The Zacks Analyst Blog Highlights Baidu, Intesa Sanpaolo and Swatch Group

March 19, 2023 by No Comments

For Immediate Release

Chicago, IL – January 17, 2023 – 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: Baidu BIDU, Intesa Sanpaolo ISNPY and Swatch Group SWGAY.

Here are highlights from Monday’s Analyst Blog:

An Earnings Deluge: Global Week Ahead

In this Global Week Ahead, we get a deluge of major U.S. S&P500 earnings reports, along with the latest U.S. retail sales numbers.

In the Asian region, we get a slew of Mainland China data.

Japan’s central bankers look set to raise its consumer inflation forecasts and debate further monetary policy tweaks.

In Western Europe, we get Euro area consumer inflation readings.

Business leaders and policymakers descend (in person this time) on the Swiss resort of Davos, to put the world to rights.

Next are Reuters’ five world market themes, reordered for equity traders—

(1) This week, U.S. retail sales data and more earnings reports show up

U.S. retail sales data and more earnings reports are on tap.

And investors, who have pushed up the S&P500 almost +4% so far this month after the index’s worst annual decline since 2008 last year, are paying attention.

Retail sales saw their biggest decrease in 11 months for November, and a second such drop would provide further evidence that aggressive Federal Reserve interest-rate hikes are now cooling the economy.

Economists expect a -0.5% decline in December’s number, due out on Jan. 18th, after a -0.6% decrease in November.

Investors are also watching corporate results to see if U.S. companies can beat estimates, which have been heftily reduced since October.

Goldman Sachs and Morgan Stanley report earnings on Tuesday, Procter & Gamble and Netflix on Thursday.

(2) After last week’s U.S. CPI report, we get global consumer inflation readings

With every new inflation print, investors are more convinced the worst of the global price squeeze is over.

That’s not least because, come spring and a year on from Russia’s invasion of Ukraine, the numbers will show a much smaller rise and, in some cases, even a decline.

Headline numbers might be flattered by quite how bad things were last year, but under the surface, core inflation is still climbing. And this number is what keeps central bankers awake at night.

A final read of Eurozone inflation for December, as well as readings from Britain, Canada and Japan, are due. Core inflation in all four regions is mostly rising and above target. The worst may have passed, but it’s likely to mark the end of the beginning, rather than the beginning of the end.

(3) On Tuesday, fresh Mainland Chinese macro growth data hits the tape

The new lunar year of the rabbit is almost here, with COVID-19 spreading unchecked through China.

Before then comes December’s data deluge, with industrial output, retail sales and Q4 economic growth data lining up to be ugly. Economists expect retail sales to have dropped 7.8% for a fourth straight monthly decline and for annual growth to finish up at a meager 1.8%.

Markets, hoping that China’s rapid reopening will take the sting out of global recession risks, may have to be patient.

Just as much focus will be on the two billion journeys expected to carry passengers to their hometowns to celebrate. Mainland markets close for the following week, but holiday anecdotes on willingness to travel, spend and mingle might guide their expectations about how the reopening will unfold.

(4) On Wednesday, the Bank of Japan (BoJ) wraps its two-day meeting

The Bank of Japan concludes a two-day meeting on Wednesday and investors bet it will blink, just four weeks after stunning markets by doubling the size of the band it allows 10-year bond yields (JGB) to move around zero.

The benchmark yield soared as high as 0.54% on Friday, punching through the 0.5% ceiling for the first time after butting against it in previous sessions. A media report that officials will examine bond market distortions from the massive BOJ stimulus appears to have been the final straw. The yen hit a fresh seven-month peak.

And the case for ultra-easy policy certainly seems to be weakening. Recent data showed Tokyo inflation at double the central bank’s target. And Japanese workers will hope a decision by Uniqlo’s parent company to hike wages as high as 40% will set a trend.

(5) All week long, from Monday, Jan. 16th to Friday, Jan. 20th, the World Economic Forum is underway.

A record number of world leaders, policy makers and top corporate chiefs head to the World Economic Forum (WEF) in the Swiss ski resort of Davos Jan 16-20.

The mood is somber as attendees grapple with the cost-of-living crisis, the threat of natural disasters and extreme weather events, geo-economic confrontation and failure to mitigate climate change — the top risks over the next two years, according to a survey of WEF members.

Also looming is the first anniversary of Russia’s war in Ukraine, which has rocked a global economy still reeling from the fallout of COVID-19.

ECB President Christine Lagarde, German Chancellor Olaf Scholz, NATO General Secretary Jens Stoltenberg, Chinese Vice-Premier Liu He and South Africa’s President Cyril Ramaphosa are all expected to attend.

Zacks #1 Rank (STRONG BUY) Stocks

Here are three diverse international large-cap stocks to look into.

(1) Baidu: This is a $137 a share Mainland China internet services stock, with a market cap of $47.1B. I see a Zacks Value score of B, a Zacks Growth score of D and a Zacks Momentum score of A.

(2) Intesa Sanpaolo: This is $15 a share Italian Bank stock, with a market cap of $47.2B. I see a Zacks Value score of C, a Zacks Growth score of C and a Zacks Momentum score of A.

(3) Swatch Group:This is $16 a share Swiss Apparel and Accessories stock, with a market cap of $47.2B. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of F.

These European share prices are low, aren’t they?

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