The Zacks Analyst Blog JPMorgan, Wells Fargo BlackRock, PepsiCo and Delta
For Immediate Releases
Chicago, IL – October 8, 2024 – 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: JPMorgan Chase JPM, Wells Fargo WFC, and BlackRock BLK, PepsiCo PEP, and Delta Air Lines DAL.
Here are highlights from Tuesday’s Analyst Blog:
Global Week Ahead: Q3 Earnings Season
It's a packed Global Week Ahead.
Traders can expect:
• U.S. inflation data
• The start of Q3 earnings
• A French budget, and
• Possibly, a big rate cut from New Zealand
Investors are also on edge -- as Middle East tensions escalate.
Meanwhile, Japan's new Prime Minister, Shigeru Ishiba, is in the spotlight.
Next are Reuters' five world market themes, reordered for equity traders -
(1) U.S. Q3 Earnings Season: Kicking into Gear
U.S. third-quarter earnings season is about to kick into gear, posing a test for a stock market near record highs and trading at elevated valuations.
JPMorgan Chase, Wells Fargo, and BlackRock, report on Friday. Other results earlier in the week include PepsiCo, and Delta Air Lines.
S&P 500 companies overall are expected to have increased Q3 earnings by +5.3% from a year earlier, according to LSEG IBES.
Thursday's September U.S. consumer price index, meanwhile, will be closely watched for signs that inflation is moderating.
Investors are already anticipating hefty rate cuts, after the Federal Reserve kicked off its easing cycle last month.
Elsewhere, investors will seek to gauge the economic fallout from a dockworker strike, as U.S. East Coast and Gulf Coast ports reopened on Thursday.
(2) One solid year of war for Israel and Hamas
One year on from Hamas' Oct. 7th attack on Israel and the region looks on the brink of a sprawling war that could potentially reshape the oil-rich Middle East.
The conflict, which has killed more than 42,000 people, the vast majority in Gaza, is spreading. Israeli troops are now in neighboring Lebanon, home to Iran-backed Hezbollah; Iran launched a large-scale missile attack on Israel earlier this week.
Global markets have remained broadly unfazed. Oil prices, the main conduit for tremors further afield, have jumped about +8% this week, but soft demand and ample supply globally have kept a lid on gains.
A further escalation between Iran and Israel could change that, especially if Israel strikes Iran's oil facilities, an option that U.S. President Joe Biden said was under discussion.
The scars of the conflict are visible on Israel's economy, which has suffered a number of sovereign downgrades and seen its default insurance spike and bonds slide.
(3) What is Japan’s New Prime Minister Going to Do?
When Shigeru Ishiba surprised markets by winning the contest to become Japan's prime minister, investors rushed to re-position themselves for higher interest rates.
A week on and the landscape looks different, as Ishiba back-flipped not just on monetary policy, but on prior market-unfriendly support for higher corporate and capital gains taxes.
It's perhaps not surprising for a hawk to hide his talons with a snap election looming on Oct. 27th.
Even so, Ishiba was unabashedly blunt, saying after a meeting with the Bank of Japan - whose independence Ishiba has pledged to honor - that the economy is not ready for further rate hikes.
The yen, which had been surging, slid past 147 to a six-week trough by Thursday. Japanese stocks rebounded from their steepest slide since early August.
Check back in a month from now for any further policy flip-flops.
(4) On Thursday, France’ New Government Presents its First Budget
France's new government presents its long-awaited budget to parliament on Thursday. It's planning a 60-billion-euro belt-tightening drive, around 2.0% of GDP, next year.
It reckons spending cuts and tax hikes should bring the deficit, seen rising to -6.1% this year in the latest upward revision, to 5% by end-2025.
The target date for reaching the euro zone's 3.0% deficit limit is also being pushed back to 2029 from 2027.
That's bad news just ahead of rating reviews kicking off with Fitch next Friday.
Markets are not impressed.
Having eased slightly, the extra premium France pays for its 10-year debt over Germany's widened back to just under 80 bps, near its highest since August.
Ultimately, what may matter more is whether Prime Minister Michel Barnier can pass the budget, given a divided parliament that has investors questioning how long his government will last.
(5) On Wednesday, Oct. 9th, the Reserve Bank of New Zealand (RBNZ) Meets.
A reluctant joiner to global easing, the Reserve Bank of New Zealand is catching up fast.
It meets on Oct. 9th.
Traders reckon the central bank could follow the Fed's example and cut rates by half a point.
The RBNZ cut rates by 25 bps to 5.25% in August, a year ahead of its own projections.
Markets price in a drop below 3% by end-2025. This will still be above where traders think U.S. and euro area rates will be.
Shorter-term investors are neutral towards the kiwi, but hedge funds have lapped it up this year.
Positioning and potentially higher rates than others might insulate New Zealand's currency.
So could the return of so-called carry trades and in this case, essentially a bearish bet on the yen in favor of bullish ones on high-yielders such as the kiwi.
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