Chicago, IL – August 13, 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: Nomura Research Institute NRILY, Manhattan Associates MANH and Exact Sciences EXAS.
Global markets are having a torrid time of late — as U.S. recession fears creep back in, and the effects of the Japanese yen's sudden surge ripple out.
· July U.S. consumer price inflation (CPI) numbers
· A slew of U.K. macro data
Offer beaten-up stock traders a fresh set of fundamentals.
Investors should have learned by now that there's no such thing as a "quiet" summer in markets.
A year ago, U.S. Treasury yields rose sharply on worries about the U.S. fiscal outlook.
The summer before, inflation and rate hike fears jolted markets.
Monday's meltdown saw Japan's second-biggest stock crash and the largest-ever intraday jump in Wall Street's most-watched gauge of investor anxiety,the VIX (VIX).
That means the coming days will be tinged with nervousness, even if there are nascent signs of recovery.
Focus is on just how much more of an unwinding of so-called "yen carry trades," seen as one reason behind the rout, is left — and whether the pricing-in of aggressive U.S. rate cuts are justified by upcoming data.
And with concerns about a broader Middle East conflict and a U.S. election looming, volatility is unlikely to disappear soon.
Investors are now bracing for Wednesday's U.S. CPI data for a read on how inflation is faring in the world's largest economy amid recent signs that growth is wobbling.
Market hopes of an economic soft landing have been shaken by recent weak data, including news of a rapid down-shift in the jobs market. The slowdown fears have coalesced with the unwinding of a global carry trade to deliver markets a wallop.
Some analysts believe recession worries are premature.
Economists polled by Reuters expect both headline and core consumer prices rose +0.2% in July from a month earlier.
A number that shows only modest cooling could allay fears that the Federal Reserve has sent the economy into a tailspin by leaving rates elevated for too long.
But a weak report could bolster recession worries, potentially sparking fresh market volatility.
(3) Europe's shares -5% this month. Q2 earnings there up +3.8%. UBS on deck.
There's a silver lining for European shares, down roughly -5% so far this month, and that's corporate profits, with earnings set to grow for the first time in five quarters.
According to LSEG I/B/E/S data, Q2 earnings are expected to have increased +3.8% from the same period last year, the first quarterly rise since the first quarter of 2021. Almost 56% of companies have reported results that beat analyst estimates.
For sure, there are more tests ahead. Switzerland's largest bank UBS (UBS) reports earnings on Wednesday, while it's a big week for the insurance sector, with Hannover Re, Aviva, NN Group and Admiral set to report.
Overall, the Q2 earnings season suggests signs of a consumer slowdown, but strong growth in financials, energy and utilities sectors have helped offset weakness elsewhere.
(4) On Thursday, Japan reports Q2 growth. The Yen carry trade remains a focus.
Japan reports preliminary second-quarter growth figures on Thursday, at a time where some analysts have critiqued the Bank of Japan's (BOJ) recent rate hike as a policy misstep that triggered the brutal selloff in stocks.
To be sure, the connection isn't quite so straightforward.
The BOJ's hike sparked a resurgence in the yen and extended an unwinding of the hugely popular "yen carry trade," which in turn sent investors de-leveraging and shedding their stock holdings to cut losses.
So should Thursday's data point to a brighter outlook, Japanese policymakers can finally breathe a sigh of relief.
A downside miss and they'd have to find more reasons to justify July's hike.
It's yet another busy week in Asia-Pacific, with a New Zealand rate decision due on Wednesday, alongside a slew of data from China.
(5) Take a look through a number of major U.K. macro prints.
After July's finely balanced decision to cut U.K. rates to 5.0%, the Bank of England will have a new set of data points to go through that might help determine what the coming few months look like for monetary policy.
Consumer inflation, including for the still-hot services sector, as well as second-quarter GDP and retail sales, are all in the mix.
Right now, markets expect rates to fall by a percentage point over the coming nine months.
But given how close July's decision was, U.K. assets are likely to be extra sensitive to anything that might suggest the BoE has to deviate from that expected path.
Sterling is looking fragile, and U.K. equities have seen nothing but weekly outflows for four straight months, according to LSEG/Lipper data.
I focus on large-cap growth stocks – those with a Zacks Growth score of A or B.
(1) Nomura Research Institute: This is a $31 stock with a market cap of $17.3B. It is found in the Business Services-Technology Services industry. I see a Zacks Value score of C, a Zacks Growth score of A and a Zacks Momentum score of A.
Nomura Research Institute provides research, business consulting and systems services.
Its operating segment consists of Consulting, Financial Information Technology Solutions, Industrial IT Solutions, IT Platform Services and Others.
· Consulting segment provides management and systems consulting services.
· Financial IT Solutions segment offers IT solutions for securities, asset management, banking and insurance sectors.
· Industrial IT Solutions segment deals with IT solutions and infrastructure services for distribution, manufacturing, service and healthcare industries, as well as for governments and other public agencies.
· IT Platform Services segment handles system management and advanced information technology solutions. It also conducts research for the development of new business operations and new products related to IT solutions.
· Others segment administers systems development and operation services on other businesses.
Nomura Research Institute is headquartered in Tokyo, Japan.
(2) Manhattan Associates: This is a $239 stock with a market cap of $14.7B. It is found in the Computer and Technology – Computer Software industry. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of D.
Manhattan Associates is the global leader in providing supply chain execution and optimization solutions.
It enables operational excellence through its warehouse, transportation, distributed order management, reverse logistics and trading partner management solutions, as well as its RFID, performance management and event management capabilities.
These Integrated Logistics Solutions(™) leverage state-of-the-art technologies, innovative practices and domain expertise to enhance performance, profitability and competitive advantage.
Manhattan Associates has licensed more than 900 customers representing more than 1,600 facilities worldwide, which include some of the world's leading manufacturers, distributors and retailers.
(3) Exact Sciences: This is a $56 stock with a market cap of $10.3B. It is found in the Medical – Biomedical and Genetics industry. I see a Zacks Value score of D, a Zacks Growth score of A and a Zacks Momentum score of C.
Exact Sciences Corp. is a molecular diagnostics company focused on the early detection and prevention of some of the deadliest forms of cancer. The company has developed an accurate, non-invasive, patient-friendly screening test called Cologuard for the early detection of colorectal cancer and pre-cancer.
The company is currently working on the development of additional tests for other types of cancer, with the goal of becoming a leader in cancer screening and diagnostics.
On Nov 8, 2019, Exact Sciences completed the acquisition of Genomic Health for a value of approximately $2.8 billion. Prior to merger, Genomic Health was a prominent provider of genomic-based diagnostic tests in the field of cancer care. The company used to offer its line of products under the brand name Oncotype DX.
At present, Exact Sciences products and services focus on Scre ening and Precision Oncology Tests. Within these two segments, Exact Sciences has two of the strongest brands in cancer diagnostics, Cologuard and Oncotype DX respectively.
Screening Tests (74.6% of total revenues in 2023, up 31% from 2022): The company's Screening tests primarily includes laboratory service revenue from Cologuard tests and Prevention Genetics.
Cologuard Test: The company's flagship screening product, the Cologuard test, is a patient-friendly, non-invasive stool-based DNA (sDNA) screening test that utilizes a multi-target approach to detect DNA and hemoglobin biomarkers associated with colorectal cancer and pre-cancer.
Precision Oncology Tests (25.2% of total revenues in 2023, up 5% from 2022): These tests deliver actionable genomic insights to inform prognosis and cancer treatment after a diagnosis.
Oncotype DX:Genomic Health's first product, the 21-gene Oncotype DX breast cancer test launched in Jan 2004, is used to predict the likelihood of cancer recurrence, patient survival within 10 years of diagnosis and chemotherapy benefit for early-stage patients.
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