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The Zacks Analyst Blog Highlights: Apple, ST Micro, Norbord And Lazard

Published 10/30/2017, 11:06 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – October 31, 2017 – 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 ( (NASDAQ:AAPL) ), ST Micro ( (NYSE:STM) ), Norbord ( (NYSE:OSB) ) and Lazard ( (NYSE:LAZ) ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday’s Analyst Blog:

Fresh Slice of Apple: Global Week Ahead

In the Global Week Ahead, Reuters in London has the following four global themes as the most likely to dominate the thinking of investors and traders.

(1) On Thursday, Apple Reports Earnings

Is it time for another slice of Apple? Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL) and Twitter may have helped put to bed worries of a mass tech rollover. But investors will be nervously awaiting results from Apple due on Thursday after reports of tepid demand for its new iPhones. (Note: The report is to be out after the market closes.)

Just by its size, it will have a strong impact on market sentiment. But for all the focus on the gains made by the U.S. FAANGs as they have come to be known (Facebook (NASDAQ:FB), Apple, Amazon, Netflix (NASDAQ:NFLX) and Google), there are other stocks that are roaring.

Europe’s tech sector, for example, hit its highest in nearly 16 years last week after stellar results from the likes of ST Micro and AMS — which is up 190% this year — and the STOXX 600 tech sector is far outperforming the Nasdaq in dollar terms.

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Parts of the new iPhone, and features including face recognition technology and motion sensors, are made or designed in Europe. So Apple's results could have a far-reaching impact.

(2) The Bank of England Hikes Rates – First Time in a Decade?

To hear some economists talk, the Bank of England (BoE) is about to make a big mistake: raise interest rates just as the UK economy heads into what could be a major storm.
If all goes as scripted, the bank will hike borrowing costs on Thursday for the first time in more than 10 years, with the consensus for a rise to 0.5 percent from 0.25 percent.

It may be little more than a few basis points, but for markets (and sterling in particular), it matters. The currency is up more than 6% this year against the dollar but is down over 3 % on the euro. Whether or not this turns out to be a one-and-done move on rates — or the start of something more — could be crucial.

(3) Can Emerging Markets Stay on a Roll, as U.S. Long Rates Rise?

So far, 2017 has been one of the best years ever for emerging markets. Investors have marked stellar gains on everything from Chinese stocks to local currency sovereign debt.

Last week's beating for South Africa's rand after dire budget forecasts, and pain for other high-yielders like the Turkish lira, have triggered some understandable profit taking.

The wider worry, though, is if the U.S. dollar starts barreling higher and global bond yields climb more meaningfully. Investors will be back to worrying about the ghosts and ghouls that come with record levels of debt, much of which has been borrowed in dollars.

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(4) Friday’s USA Nonfarm Jobs Report

On Friday, the monthly installment of U.S. jobs data arrives.

In last month's figures, the U.S. saw the first monthly decline in nonfarm payrolls in seven years. The culprit: Hurricanes Harvey and Irma, which hit Texas and Florida.

One reason was leisure and hospitality payrolls sliding 111,000, the largest since records began in 1939. Employment at restaurants and bars fell 104,700.

That fall in the sector's employment shifted "the mix of workers towards higher paying industries" and "biased average hourly earnings higher"; analysts at Morgan Stanley (NYSE:MS) say. But October's numbers are expected to normalize.

In general, investors will want to see broad-based wage growth. There's a sweet spot, though, and we could be right in it. Wages are expected to show between 2.5% and 3% growth after 2.9% in September. But if it comes in above 3% it could cause concerns about the impact on company profits.

This latest set of jobs data matters for the Federal Reserve. The FOMC looks to nudge up interest rates again before the year is out.

There is also the small matter of whom Donald Trump nominates as the next head of the central bank.

That could also be announced this week.

Top Zacks Rank Stocks—

(1) ST Micro is a Dutch semi chipmaker. And yes, it did report smash earnings last week. And yes, that did get the stock onto the Zacks Rank #1 list.

However, take a look at its long-term Zacks VGM score. There is an F for Value, an F for Growth and an F for momentum.

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(2) Norbord is a building products-wood company. It is about $3 billion in market cap. I noted an A in Zacks Value, an A in Zacks Growth, and an A in Zacks momentum. Watch how this stock performs, when the hurricane affected jobs report hits on Friday.

(3) Lazard is a global Investment Bank, based in NYC. It made the Zacks #1 Rank additions list at the end of last week. The Zacks Value score is A. With $6 billion in market cap and a $47 share price, let’s take a closer look.

Last Friday, Oct. 27th, Lazard reported a positive surprise of +16.4% in third-quarter 2017 earnings. The company reported adjusted earnings of 85 cents per share, comfortably surpassing the Zacks Consensus Estimate of 73 cents.

Top-line strength and growth in assets under management (AUM) were positives.

However, a rise in expenses showed up as an undermining factor.

Key Global Macro—

Monetary policy decisions from three of the world’s major central banks — the U.S. Fed, the Bank of Japan, the Bank of England — are due this week, with the first rate increase in a decade expected from the Bank of England.

Meanwhile, fresh GDP and inflation data are due from the Eurozone.

The U.S. will show its October nonfarm jobs report.

On Monday, the Bank of Japan issues a policy statement. Kuroda holds a press conference.

U.S. personal spending and income comes out for the last month. Expect a higher +0.4% mm and +0.8% m/m. This would up from +0.1% m/m and 0.2% m/m.

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Germany’s important HICP inflation rate comes out. The prior was +1.8% y/y.

On Tuesday, the BoJ outlook report comes out.

In Brazil, the COPOM monetary policy minutes get released.

Taiwan’s GDP comes out. The last report was +2.13% y/y. Not as high as you would think!

The Eurozone’s advance GDP growth rate hits. The prior was +2.3% y/y. Also, the Eurozone HICP inflation rate hits. The prior there was +1.6% y/y; and finally the Eurozone unemployment rate comes out. The prior was 9.1%.

The national unemployment rate for Brazil comes out. Consensus sees no change from 12.6%.

The Chicago PMI comes out. The prior was red hot at 65.2.

On Wednesday, the China Caixin manufacturing PMI comes out. The call is for 51 to go to 50.90.

India’s manufacturing PMI comes out. The prior was 51.2.

The ADP employment survey hits in the USA. The call is for a rise to 230K from a hurricane hit 135K.

The US manufacturing PMI comes out. The prior was 54.5.

The FOMC issues its fed funds call. The prior was 1.25%.

On Thursday, the Eurozone manufacturing PMI comes out. The prior was 58.6.

Germany’s unemployment rate comes out. The prior was 5.6%.

The Bank of England (BoE) releases its latest minutes. There is a monetary policy committee meeting and a rate decision. The prior rate is 0.25%.

U.S. initial clams look low again at 233K.

On Friday, U.S. nonfarm payroll comes out. The -33K could go to +340K, both for the same reason: Hurricanes.

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The U.S. unemployment rate should bounce to 4.4% from 4.2%.

The ISM non-manufacturing index for the USA comes out. The prior was 59.8 and the forecast is for 58.5.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for 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.

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Norbord Inc. (OSB): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Lazard Ltd. (LAZ): Free Stock Analysis Report

STMicroelectronics N.V. (STM): Free Stock Analysis Report

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