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The Zacks Analyst Blog Highlights: AngloGold Ashanti, SPDR Gold Shares, Black Hills, NexPoint Residential Trust and American River Bankshares

Zacks Equity Research

For Immediate Release

Chicago, IL – June 21, 2019 – 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: AngloGold Ashanti Ltd. AU, SPDR Gold Shares GLD, Black Hills Corp. BKH, NexPoint Residential Trust Inc. NXRT and American River Bankshares AMRB.

Here are highlights from Thursday’s Analyst Blog:

Stocks from Winning & Losing Sectors, Post-Fed Meeting

As widely expected, the Fed stayed put in the latest meeting and hinted at rate cuts this year. The central bank will now “closely monitor the implications of incoming information for the economic outlook.” Though the Fed acknowledged about the economic wellbeing, it addressed that “uncertainties about this outlook have increased.” 

More Fed members are now foreseeing a rate cut by next year. Nine members see the possibility of up to two rate cuts in the same frame of time. With inflation expectations tapering off, we expect some policy easing this year.

Inside Economic Forecast

The Fed upgraded its forecast for 2020 real GDP growth from 1.9% in March to 2.0% but maintained the 2019 and 2021 growth forecasts at 2.1% and 1.8%, respectively. The Fed projected the longer-run growth measure of 1.9%. Unemployment was guided down to 3.6% from 3.7% for 2019, 3.7% from 3.8% for 2020 and 3.8% from 3.9% for 2021.

PCE inflation expectations were cut from 1.8% to 1.5% for 2019 and from 2.0% to 1.9% for 2020, but were kept intact at 2.0% for 2021. Federal funds rate projections for 2019 were kept maintained at 2.4% but lowered to 2.1% from 2.6% for 2020 and to 2.4% from 2.6% for 2021. Over the longer term, the rate is projected at 2.9%, same was cut to 2.5% from 2.8% projected in March.

Market Reaction

The immediate impact should be felt in the bond market and the yield on 10-year U.S. Treasury dropped to 2.03% from 2.06% recorded the day earlier. As the policy easing move is largely expected, yield on short-term two-year bond yields fell a steeper 12 bps to 1.74%. 

Against this backdrop, we highlight a few sectors that could gain/lose from Fed activity and guidance.

Winning Sectors

Gold Miner– AngloGold Ashanti Ltd. – Up 2% on Jun 19

If rates dive, the greenback loses strength and gold starts gaining. Gold bullion ETF SPDR Gold Shares was up 0.6% on Jun 19. Gold mining also stocks surged as these act as a leveraged play of the underlying asset. AngloGold Ashanti Limited has a Zacks Rank #1 (Strong Buy).

Utilities– Black Hills Corp. – Up 1.7%

This sector performs well in a low-rate environment and serves better if investing sentiments are a bit edgy.

Black Hills Corporation is an energy company that generates wholesale electricity and produces natural gas, crude oil and coal. The stock has a Zacks Rank #2 (Buy) and yields 2.58% annually.

Real-Estate– NexPoint Residential Trust Inc. – Up 0.5%

This is another sector investors can lay a wager on. This high-yielding sector performs well in a low-rate environment.

The company is engaged in acquiring, owning, operating and selectively developing multifamily properties. It operates primarily in Southeastern United States and Texas. It yields 2.74% annually.

Losing Sectors

Financials – American River Bankshares – Down 1.5%

Sectors that flourish in a rising rate environment skid post the Fed meeting. 

AMRB is one of them. American River Bankshares is the parent company of American River Bank, a regional bank in Northern California. It has a Zacks Rank #5 (Strong Sell).

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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.

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Black Hills Corporation (BKH) : Free Stock Analysis Report
American River Bankshares (AMRB) : Free Stock Analysis Report
SPDR Gold Shares (GLD): ETF Research Reports
AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
NexPoint Residential Trust, Inc. (NXRT) : Free Stock Analysis Report
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