window into what Beijing is doing to prop up the sector — if anything — will basically be shut next week, given the Golden Week holiday.
Meanwhile, New Zealand's Reserve Bank meets on Wednesday. Despite a hawkish bias, a hike is viewed as a long shot.
The focus is on any signals for a possible November move.
(5) The Polish central bank meets.
In early September, Poland's central bank governor Adam Glapinski stunned markets.
He delivered a much larger than expected 75-basis point rate cut to 6% for emerging Europe's biggest economy, where inflation is still in double digits.
The move sent the zloty sharply lower and came at a tense time for Poland, which heads to the polls on Oct. 15th.
With the cost of living a key election battleground, the drastic cut brings relief to those struggling with mortgage repayments.
But it also adds to pressure on the fiscal side combined with a deluge of election promises featuring generous spending commitments across the political spectrum, fanning concerns over the outlook for inflation.
On Wednesday, policy makers meet to decide the next step in interest rates.
Zacks #1 Rank (STRONG BUY) Stocks
(1) On Semiconductor: This is a $94 stock in the Semiconductor - Analog and Mixed industry. The market cap is $39.7B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of C.
ON Semiconductor is an equipment manufacturer of a broad range of discrete & embedded semiconductor components.
On Semi's product lines include bipolar transistors, diodes, filters, FETs, rectifiers & thyristors.
A secure supply of ADAS SiC chips are needed to meet the growing demand of customers for SiC based solutions:
Automated Driver Assist Systems (ADAS) enable modern vehicles to become semi-autonomous with increased safety, minimizing fatalities and injuries
The technology evolves every model year, leading to increased levels of safety and ultimately fully autonomous vehicles
Systems such as adaptive front lighting, autopilot, park assist, surround-view and rearview cameras, lane departure warning, automatic emergency braking, adaptive cruise control, and collision avoidance are becoming mainstream
The company's acquisitions of Cypress Semiconductor's CMOS Image Sensor Business Unit, SANYO Semiconductor, AMI Semiconductor, Analog Devices' power PC controller business, CMD, Catalyst, & Sound Design gave it:
New technical capabilities
Some custom ASIC products
Higher-margin products
Exposure to new end markets, and
Greater product breadth
The power management product line includes AC-DC controllers & regulators, DC-DC converters & regulators, drivers, thermal managers, & voltage controllers, references & supervisors.
The logic product line includes clocking, memory, differential logic & standard logic products.
(2) Ross Stores: This is a $112 stock in the U.S. Retail – Discount Store industry. The market cap is $37.1 B. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of D.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States.
The company operates its stores under the Ross Dress for Less (Ross) names. The company's stores are located mostly in community and neighborhood shopping centers in heavily populated urban and suburban areas.
Ross Stores primarily offers in-season, branded, and designer apparel, footwear, accessories and other home-related merchandise for everyone in the family.
This format primarily targets middle-income households.
The stores features more moderately-priced first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family.
These stores target moderate-income households. The stores offer products at a 20% to 70% lesser price than the moderate department and discount stores.
(3) Constellation Energy Corp.: This is a $109 stock in the Alternative Energy - Utility industry. The market cap is $35.6B. I see a Zacks Value score of D, a Zacks Growth score of D, and a Zacks Momentum score of D.
After a recent strong earnings report on Aug. 10th, Constellation Energy raised its adjusted EBITDA guidance for 2023 to the range of $3,300-$3,700 million from the previously projected band of $2,900-$3,300 million.
Constellation Energy generates and markets electricity.
Its operating segment consist Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions.
The company sells natural gas, renewable energy and other energy-related products and services.
Constellation Energy is based in Baltimore, Maryland.
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 On Semiconductor, Ross Stores and Constellation Energy
For Immediate Release
Chicago, IL – October 3, 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: On Semiconductor (ON - Free Report) , Ross Stores (ROST - Free Report) and Constellation Energy Corp. (CEG - Free Report) .
Here are highlights from Monday’s Analyst Blog:
A Nonfarm Payroll Week: Global Week Ahead
On Friday, we get closely-watched U.S. jobs data.
In the Global Week Ahead, thankfully, there won’t be a U.S. federal gov’t shutdown, led by the U.S House of Representatives. But a Ukraine military funding bill must still pass.
In the Asia-Pacific region, real estate developer China Evergrande remains on the brink.
Also helping to kick off the fourth fiscal quarter of 2023, there are central bank meetings in Australia, New Zealand and Poland.
This happens while stock and bond markets still adjust to central banks' higher-for-longer rates mantra.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) The third quarter ends, and the fourth quarter begins.
Markets kick off the all-important final quarter of the year after a game-changer of a last few months, driven largely by a +30% surge in oil prices.
Higher rates mean U.S. Treasuries and German Bunds — often the main ballast of portfolios — have cost investors between 5.5% and 6.5% in Q3.
Even gold has lost its shine, meaning that the U.S. dollar has really been the only safety play in town.
Equity bulls have also been biffed. World stocks are still up a respectable +8% for the year but have given back almost -5% in September with even the global tech giants reversing.
Q4, though, will bring another earnings season, and while the AI boom still matters, analysts will be ultra-focused on the what the traditional economy players say about the cost pain or lack of it that their customers are now feeling.
(2) Will the 10-year U.S. Treasury yield reach 5.0%?
Just how high government bond yields climb is on the watch list after yet another market sell-off.
The 10-year U.S. Treasury yield has risen to 4.6%, its highest level since the October 2007, as investors absorb the Federal Reserve message that rates will stay high until inflation is quashed.
That has also steepened yield curves sharply, as long-dated bond yields are rising much faster than shorter-dated ones.
The yield surge has hammered stocks and helped push the dollar to its highest in almost a year.
INGreckons a 5.0% handle on U.S. Treasury yields and 3.0% for 10-year German Bunds are "looking more probable by the day.”
At around 2.9%, German yields are near their highest levels since 2011.
(3) Political damages to assess from Washington DC?
The world's No.1 economy was on the brink of another possible government shutdown.
That could have damaged its credit rating further, exacerbated stock market volatility, and delayed economic releases, including the key Oct. 6th jobs report.
Hundreds of thousands of federal workers would have been furloughed, and a wide range of services would have paused, if Congress had not passed this 45-day funding legislation. Democratic President Joe Biden signed it into law by midnight on Saturday Sept. 30th.
Still, the lack of Ukrainian funding in the stopgap bill is further evidence of how political polarization in Washington is weakening fiscal policymaking, Moody's says.
Investors will now get timely updates on the economy from the U.S. Federal government.
Economists polled by Reuters expect the U.S. economy has created +150K jobs in September versus +187K in August.
Stronger-than-expected data would likely bolster the 'higher for longer' rates stance that is hurting bonds and stocks.
(4) A new Reserve Bank of Australia (RBA) governor.
The Reserve Bank of Australia's new governor, Michele Bullock — the first woman to head the bank — chairs her first meeting on Tuesday.
Investors will be looking for signals from Bullock, known as a straight-talker, on whether the RBA is done with hikes or if more might be coming after some signs of inflation smoldering in the services sector.
The consensus is for a pause.
China is another risk for Australia's economy, of course: a property sector teetering on the edge of collapse flashes red lights for Australian raw material exports.
The window into what Beijing is doing to prop up the sector — if anything — will basically be shut next week, given the Golden Week holiday.
Meanwhile, New Zealand's Reserve Bank meets on Wednesday. Despite a hawkish bias, a hike is viewed as a long shot.
The focus is on any signals for a possible November move.
(5) The Polish central bank meets.
In early September, Poland's central bank governor Adam Glapinski stunned markets.
He delivered a much larger than expected 75-basis point rate cut to 6% for emerging Europe's biggest economy, where inflation is still in double digits.
The move sent the zloty sharply lower and came at a tense time for Poland, which heads to the polls on Oct. 15th.
With the cost of living a key election battleground, the drastic cut brings relief to those struggling with mortgage repayments.
But it also adds to pressure on the fiscal side combined with a deluge of election promises featuring generous spending commitments across the political spectrum, fanning concerns over the outlook for inflation.
On Wednesday, policy makers meet to decide the next step in interest rates.
Zacks #1 Rank (STRONG BUY) Stocks
(1) On Semiconductor: This is a $94 stock in the Semiconductor - Analog and Mixed industry. The market cap is $39.7B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of C.
ON Semiconductor is an equipment manufacturer of a broad range of discrete & embedded semiconductor components.
On Semi's product lines include bipolar transistors, diodes, filters, FETs, rectifiers & thyristors.
A secure supply of ADAS SiC chips are needed to meet the growing demand of customers for SiC based solutions:
The company's acquisitions of Cypress Semiconductor's CMOS Image Sensor Business Unit, SANYO Semiconductor, AMI Semiconductor, Analog Devices' power PC controller business, CMD, Catalyst, & Sound Design gave it:
The power management product line includes AC-DC controllers & regulators, DC-DC converters & regulators, drivers, thermal managers, & voltage controllers, references & supervisors.
The logic product line includes clocking, memory, differential logic & standard logic products.
(2) Ross Stores: This is a $112 stock in the U.S. Retail – Discount Store industry. The market cap is $37.1 B. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of D.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States.
The company operates its stores under the Ross Dress for Less (Ross) names. The company's stores are located mostly in community and neighborhood shopping centers in heavily populated urban and suburban areas.
Ross Stores primarily offers in-season, branded, and designer apparel, footwear, accessories and other home-related merchandise for everyone in the family.
This format primarily targets middle-income households.
The stores features more moderately-priced first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family.
These stores target moderate-income households. The stores offer products at a 20% to 70% lesser price than the moderate department and discount stores.
(3) Constellation Energy Corp.: This is a $109 stock in the Alternative Energy - Utility industry. The market cap is $35.6B. I see a Zacks Value score of D, a Zacks Growth score of D, and a Zacks Momentum score of D.
After a recent strong earnings report on Aug. 10th, Constellation Energy raised its adjusted EBITDA guidance for 2023 to the range of $3,300-$3,700 million from the previously projected band of $2,900-$3,300 million.
Constellation Energy generates and markets electricity.
Its operating segment consist Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions.
The company sells natural gas, renewable energy and other energy-related products and services.
Constellation Energy is based in Baltimore, Maryland.
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.
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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.