Chicago, IL – October 22, 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: Tesla TSLA, Alphabet GOOGL, Alibaba BABA, Siemens SIEGY and BYD BYDDY.
Start your electric engines, Tesla is the first of the "Mag 7" to report Q3 earnings
Meanwhile, the world’s finance chiefs descend on Washington D.C., and
Markets get a taste of how business activity PMIs are holding up in October
Just as the U.S. Presidential election looms
Tesla shares have taken a hit this month, following a long-awaited unveiling of its robo-taxis that some investors said was short on practical details.
Year-to-date, Tesla's shares have lost around -11%, compared to the S&P500's +22.5% gain.
A weaker-than-expected Tesla earnings in late July, along with underwhelming results from Google-parent Alphabet, sparked a U.S. stocks selloff that was a prelude to the steeper drop in early August.
Though investors are more optimistic about the U.S. economy after a blowout jobs report and last month’s 50 bps rate cut from the Federal Reserve, a soft earnings report from Tesla on Oct. 23rd could reignite worries about tech stock valuations, which have climbed along with the broader indexes.
Chinese stocks have been a near-perfect barometer of expectations for big bang stimulus from Beijing, and just a glance at a chart of the past two months shows how quickly hopes have been deflated.
Since the announcement of the biggest and broadest stimulus since the pandemic in late September, one highly anticipated briefing after another has passed without the details investors are craving — particularly the size of fiscal spending.
Just how powerful the fine print can be was shown Friday, when the launch of promised swap and re-lending schemes sparked a stock surge.
But with further stimulus clarity not expected in any major capacity before a meeting of parliament's standing committee, probably early next month — which leaves a weeks-long void when stoking the equity rally — looks a very big ask.
(3) On Thursday, October 24th, OCT Purchasing Manager Indices (PMIs) Arrive
When September business activity data were released a month ago, investors got a shock from news of a sharp Eurozone contraction and ramped-up ECB rate-cut bets.
So, October PMIs on Thursday will likely be scrutinized for a sense of how rapidly rates have further to fall. PMI data from other economies are published the same day.
Note, the final Eurozone September purchasing managers index, while below the 50 mark that divides contraction from expansion, was not as dire as the initial estimate.
And other data suggest tentative reasons for optimism in a bloc that has skirted recession for over a year. Q3 lending demand rose; German sentiment has improved.
But tell that to the euro. It will lag as long as investors reckon the ECB will ease policy at a faster pace than the Fed.
(4) On Oct. 30th, New Labour Government in the U.K. Presents First Budget
The U.K.'s new Labour government presents its first budget on Oct. 30th and with the nation's finances strained and growth stalling, investors will scrutinize fresh monthly government borrowing data next week.
Public sector net debt has hit 100% of economic output and government borrowing in August, at 13.73 billion pounds, 3 billion pounds above economists' forecasts. September's borrowing amount will be revealed on Oct. 22nd.
After finance minister Rachel Reeves identified a fiscal "black hole" worth 22 billion pounds, but ruled out raising taxes on working people, stock market investors suspect they are in the firing line from potential hikes to capital gains taxes.
Bond market lenders are also, according to BNY, selling gilts at the fastest pace since former Prime Minister Liz Truss' chaotic 2022 mini-budget, as speculation mounts about the UK increasing debt issuance to fund public investment.
(5) Finance Officials Head to the IMF & World Bank Annual Meetings in D.C.
Finance officials head to Washington DC for the annual meeting of the International Monetary Fund and World Bank Group from Monday to debate how countries can navigate slowing growth and ever-rising debt.
Some 5,000 miles east, in the Russian city of Kazan, President Vladimir Putin hosts a summit of BRICS leaders, seeking support in his standoff with the West.
Russia says leaders from Brazil, India, China, South Africa, Egypt, the UAE and Saudi Arabia, which account for a third of global economic output, will be there. Key topics include a push to end U.S. dollar dominance.
By then, there will be just days to go to the biggest political risk event of 2024: a U.S. election that is too close to call and one that could mark the start of a new global trade war if Donald Trump wins — a prospect seen as damaging to economies everywhere.
Let’s look into two major Mainland China large caps, and one German multi-national.
It is meaningful that these stocks are on our fresh #1 large-cap stock list. This means their covering analysts, have raised their annual earnings estimates on them recently.
(1) Alibaba: After its recent share price surge, this is a $100 a share Mainland China stock, with a market cap of $244.7B. It is in the Internet-Commerce industry. The Zacks Value score is A, the Zacks Growth score is C and the Zacks Momentum Score is B.
Alibaba Group Holding is one of the leading e-commerce giants in China.
Over the last few years, the company has transformed itself from being a traditional e-commerce company to a conglomerate that has businesses ranging from logistics and food delivery to cloud computing.
Alibaba Group is represented by three businesses – Alibaba.com, Taobao and Tmall.
The company's businesses account for more than half of all online retail sales in China, which is one of the world’s fastest-growing e-commerce markets.
Taobao is one of Alibaba Group’s most profitable marketplaces, which generates more than 80% of its sales, thanks to soaring demand for high-quality imported brands in China.
The company is well positioned in the New Retail space. In this space, it aims to bring together digital payments, e-commerce, f ood delivery and other parts of the business into one big ecosystem.
The ubiquity of smartphones and evolution of physical and online commerce are helping the company to gain momentum in this space.
Launched in 2009, the cloud business is now one of the biggest in China. The cloud computing has gradually become one of the fastest-growing businesses and the second-largest revenue source for Alibaba.
The company has also become a renowned name in the growing entertainment and media market, driven by increasing demand for videos across its platform and growing partnerships.
Total revenues were RMB 941.2 billion ($130.35 billion) in fiscal 2024, up 8% from fiscal 2023.
Notably, in the first-quarter fiscal 2024, the company reorganized its operations into six major business groups –
· Taobao and Tmall
· Alibaba International Digital Commerce
· Local Services
· Cainiao Smart Logistics Network
· Cloud Intelligence, and the
· Digital Media and Entertainment Group.
(2) Siemens: This is a $99 a share Mainland China stock, with a market cap of $157.9B. It is in the Industrial Services industry. The Zacks Value score is B, the Zacks Growth score is F and the Zacks Momentum Score is A.
Siemens AG-ADR is the world's largest supplier of products, systems, solutions and services for industrial automation and building technology.
This business area includes Automation and Drives Industrial Solutions and Services Siemens Dematic Siemens Building Technologies AG.
(3) BYD: This is a $69 a share Mainland China stock, with a market cap of $104B. It is in the Foreign Automotive industry. The Zacks Value score is B, the Zacks Growth score is B and the Zacks Momentum Score is A.
BYD Company Limited is principally engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries and mobile phone components.
Its Automobiles and Related Products segment manufactures and sells automobiles, and auto-related molds and components.
The company researches, develops, manufactures and sells batteries, which are applied on mobile phones, cordless phones, power tools and other kinds of portable electronic devices.
Its rechargeable battery business provides lithium-ion batteries and nickel batteries. BYD's mobile phone components and assembly business segment engages in the manufacture and sale of mobile handset components, such as housings and keypads; and provides assembly services.
It has operations primarily in China, India, Hungary, and Brazil. BYD Company Limited is based in Shenzhen, the People's Republic of China.
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