For Immediate Release
Chicago, IL – June 28, 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: Synopsis SNPS, Kroger KR and W.W. Grainger GWW
Here are highlights from Monday’s Analyst Blog:
Reflections from Sintra, Portugal Global Week Ahead
In the Global Week Ahead, a Mainland China manufacturing PMI, and the Fed's preferred U.S. consumer price inflation (CPI) index, will be macro data highlights.
On Thursday, China's main June factory activity indicator, and the USA's May personal consumption expenditures price (PCE) index data – the Fed's favorite inflation indicator – come out.
Fears keep creeping higher over global recession risks, as the mid-point of 2022 arrives. So macro data and central bank chat get extra scrutiny from stock traders this week.
As for bonds, Russia could be confirmed in default — on external sovereign bonds — for the 1st time in a century.
To focus on these global macro matters at hand, the European Central Bank (ECB) will host a three-day Jackson Hole type forum at Sintra, Portugal.
From Google, I learned that:
"Sintra is a resort town in the foothills of Portugal's Sintra Mountains, near the capital, Lisbon. A longtime royal sanctuary, its forested terrain is studded with pastel-colored villas and palaces."
"The Moorish- and Manueline-style Sintra National Palace is distinguished by dramatic twin chimneys and elaborate tilework. The hilltop 19th-century Pena National Palace is known for a whimsical design and sweeping views."
A sultry midsummer meetup for the world's central bankers.
Next are Reuters' five world market themes, reordered for equity traders.
(1) First Half (1H) of 2022 Is Over
Six months studded with rate rises, market turmoil and a war that fueled runaway inflation are giving way to another half-year featuring... more of the same.
Still, H2 may contain turning points — above all, peak inflation, which may be nearer than thought as economic growth slows and oil prices fall.
Could recession signals temper central bank hawkishness? Markets expect U.S. rates doubling by year-end to 3.25% to 3.5%, and see Eurozone rates rising to 0.75% from -0.5%.
Still, stock markets, firmly in bear territory, may get a respite. History shows equities usually fall in the run-up to inflation peaking, then rally, Goldman Sachs notes.
But that also hinges on company profits. Double-digit U.S. and European earnings growth is still projected for 2022.
Finally, watch Japan and Turkey, central bank doves in a forest of hawks. The latter is at risk of triggering a serious crisis.
(2) Lots of Fresh U.S. Macro Data Coming In
Fed Chief Powell says the central bank is not trying to engineer a recession but is committed to containing price pressures even at the risk of a downturn.
A raft of upcoming data should show how the U.S. economy is responding to an aggressive Fed, which has delivered 150 basis points worth of tightening this year, including this month's 75 bps move.
Highlights include Tuesday's June consumer confidence index, which analysts polled by Reuters expect to fall to 100 from 106.4 in May.
Monday's pending home sales and Tuesday's Case-Shiller home price index should show how much rising mortgage rates are biting, while the May personal consumption expenditures price index – an inflation indicator watched by the Fed – is due on Thursday.
(3) Mainland China Macro Data Will Be Coming In, Too
China's June factory activity figures on Thursday could offer a glimmer of hope to downbeat financial markets.
Zero COVID lockdowns and a slowing global economy have been knocking the wind out of commodities, pushing the growth-bellwether copper price almost 10% lower in two weeks in Shanghai.
Iron ore, too, is on the skids and the red-dust miners in Australia have given up the year's gains, dragging on the benchmark stock index there.
That gloom might take some piercing. But lockdowns have eased and if the data shows economic momentum carrying output into growth territory, it would be a welcome signal for the economy and for those who see Chinese stocks as a haven from the stagflation fears gripping the West.
(4) Tensions with Russia Continue to Mount
Four months into the war, tensions between Moscow and the West are ratcheting up again. EU leaders formally accepted Ukraine as a candidate to join the bloc, a bold geopolitical move triggered by Russia's invasion of Ukraine.
Meanwhile, Russian gas flows to Europe via Ukraine and the Nord Stream 1 pipeline have fallen, after the invasion and Europe's moves to impose sanctions on Moscow. A dozen EU countries are affected and Germany has triggered the "alarm stage" of its emergency gas plan.
Adding to concerns is a standoff over the Russian enclave of Kaliningrad, sparking fresh warnings from Moscow towards Baltic EU member states.
And Russia could slip into sovereign default territory as the grace period for an interest payment on its international bonds runs out, possibly heralding the country's biggest external default in more than a century.
(5) European Central Bank (ECB) Heads to Sintra, Portugal for 3 Days
The Fed has Jackson Hole, but the ECB has Sintra, its very own central bank forum in the foothills of Portugal's Sintra Mountains.
The three-day shindig, starting Monday, will be especially interesting, given the biggest inflation surge in decades and worries of an imminent global economic recession.
So, listen even more closely than usual to what ECB Chief Christine Lagarde, Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey say at the forum. ECB comments will also be scoured for any insight on a planned anti-fragmentation tool.
Separately, Friday, July 1st, will bring latest Euro area inflation readings, which in turn could determine whether the ECB will deliver bigger interest rate hikes after a quarter-point move flagged for July.
Top Zacks #1 Rank (STRONG BUY) Stocks
I pulled together three stocks from very different industries this week. The common thread is they are all strong Zacks Growth stocks.
(1) Synopsis : This is a $309 Computer Software stock, making for a market cap of $46B. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of F.
(2) Kroger : This is a $48 Retail Grocery chain stock, making for a market cap of $34B. I see a Zacks Value score of B, a Zacks Growth score of A and a Zacks Momentum score of A.
(3) W.W. Grainger : This is a $446 a share Industrial Services stock. I see a Zacks Value score of D, a Zacks Growth score of B and a Zacks Momentum score of B.
The Kroger grocery stock is the only one that is not pricey.
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