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The Zacks Analyst Blog Highlights: Interactive Brokers, Etsy and Penumbra

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·7 min read
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For Immediate Release

Chicago, IL – March 30, 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: Interactive Brokers Group, Inc. IBKR, Etsy, Inc. ETSY and Penumbra, Inc. PEN.

Here are highlights from Monday’s Analyst Blog:

Strong U.S. Housing Demand: Global Week Ahead

In the Global Week Ahead, pay attention to U.S. housing market data.

On Tuesday, we get the latest U.S. Case-Shiller Home Price Index (HPI). Very strong +10.7% y/y annual home price appreciation. That is what to expect.

My thoughts on double-digit annual home price appreciation? It’s a sure sign.

Of strong overall U.S. housing demand.

On Wednesday, March 31st, the National Association of Realtors (NAR) will release its Pending Home Sales Index (PHSI) for February 2021.

The PHSI analyzes data on homes where the contract is signed, but not yet closed and is based on signed real estate contracts for existing single-family homes, condos, and co-ops.
 

·        - NAR’s PHSI is a key indicator of trends in the market

·        - NAR’s PHSI dropped 2.8% to 122.8 in January, and year-over-year, contract signings rose +13%

·        - An index of 100 is equal to the level of contract activity in 2001
 

"Pending home sales fell in January because there are simply not enough homes to match the demand on the market," said Lawrence Yun, NAR's Chief Economist.

"That said, there has been an increase in permits and requests to build new homes."

As outlined by Yun, tight inventory resulted in a drop in sales, thus setting the table for heated bidding wars nationwide.

Next are Reuters’ five world market themes, reordered for equity traders—

(1) The First Quarter of 2021 Ends

A new U.S. president, the selection of the candidate who might be Germany’s next leader, a $1.7 trillion rise in the value of global equities, amateur traders taking on seasoned hedge funds and digital art selling for millions of dollars.

It’s been an eventful quarter. Brent crude and copper are top performers, with respective gains of around 20% and 15%; the commodity-heavy FTSE stocks index is up 4%. Wall Street’s 2020 winners, the FAANG stocks, are barely in the black.

Bonds, hurt by reflation, bring up the rear. U.S. and German government bonds have lost 5%-6%; emerging currency debt holders are down 6.5%.

Yet even with almost half a billion vaccine doses administered globally, markets are ending March with a whimper. That’s because of renewed China-U.S. tensions, higher bond yields, a COVID-19 resurgence and a massive tanker stranded in the Suez Canal that may deal a blow to world trade. The coming quarter will be interesting too.

(2) On Thursday, OPEC+ meets

Oil producers’ group OPEC and its allies convene on Thursday, and for now, they are expected to stick with production cuts agreed at the last meeting.

Renewed lockdowns and rising coronavirus caseloads have pushed Brent crude off recent highs above $71. But the 400-meter container ship aground in the Suez Canal could well cause a supply squeeze if tug boats trying to free it fail to do so in coming days.

As of now, OPEC+ supply curbs of about 7 million barrels per day, plus Saudi Arabia’s additional one million bpd cut, should remain in place.

The United Arab Emirates’ energy minister says OPEC+ is unlikely to pump more oil than markets can handle. Another reason for caution is rising Iranian oil exports, which have also weighed on prices.

(3) On Friday, U.S. Nonfarm Payrolls for March are out. U.S. markets are closed

Friday’s U.S. jobs data will show whether the labor market is getting stronger.

In February, the economy created a forecast-beating 379,000 jobs as a decline in new infections and additional pandemic relief boosted hiring. Analysts expect 500,000 jobs were created in March, the largest monthly gain in five months.

The number of Americans filing new claims for unemployment benefits hit a one-year low last week — a powerful boost to an economy on the verge of stronger growth thanks to a $1.9 trillion stimulus package and rapid vaccine rollout.

(4) On Monday, the FTSE Russell World Government Bond Index should finalize

Index provider FTSE Russell should give the final sign-off on including Chinese government bonds (CGBs) in its World Government Bond Index on Monday.

This is likely a formality in a long-flagged move that Beijing will surely welcome as a seal of approval.

Still, it comes at a sensitive time as authorities seek to ease capital inflows behind a soaring yuan. Foreign investors now own over 10% of CGBs and Chinese regulators are worried about foreign market bubbles.

They may get help from overseas. China-U.S. bond yield spreads have shrunk as hefty stimulus turbocharges the U.S. recovery. That’s dimmed the appeal of CGBs, leading to net outflows recently.

(5) Starting Monday, April 5th, the IMF and World Bank virtual Spring meetings

IMF and World Bank online spring meetings get under way on April 5th and will likely be dominated by efforts to help poorer countries with a new wad of Special Drawing Rights, the IMF’s sort-of currency.

IMF chief Kristalina Georgieva’s plan is for an increase equivalent to $650 billion, about the maximum the United States can support without Congressional approval.

The move could more than double Zambia’s currency reserves and increase Zimbabwe’s more than six-fold. Pakistan, Ethiopia and Turkey would get double-digit increases too, analysts estimate.

The allocation wouldn’t get formally approved until June but the meetings may debate the possibility of richer countries donating or lending their share of the new money to the developing world, which needs it to pay for vaccines.

Top Zacks #1 Rank (STRONG BUY) Stocks

With selling/shorting of high-flyers, I wanted to put together a list of top-ranked stocks with Zacks Value scores of F.

(1) Interactive Brokers: For this automated trade executor in securities, commodities and FX, shares price at $74 making for a market cap of $30.8B. I see a Zacks Value score of F, a Zacks Growth score of D and a Zacks Momentum score of A.

(2) Etsy: For this online and offline marketplace, shares price at $196, making for a market cap of $24.7B. I see a Zacks Value score of F, a Zacks Growth score of A, and a Zacks Momentum score of A.

(3) Penumbra: For this neuro and vascular medical device company, shares price at $270, making for a market cap of $9.9B. I see a Zacks Value score of F, a Zacks Growth score of D, and a Zacks Momentum score of D.

Very different industries, but the same worry: the stocks are overvalued. Take a look at any of the individual share price charts. You will get heartburn.

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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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