The Zacks Analyst Blog Highlights Arm, Tokyo Electron and The Progressive
For Immediate Release
Chicago, IL – March 5, 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: Arm Holdings PLC ARM, Tokyo Electron TOELY and The Progressive PGR.
Here are highlights from Monday’s Analyst Blog:
New Non-Farm Payroll Number: Global Week Ahead
In the Global Week Ahead, U.S. jobs data, testimony by the Federal Reserve Chief, a key date in the U.S. election calendar and President Joe Biden's State of the Union address happen.
That's one side of the Atlantic. On the other is an ECB meeting and U.K. budget.
Asia's not missing out, China's annual parliament meeting takes place against a backdrop of pain in the world's No.2 economy.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) On Friday, traders get the latest U.S. nonfarm payroll numbers for FEB.
U.S. earnings season is winding down but investors don't have much down-time with a Congressional testimony from Fed Chairman Jerome Powell on Wednesday and Thursday, and February U.S. jobs data on Friday.
Excitement over AI's business potential has helped drive stocks to fresh record highs, even as a robust economy dampens rate cut bets.
Signs of continued jobs market strength or a hawkish message from the Fed could make it harder for investors to shrug off concerns about how higher-for-longer interest rates could impact markets and the economy.
Among those effects is a rise in Treasury yields — potentially disruptive for stocks if it continues. Ten-year yields are up 40 bps this year.
Economists polled by Reuters expect the U.S. economy created 188,000 new jobs, after a blowout 353,000 jobs in January.
(2) On Thursday, the European Central Bank (ECB) meets.
The ECB meets on Thursday and the focus is on whether policy makers will repeat that it's too early to discuss rate cuts or open the door to a move.
Rates have been on hold since September and the ECB has pushed back on rate cut talk, insisting that even if the next move is a reduction, that will be later than traders anticipate.
Wage pressures, after all, remain high — even if they are easing.
So, having priced 150 bps worth of rate cuts at the start of 2024, markets now expect roughly 90 bps with a first move fully priced for June.
Pricing also suggests the ECB could cut before the Fed does — not surprising perhaps, given a relatively weak Eurozone economy. The ECB typically moves after the Fed.
(3) The Super Tuesday U.S. presidential primary.
It may be too early to properly price and position for November's U.S. Presidential election, but 'Super Tuesday' will shine a light on the political divisions and challenges facing America.
And the debt ceiling issue is back as well. U.S. Congress on Thursday approved a short-term stopgap measure to avert a partial federal government shutdown but only by a week.
The Treasury market absorbed $169 billion of debt issuance this week with relative ease. But polarized politics over the government's finances are a reminder that the national debt is $34 trillion and counting, so Treasuries could feel some heat.
In an election year, however, aggressive fiscal consolidation is unlikely. Muddling through with temporary spending measures is more likely.
Super Tuesday is the day in the U.S. presidential primary cycle when the most states vote, with Biden and Donald Trump expected to secure the Democratic and Republican nominations.
(4) Where do Mainland China’s policies and financial markets go from here?
Hopes are high for fresh China stimulus when the National People's Congress begins its annual session on Tuesday, aimed at reviving a crumbling property sector, and invigorating moribund consumers given the worst deflation since the global financial crisis.
There's a lot more at stake than meeting what will likely be another 5% economic growth target this year.
Chinese stocks, have recovered from five-year lows hit in early February, snapping a six-month losing run with their best monthly performance since late 2022. The main drivers have been state-led stock buying and tighter regulations on short selling.
But it's hard to forget that the slide to five-year lows were driven by dashed hopes for steps from Beijing. That puts the market spotlight firmly on what comes out in the days ahead.
(5) On Wednesday, the latest U.K. budget gets presented.
British finance minister Jeremy Hunt must find a way to cut taxes in Wednesday's budget to help Prime Minister Rishi Sunak's bleak election prospects without causing another upset in the bond markets.
Memories of former premier Liz Truss's "mini-budget" crisis are still fresh and the fiscal outlook has shown no improvement since then, leaving Hunt with little room for maneuver when he stands before parliament on March 6.
But media speculation has focused on possible income tax cuts or another reduction in social security rates, and investors are expecting Hunt to use most, if not all, of the fiscal "headroom" he has.
Zacks #1 Rank (STRONG BUY) Stocks
I highlighted a 2 semi chip stocks and a big P&C insurer on out #1 list this week.
(1) Arm Holdings PLC: This is a $141 stock with a market cap of $145B in the Technology Services industry. I see a Zacks Value score of F, a Zacks Growth score of B and a Zacks Momentum score of D.
Arm Holdings Ltd. provides processor designs and software platforms. Arm Holdings Limited is based in Cambridge, UK.
(2) Tokyo Electron: This is a $124 stock with a market cap of $117B in the Semiconductor Discretes industry. I see a Zacks Value score of F, a Zacks Growth score of B, and a Zacks Momentum score of C.
Tokyo Electron Ltd. is a company mainly engaged in the manufacture and sale of electronic products for industrial uses.
TOELY is the largest manufacturer of IC and FPD production equipment in Japan and the third largest in the world.
The Semiconductor Manufacturing Equipment segment is engaged in the provision of coaters and developers for wafer processing, plasma etching equipment, thermal processing systems and others.
The Flat-panel Display (FPD) Manufacturing Equipment segment is engaged in the provision of coaters and developers for FPD manufacturing, plasma etching/ashing apparatus and others.
The Electronic Component and Information Communication Equipment segment provides semiconductor products such as integrated circuits (ICs), computer and network equipment and software. In addition, the Company is also involved in logistics, facility management and insurance businesses.
(3) The Progressive: This is a $190 stock with a market cap of $111B in the Property and Casualty Insurance industry. I see a Zacks Value score of D, a Zacks Growth score of B, and a Zacks Momentum score of A.
The Progressive Corporation is one of the major auto insurers in the country. Progressive is a leading independent agency writer of private passenger auto coverage, and the market share leader for the motorcycle products since 1998.
Their Personal Lines segment writes insurance for private passenger automobiles, recreational and other vehicles. This business generally offers more than one program in a single state, with each program targeted toward a specific distribution channel, market, or customer group. Personal Lines products comprise insurance for personal autos and special lines products.
Their Commercial Lines segment writes primary liability and physical damage insurance for automobiles and trucks owned by small businesses. The Commercial Lines business, which is primarily distributed through the independent agency channel, operates in the business auto and specialty truck markets.
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