Highlights from Zacks analyst blog: Xilinx, Stellantis and Nutrien


For immediate release

Chicago, IL – November 9, 2021 – Zacks.com announces the list of stocks featured on the Analysts Blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Recent actions featured in the blog include: Xilinx, Inc. XLNX, Stellantis NV STLA and Nutrien Ltd. NTR.

Here are highlights from Monday’s analyst blog:

Sheraz Mian Third Quarter Results Dashboard: A Global Week Ahead

Global Week Ahead presents third quarter results for more than 850 companies, including 13 members of the S&P 500.

Applying the results through Friday, November 5, we have third quarter results for 445 S&P 500 members, or 89.2% of the total index members.

The total profits (aggregate net income) of these companies are on the rise:

– + 42.9% compared to the same period last year, on

– + 18.6% of turnover up, while

– 80.2% exceed estimates of EPS, and

– 74.4% exceeded revenue estimates

– The proportion of companies exceeding estimates of EPS and turnover is 62.9%

For Technology, Q3 results relate to 82.5% of the sector’s S&P 500 market capitalization.

– The third quarter total profits of these tech companies are up + 35.8% compared to the same period last year

– + 17.3% in turnover up, while

– 86.4% exceeded EPS estimates, and

– 71.2% exceeded revenue estimates

Expectations for the third trimester and beyond

Looking at the quarter as a whole, combining actual published results with estimates from upcoming companies, the S&P 500 Index’s third quarter total earnings should be up:

– + 39.7% compared to the same period last year

– + 16.5% of turnover up

For a detailed look at the overall earnings picture, including expectations for the coming periods, please see our weekly earnings trends report >>>> Watch margins against inflation and logistics challenges

Next come Reuters’ five global market themes, reorganized for equity traders and investors …

(1) When are central bank rate hikes important… for equities?

Global markets are often rocked by the switch of investors between risk on or off.

To mix things up, the feeling these days is driven by an on / off mindset.

One day, it is a question of raising the rates of the big central banks soon (sell bonds, buy bank stocks) and the next day, it is a question of delaying the tightening as long as possible (buying bonds, sending stocks towards new records).

The latter view is currently dominating after the largest central banks objected to aggressive rate hike bets. The Bank of England has just defied expectations of rate hikes by keeping its policy unchanged.

But uncertainty about the rate outlook remains high. And that means alternating between “hiking” and “out” days could become the norm.

Prepare for more volatility.

(2) A new US consumer price index (CPI) comes out on Wednesday

The U.S. Consumer Price Index released Wednesday is expected to have risen 0.5% in October after rising 0.4% in September as Americans paid more for food, rent and other goods.

It remains to be seen whether the current rise in prices is fleeting, resulting from temporary effects as the economy emerges from the pandemic, or signals the start of a new upward trend.

The last Federal Reserve meeting was convinced that high inflation would prove to be “transitory”, although it recognizes that global supply difficulties add to inflation risks.

He managed to unveil a decrease in monthly bond purchases without triggering a market “tantrum”. A strong impression of inflation which renews the discussions on the hike of the rates could change that.

(3) European blue chip report next week

Next week’s European blue chip report includes financial data Allianz, Aviva and Zurich Insurance, drug manufacturers Merck and AstraZeneca and steelmaker Arcelor Mittal.

European stocks have never been higher, and the latest wave of earnings could prove to be a catalyst for further peaks.

Third-quarter earnings growth expectations jumped to 57.2% year-on-year from 47.6% two weeks ago; so far, almost 66% of companies have exceeded expectations.

Fear of missing out on the post COVID-19 recovery and negative “real” bond yields help explain the resilience of the stock market. But how long can the party last? After all, the recovery in profits accrued after the COVID-19 2020 recession is expected to slow in 2022.

(4) Important international trade data comes to the tape

Accommodative policies in the developed world fueled huge demand for consumer goods, leading to this year’s trade rebound.

Exports of emerging economies, from raw materials to semiconductors, have surged. Shortages and price hikes ensued.

But trade may now be at a crossroads. Economists predict that post-COVID normalcy will allow Western consumers to spend less on goods and more on travel and restaurants. This could allow stocks to rise and cool merchandise trade in early 2022.

Sunday’s data will show whether power shortages in China have slowed exports and whether the slowing economy is hurting imports.

A slump in U.S. exports has pushed its trade deficit to record highs, so Tuesday’s German data will be watched after August’s export volumes plummeted for the first time in 15 months.

Finally, on Monday, semiconductor giant Taiwan could post a 16th month of export growth.

(5) The Chinese Communist Party unites

A Chinese Communist Party rally in Beijing is expected to pass a landmark resolution, laying the groundwork for President Xi’s unprecedented third term.

The first of these resolutions, in 1945, paved the way for Mao Zedong to become the supreme leader while the second, in 1981, laid the groundwork for Deng Xioaping’s era of reforms.

This can signal that Xi’s path is the one ahead, leading to “common prosperity” and moving away from growth at all costs.

The precariousness of the moment is unlikely to be mentioned, with China’s growth engines collapsing and credit markets collapsing as global monetary policy changes. Caveat bouncer.

Top Zacks # 1 Rank (strong buy) Stocks

Don’t be afraid to look past trendy chip stocks. Let me show you what I mean.

(1) Xilinx: It is a programmable logic chip stock at $ 198 per share with a market cap of $ 45.2 billion. I see a Zacks Value score of F, a Zacks Growth score of F, and a Zacks Momentum score of C.

(2) Stellantis: It is an American-foreign automobile manufacturer (formed in 2021 by the merger of Fiat-Chrysler and the French group PSA). The shares are currently trading at $ 20 each, which represents a market cap of $ 41.3 billion. I see a Zacks Value score of A, a Zacks Growth score of A, and a Zacks Momentum score of C.

(3) Nutrients: It’s a fertilizer business. The shares are trading at $ 67 each and the market cap is $ 38.3 billion. I see a Zacks Value score of B, a Zacks Growth score of A, and a Zacks Momentum score of A.

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