We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the Global Week Ahead, we end with Black Friday.
This is the day after Thanksgiving in the USA, when the shoppers stampede into retail stores to collect holiday shopping bargains.
While U.S. shoppers gear up for Black Friday, traders will scour flash manufacturing PMIs, and the latest Fed minutes, for hints on price pressure influences on downstream policy rates.
Rising geopolitical tensions across central and eastern Europe, and climbing gas-at-the-pump prices, should also keep markets on edge.
And, just how far will New Zealand’s monetary policy rate lift on Wednesday?
Next are Reuters’ five world market themes, reordered for equity traders.
(1) Black Friday for U.S. Retail Is Here
Black Friday kicks off the key holiday shopping period and news has been mostly good for retailers in recent months as a vaccine-fueled U.S. reopening sent shoppers back into stores.
That's been reflected in retailers' shares: The S&P 500 retailing exchange-traded fund (XRT - Free Report) is up 15% this quarter, compared with a 9% gain for the S&P 500. Consumer discretionary earnings growth — including many retailers — has risen to 14.5% from 8% at the start of October, Refinitiv data shows.
But global supply-chain bottlenecks crimping inventories and pushing up prices remain a worry: Walmart (WMT - Free Report) shares tumbled after high labor and supply chain costs ate into margins.
Soaring inflation also has markets worried about consumers tightening their belts. But recent retail sales numbers made for happier reading, showing October sales surging as Americans started shopping early to beat supply shortages.
(2) Flash Manufacturing PMIs for November May Show COVID Effects in Places
The flash November purchasing managers' index (PMI), a key forward looking economic indicator, is due out from a host of major economies in coming days — the United States, Australia, Britain and the Euro area.
Market focus is on what impact price pressures and supply bottlenecks are having on business activity and whether these are abating. Euro area PMIs, which have held up well, could provide a sense of what toll a resurgent COVID-19 is taking.
Germany's Angela Merkel warns the coronavirus situation in the powerhouse economy is dramatic, the Netherlands is in partial lockdown and pressure is mounting on Austria to do more. But vaccine rollouts and the reassuring — and hefty — presence of ECB stimulus ease some of those worries.
(3) The Fed’s November Minutes Out Wednesday
Minutes from the Federal Reserve’s November on Wednesday should provide clues on its take on inflation.
U.S. consumer prices rising at the fastest pace in more than three decades in October and accelerating inflation expectations have lifted expectations that the Fed will need to speed up tapering of asset purchases and hike rates faster-than-expected.
The 5-year and 10-year breakeven rate — the yield spread between inflation protected and normal Treasuries — stand at record highs. More fodder comes from Wednesday's reading of the October personal consumption expenditures (PCE) price index — the Fed’s preferred inflation gauge — expected to rise to 0.4%, according to a Reuters poll.
(4) Tensions with Russia Building
Russia-West ties have been at their frostiest since the Cold War for a while — but could they turn hot? Russia's Vladimir Putin says the West is not heeding “red lines,” warning against deploying NATO infrastructure in Ukraine. Russian troop movements at Ukraine's borders have led NATO to warn it was standing by Kyiv.
Ukrainian bond prices have slumped, Moscow's markets are waking up to fresh risk, Poland and Hungary have seen currencies and stocks fall hard. But much of the conflict is playing out on natural gas markets, where a 350% price surge this year will fan inflation and hurt growth.
Markets are also on alert for tensions flaring around Russia's $11 billion Nordstream 2 pipeline, opposed by the U.S. and Ukraine, supported by Germany. A suspension of its certification saw Russian gas flows to Europe ease, pushing prices back towards 100 euros a megawatt hour.
(5) New Zealand Central Bank Keeps Hiking Rates
The Reserve Bank of New Zealand is expected to move deeper into the vanguard of inflation fighters on Wednesday, and deliver a second rate hike in as many months.
Since October, when the RBNZ joined Norway as developed markets' first hikers, inflation has surged to a decade high and the unemployment rate has sunk to record lows.
Traders are sure rates will go up, and are focused on two hawkish risks: A roughly 40% chance that the hike is a chunky 50 bps one, and the bank lifts its long-term rates outlook.
Either could hoist the kiwi higher, though both bring risks to local borrowers already squeezed by the fastest pace of mortgage rate rises in 15 years.
Top Zacks #1 Rank (STRONG BUY) Stocks
Top Zacks Momentum score stocks are popping up all over the place. Here are three.
(1) Home Depot (HD - Free Report) : This is a $408 a share stock. The market cap is $428B. I see a Zacks Values score of F, a Zacks Growth score of B and a Zacks Momentum score of B.
(2) Airbus Group (EADSY - Free Report) : This is a $31 a share stock. The market cap is $101B. I see a Zacks Value score of D, a Zacks Growth score of D and a Zacks Momentum score of A.
(3) Tyson Foods (TSN - Free Report) : This is a $81 a share stock. The market cap is $30B. I see a Zacks Value score of A, a Zacks Growth score of B, and a Zacks Momentum score of A.
Key Global Macro
On Monday, we got the People’s Bank of China (PBoC) interest rate decision. 3.85% was left unchanged.
U.S. existing home sales for October should be 6.2M. Last month, we saw 6.29M.
On Tuesday, the Euro area Markit manufacturing PMI for November should be 57.2, after a 58.3 print the month prior.
The U.S. Markit manufacturing PMI for November should be 59.0, after a 58.4 print the month prior.
On Wednesday, we get the central bank of New Zealand’s rate decision. 0.75% is the consensus, up from 0.5%.
The 2nd reading for U.S. GDP growth in Q3 should be +2.1%.
We get the FOMC minutes.
On Thursday, it is Thanksgiving Day in the USA.
On Friday, Australia’s retail sales for October should be up +2.5% m/m, after rising +1.3% m/m in September.
Conclusion
Holiday weeks in the USA, like this one, get known as low-volume stock market events.
I wouldn’t take too many share price movements seriously this week.
Enjoy some holiday time with your family.
Warm regards,
John Blank
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Black Friday: Global Week Ahead
In the Global Week Ahead, we end with Black Friday.
This is the day after Thanksgiving in the USA, when the shoppers stampede into retail stores to collect holiday shopping bargains.
While U.S. shoppers gear up for Black Friday, traders will scour flash manufacturing PMIs, and the latest Fed minutes, for hints on price pressure influences on downstream policy rates.
Rising geopolitical tensions across central and eastern Europe, and climbing gas-at-the-pump prices, should also keep markets on edge.
And, just how far will New Zealand’s monetary policy rate lift on Wednesday?
Next are Reuters’ five world market themes, reordered for equity traders.
(1) Black Friday for U.S. Retail Is Here
Black Friday kicks off the key holiday shopping period and news has been mostly good for retailers in recent months as a vaccine-fueled U.S. reopening sent shoppers back into stores.
That's been reflected in retailers' shares: The S&P 500 retailing exchange-traded fund (XRT - Free Report) is up 15% this quarter, compared with a 9% gain for the S&P 500. Consumer discretionary earnings growth — including many retailers — has risen to 14.5% from 8% at the start of October, Refinitiv data shows.
But global supply-chain bottlenecks crimping inventories and pushing up prices remain a worry: Walmart (WMT - Free Report) shares tumbled after high labor and supply chain costs ate into margins.
Soaring inflation also has markets worried about consumers tightening their belts. But recent retail sales numbers made for happier reading, showing October sales surging as Americans started shopping early to beat supply shortages.
(2) Flash Manufacturing PMIs for November May Show COVID Effects in Places
The flash November purchasing managers' index (PMI), a key forward looking economic indicator, is due out from a host of major economies in coming days — the United States, Australia, Britain and the Euro area.
Market focus is on what impact price pressures and supply bottlenecks are having on business activity and whether these are abating. Euro area PMIs, which have held up well, could provide a sense of what toll a resurgent COVID-19 is taking.
Germany's Angela Merkel warns the coronavirus situation in the powerhouse economy is dramatic, the Netherlands is in partial lockdown and pressure is mounting on Austria to do more. But vaccine rollouts and the reassuring — and hefty — presence of ECB stimulus ease some of those worries.
(3) The Fed’s November Minutes Out Wednesday
Minutes from the Federal Reserve’s November on Wednesday should provide clues on its take on inflation.
U.S. consumer prices rising at the fastest pace in more than three decades in October and accelerating inflation expectations have lifted expectations that the Fed will need to speed up tapering of asset purchases and hike rates faster-than-expected.
The 5-year and 10-year breakeven rate — the yield spread between inflation protected and normal Treasuries — stand at record highs. More fodder comes from Wednesday's reading of the October personal consumption expenditures (PCE) price index — the Fed’s preferred inflation gauge — expected to rise to 0.4%, according to a Reuters poll.
(4) Tensions with Russia Building
Russia-West ties have been at their frostiest since the Cold War for a while — but could they turn hot? Russia's Vladimir Putin says the West is not heeding “red lines,” warning against deploying NATO infrastructure in Ukraine. Russian troop movements at Ukraine's borders have led NATO to warn it was standing by Kyiv.
Ukrainian bond prices have slumped, Moscow's markets are waking up to fresh risk, Poland and Hungary have seen currencies and stocks fall hard. But much of the conflict is playing out on natural gas markets, where a 350% price surge this year will fan inflation and hurt growth.
Markets are also on alert for tensions flaring around Russia's $11 billion Nordstream 2 pipeline, opposed by the U.S. and Ukraine, supported by Germany. A suspension of its certification saw Russian gas flows to Europe ease, pushing prices back towards 100 euros a megawatt hour.
(5) New Zealand Central Bank Keeps Hiking Rates
The Reserve Bank of New Zealand is expected to move deeper into the vanguard of inflation fighters on Wednesday, and deliver a second rate hike in as many months.
Since October, when the RBNZ joined Norway as developed markets' first hikers, inflation has surged to a decade high and the unemployment rate has sunk to record lows.
Traders are sure rates will go up, and are focused on two hawkish risks: A roughly 40% chance that the hike is a chunky 50 bps one, and the bank lifts its long-term rates outlook.
Either could hoist the kiwi higher, though both bring risks to local borrowers already squeezed by the fastest pace of mortgage rate rises in 15 years.
Top Zacks #1 Rank (STRONG BUY) Stocks
Top Zacks Momentum score stocks are popping up all over the place. Here are three.
(1) Home Depot (HD - Free Report) : This is a $408 a share stock. The market cap is $428B. I see a Zacks Values score of F, a Zacks Growth score of B and a Zacks Momentum score of B.
(2) Airbus Group (EADSY - Free Report) : This is a $31 a share stock. The market cap is $101B. I see a Zacks Value score of D, a Zacks Growth score of D and a Zacks Momentum score of A.
(3) Tyson Foods (TSN - Free Report) : This is a $81 a share stock. The market cap is $30B. I see a Zacks Value score of A, a Zacks Growth score of B, and a Zacks Momentum score of A.
Key Global Macro
On Monday, we got the People’s Bank of China (PBoC) interest rate decision. 3.85% was left unchanged.
U.S. existing home sales for October should be 6.2M. Last month, we saw 6.29M.
On Tuesday, the Euro area Markit manufacturing PMI for November should be 57.2, after a 58.3 print the month prior.
The U.S. Markit manufacturing PMI for November should be 59.0, after a 58.4 print the month prior.
On Wednesday, we get the central bank of New Zealand’s rate decision. 0.75% is the consensus, up from 0.5%.
The 2nd reading for U.S. GDP growth in Q3 should be +2.1%.
We get the FOMC minutes.
On Thursday, it is Thanksgiving Day in the USA.
On Friday, Australia’s retail sales for October should be up +2.5% m/m, after rising +1.3% m/m in September.
Conclusion
Holiday weeks in the USA, like this one, get known as low-volume stock market events.
I wouldn’t take too many share price movements seriously this week.
Enjoy some holiday time with your family.
Warm regards,
John Blank