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The Zacks Analyst Blog Highlights: Walmart, Home Depot, Target and Nvidia
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For Immediate Release
Chicago, IL – August 17, 2021 – 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: Walmart Inc. (WMT - Free Report) , The Home Depot, Inc. (HD - Free Report) , Target Corporation (TGT - Free Report) and NVIDIA Corporation (NVDA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Color from the Retailers: Global Week Ahead
In the Global Week Ahead, prominent U.S. retailer companies report Q2 results. This includes Walmart before the market opens (BMO) on Tuesday, Aug. 17th, Home Depot BMO on Aug. 17th and Target BMO on Wednesday, Aug. 18th.
Influential chip darling Nvidia also reports AMC on Wednesday, Aug. 18th.
Zacks has seen Q2 results from 477 S&P 500 members or 95.4% of the index’s total membership.
Regular readers of our earnings discussions know this. We have been very impressed with the all-around strength and momentum in the Q2 earnings season.
According to Zacks Research Director Sheraz Mian—
The first notable feature of the Q2 earnings season is the impressive momentum on the revenue side, both in terms of growth rate, as well as the beats percentages.
For the 458 S&P 500 companies that had reported Q2 results through Friday, August 13th, earnings and revenues were up +102.9% and +27.6%, respectively. The proportion of these companies beating consensus EPS and revenue estimates came in at 86.7% each. The proportion of these 458 companies beating both EPS and revenue estimates, the so-called ‘blended’ beats percentage, is at 79.4%.
These are impressive numbers any way you look at them, but the momentum on the revenue side is particularly notable.
The second notable feature of the Q2 earnings season relates to the magnitude of corporate profitability. The Q2 earnings growth rate has undoubtedly benefited from easy comparisons to the year-earlier period which was hit hard by the pandemic related lockdowns. But it isn’t only easy comparisons, corporate profitability really is very high even though a number of sectors still have some ways to go before getting back to pre-Covid profitability levels.
The third notable feature of the Q2 earnings season pertains to the revisions trend for 2021 third quarter earnings estimates. Total S&P 500 earnings in Q3 are expected to be up +26.2% on +13.3% higher revenues. The chart below shows Q3 estimates have evolved since the start of the year.
Next are Reuters’ five events and themes likely to dominate global financial markets in the Global Week Ahead. They are reordered for equity traders.
(1) Major U.S. Retailers Report Q2 Earnings Results
The U.S. economy is growing robustly and the labor market is rebounding. However, COVID-19 remains a headwind and the coming days should bring a fresh perspective on how consumers are faring.
U.S. retail sales likely fell 0.2% in July, after an unexpected rise in June, data on Tuesday is expected to show.
These come at the end of a stellar U.S. second-quarter results season. S&P 500 earnings are expected to have jumped 93.1%, well above prior expectations of 65.4%, according to Refinitiv IBES.
Fed policymakers, assessing when to start unwinding stimulus, will be watching.
(2) The Delta COVID Variant Spreading in Asia
The Delta variant is close to breaching Asia's COVID-zero fortresses, with outbreaks and lockdowns looming over what once appeared the world's most promising regional rebound.
Save for Taiwan and New Zealand, where strict border controls appear to have kept the variant at bay, cities from Sydney to Seoul are finding it hard to contain infections.
In China, Delta has been detected in over a dozen cities, bearing down on a faltering economy, forcing economists to cut growth forecasts.
We will get a snapshot of how the economy fared in July as local activity and flight curbs a bit - retail sales, industrial output and house price numbers are all due on Monday.
(3) Climate Change Seen Behind Weather Events Around the Globe
If this summer has shown us anything, it's a glimpse of the sort of havoc the planet faces if the climate emergency is not fixed fast.
Apocalyptic forest fires, floods and drought are laying waste to swathes of Greece, Canada, Turkey, China, Argentina and the United States. Extreme weather consequences include deaths, homelessness, social unrest and rising government debt.
The climate emergency will raise costs everywhere: insurance covers just 60% of disaster-linked losses even in rich North America; it falls to 10% in China, Swiss Re estimates. Worse still, the fires are exacerbating emissions, while forests meant to act as carbon sinks will take decades to regrow.
Until now, warnings, including a recent United Nations one, have had limited impact. But with a global climate conference due in November, this summer's climate disasters might well swing the pendulum.
(4) Afghanistan Going to the Taliban
The Taliban's rapid advance towards Kabul has sounded alarms not only about Afghanistan's future but also the wider spillover in what is already a dangerous neighborhood.
Iran to the west, the central Asian republics of Tajikistan, Turkmenistan and Uzbekistan to the north may be at risk, but for markets, Pakistan to the east will be the immediate focus.
Pakistan has lots of debt and a sizable equity market. It also depends on a $6 billion IMF program. The prospect of years of Taliban violence and mass waves of Afghan refugees will add to the struggle to repair its finances.
(5) New Zealand’s Central Bank Set to Hike Rates
New Zealand's central bank meets on Wednesday and looks set to become the first major economy to lift interest rates since COVID-19 hit.
Super-strong jobs data have cemented expectations of a hike, which would be New Zealand's first since mid-2014. What a contrast with 2020, when rates were slashed 75 bps to 0.25% and a move below zero became a real possibility.
Norway's central bank, meeting on Thursday meanwhile, could reiterate it will increase rates in September.
Investors, focused on prospects for Fed tapering as labor conditions improve, have boosted the dollar. New Zealand and Norway are a reminder that the greenback is not the only currency standing to benefit from the monetary policy shift under way in the G10.
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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The Zacks Analyst Blog Highlights: Walmart, Home Depot, Target and Nvidia
For Immediate Release
Chicago, IL – August 17, 2021 – 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: Walmart Inc. (WMT - Free Report) , The Home Depot, Inc. (HD - Free Report) , Target Corporation (TGT - Free Report) and NVIDIA Corporation (NVDA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Color from the Retailers: Global Week Ahead
In the Global Week Ahead, prominent U.S. retailer companies report Q2 results. This includes Walmart before the market opens (BMO) on Tuesday, Aug. 17th, Home Depot BMO on Aug. 17th and Target BMO on Wednesday, Aug. 18th.
Influential chip darling Nvidia also reports AMC on Wednesday, Aug. 18th.
Zacks has seen Q2 results from 477 S&P 500 members or 95.4% of the index’s total membership.
Regular readers of our earnings discussions know this. We have been very impressed with the all-around strength and momentum in the Q2 earnings season.
According to Zacks Research Director Sheraz Mian—
The first notable feature of the Q2 earnings season is the impressive momentum on the revenue side, both in terms of growth rate, as well as the beats percentages.
For the 458 S&P 500 companies that had reported Q2 results through Friday, August 13th, earnings and revenues were up +102.9% and +27.6%, respectively. The proportion of these companies beating consensus EPS and revenue estimates came in at 86.7% each. The proportion of these 458 companies beating both EPS and revenue estimates, the so-called ‘blended’ beats percentage, is at 79.4%.
These are impressive numbers any way you look at them, but the momentum on the revenue side is particularly notable.
The second notable feature of the Q2 earnings season relates to the magnitude of corporate profitability. The Q2 earnings growth rate has undoubtedly benefited from easy comparisons to the year-earlier period which was hit hard by the pandemic related lockdowns. But it isn’t only easy comparisons, corporate profitability really is very high even though a number of sectors still have some ways to go before getting back to pre-Covid profitability levels.
The third notable feature of the Q2 earnings season pertains to the revisions trend for 2021 third quarter earnings estimates. Total S&P 500 earnings in Q3 are expected to be up +26.2% on +13.3% higher revenues. The chart below shows Q3 estimates have evolved since the start of the year.
Next are Reuters’ five events and themes likely to dominate global financial markets in the Global Week Ahead. They are reordered for equity traders.
(1) Major U.S. Retailers Report Q2 Earnings Results
The U.S. economy is growing robustly and the labor market is rebounding. However, COVID-19 remains a headwind and the coming days should bring a fresh perspective on how consumers are faring.
U.S. retail sales likely fell 0.2% in July, after an unexpected rise in June, data on Tuesday is expected to show.
These come at the end of a stellar U.S. second-quarter results season. S&P 500 earnings are expected to have jumped 93.1%, well above prior expectations of 65.4%, according to Refinitiv IBES.
Fed policymakers, assessing when to start unwinding stimulus, will be watching.
(2) The Delta COVID Variant Spreading in Asia
The Delta variant is close to breaching Asia's COVID-zero fortresses, with outbreaks and lockdowns looming over what once appeared the world's most promising regional rebound.
Save for Taiwan and New Zealand, where strict border controls appear to have kept the variant at bay, cities from Sydney to Seoul are finding it hard to contain infections.
In China, Delta has been detected in over a dozen cities, bearing down on a faltering economy, forcing economists to cut growth forecasts.
We will get a snapshot of how the economy fared in July as local activity and flight curbs a bit - retail sales, industrial output and house price numbers are all due on Monday.
(3) Climate Change Seen Behind Weather Events Around the Globe
If this summer has shown us anything, it's a glimpse of the sort of havoc the planet faces if the climate emergency is not fixed fast.
Apocalyptic forest fires, floods and drought are laying waste to swathes of Greece, Canada, Turkey, China, Argentina and the United States. Extreme weather consequences include deaths, homelessness, social unrest and rising government debt.
The climate emergency will raise costs everywhere: insurance covers just 60% of disaster-linked losses even in rich North America; it falls to 10% in China, Swiss Re estimates. Worse still, the fires are exacerbating emissions, while forests meant to act as carbon sinks will take decades to regrow.
Until now, warnings, including a recent United Nations one, have had limited impact. But with a global climate conference due in November, this summer's climate disasters might well swing the pendulum.
(4) Afghanistan Going to the Taliban
The Taliban's rapid advance towards Kabul has sounded alarms not only about Afghanistan's future but also the wider spillover in what is already a dangerous neighborhood.
Iran to the west, the central Asian republics of Tajikistan, Turkmenistan and Uzbekistan to the north may be at risk, but for markets, Pakistan to the east will be the immediate focus.
Pakistan has lots of debt and a sizable equity market. It also depends on a $6 billion IMF program. The prospect of years of Taliban violence and mass waves of Afghan refugees will add to the struggle to repair its finances.
(5) New Zealand’s Central Bank Set to Hike Rates
New Zealand's central bank meets on Wednesday and looks set to become the first major economy to lift interest rates since COVID-19 hit.
Super-strong jobs data have cemented expectations of a hike, which would be New Zealand's first since mid-2014. What a contrast with 2020, when rates were slashed 75 bps to 0.25% and a move below zero became a real possibility.
Norway's central bank, meeting on Thursday meanwhile, could reiterate it will increase rates in September.
Investors, focused on prospects for Fed tapering as labor conditions improve, have boosted the dollar. New Zealand and Norway are a reminder that the greenback is not the only currency standing to benefit from the monetary policy shift under way in the G10.
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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.