The Zacks Analyst Blog Highlights: Apple, Shopify and China Construction Bank
The Zacks Analyst Blog Highlights: Apple, Shopify and China Construction Bank
For Immediate Release
Chicago, IL – September 21, 2021 – 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: Apple Inc. AAPL, Shopify Inc. SHOP and China Construction Bank Corporation CICHY.
Here are highlights from Monday’s Analyst Blog:
Central Banks Take Center Stage: Global Week Ahead
In the Global Week Ahead, the world’s major central banks, really all of them, take center stage.
From the USA, the Fed’s latest economic projections; Chair Powell’s presser; and, of course, any specific details from the larger FOMC voting contingent on an explicit taper timeline; those Wednesday actions and data will keep traders everywhere focused.
In addition, the PBoC in China, the BoJ in Japan, the BoE in the United Kingdom, and a few smaller-sized players in monetary policy; those actors will be meaningfully added into this collective global main event.
Across every trading day of the last 18 months, what keeps benchmark advanced country stock indices aloft is ongoing regular pulses of G10 central bank liquidity.
Next are Reuters’ five world market themes, reordered for equity traders.
(1) Fed Meeting Breaks Wednesday
Several central banking big-hitters meet in coming days, with the U.S. Federal Reserve's Sept. 21-22 meeting topping the must-watch list.
The timing of the Fed's U.S. tapering plans remains the key question, and recent data suggests caution may be warranted: the U.S. economy created the fewest jobs in seven months in August, and consumer prices increased at their slowest pace in six months.
Several officials say the Fed's tapering of its pandemic stimulus will start this year, a view Fed chief Jerome Powell may echo, while stressing an interest rate rise is still way off.
The Bank of Japan, which also meets on Tuesday and Wednesday, will keep policy steady but could well warn of growing risks to exports from supply disruptions.
(2) Other Major Central Bank Meetings Likely to Follow Fed’s Lead
Confirmation that a major central bank is raising interest rates rather than just talking about it, will be significant for markets hooked on cheap cash. On Thursday, Norway's central bank is set to become the first from the developed world to hike rates since the pandemic, likely raising its main 0% rate to 0.25%.
The Bank of England is unlikely to change policy but with consumer price growth at a 9-year high in August, traders are pricing a rate rise next May. The BoE may signal at its Thursday meeting whether or not it still views inflation as transitory.
We will hear from the laggards, too — Switzerland is not expected to begin shrinking its balance sheet or lifting rates, the world's lowest, until long after the others. Sweden is forecast to keep rates at 0% until 2024 but its monetary policy announcement on Tuesday may well reflect a rethink after strong inflation readings.
(3) Is Evergrande Toast?
Cash-strapped Chinese property developer Evergrande needs to come up with $120 million worth of bond coupon payments.
That such a tiny amount could be the tipping point for a $355 billion behemoth with more than 1,300 developments across China and over $300 billion of liabilities shows how bad things are.
China's no. 2 developer has been scrambling to raise cash, with fire sales on apartments and stake sales in its sprawling business network, but with little success.
As it teeters between a messy meltdown, a managed collapse, or — least likely — a government bailout, the risk of contagion is in focus. Evergrande's Hong Kong-listed shares have plunged more than 80% this year; an index of Chinese high-yield dollar debt index is at a 17-month trough.
(4) Did the Delta Variant Dent Manufacturing PMIs?
Purchasing managers indexes, an oft-used gauge of economic growth and corporate sentiment, are running well above historical averages, but advance readings for September — due Thursday in many countries — will likely show PMIs edging further off the highs hit earlier this year.
The Delta COVID-19 variant, supply chain bottlenecks and soaring input costs have been showing up in PMIs in recent months. IHS Markit's Eurozone manufacturing PMIs, for instance, slipped in August to 61.4 from 63 in July, and are expected to ease further this month to 60.5.
A JPMorgan composite global PMI index was at 52.6 in August, six points off record highs hit in May. These are still healthy readings, above the 50 mark that separates growth from contraction, so central bankers meeting in coming days probably have no cause to fret just yet.
(5) Canadian Election Happens Today
Canadian Prime Minister Justin Trudeau gambled in calling an early election, but opinion polls indicate it may backfire.
Ahead of Monday's vote, Trudeau's Liberals are virtually tied with the opposition Conservatives, raising the prospect that no party will be able to form even a stable minority government.
The prospect of a deadlock that hampers Ottawa's response to COVID-19 is causing some anxiety — Canada's dollar has shed 1% since Trudeau called the vote in mid-August (two years before schedule), and stocks are near three-weeks lows.
Political uncertainty looms elsewhere, too, with Germany's Sept. 26 election possibly leading to protracted coalition talks.
Zacks #1 Rank (STRONG BUY) Stocks
Let’s look into the biggest market-cap stocks on our #1 List this week.
(1) Apple: This is a 2.46T market-cap stock, pricing at $147 a share. I see a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of F.
(2) Shopify: This is a $184B market cap stock, pricing at a shocking $1,461 a share. I see a Zacks Value score of F, a Zacks Growth score of D, and a Zacks Momentum score of B.
(3) China Construction Bank: This is a $181.3B market cap stock, pricing at a paltry $14.43 a share. I see a Zacks Value score of B, a Zacks Growth score of F, and a Zacks Momentum score of A.
Crazy: Look at the share price difference between SHOP and CICHY.
The first four-digit stock price shows the power of momentum trading. The second two-digit stock price shows the worry about heavier China regulations.
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