European Equities: A Quiet Economic Calendar to Test Support Further

Economic Calendar

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

It was a particularly bearish start to the week for the European majors on Monday.

The DAX30 slid by 2.31% to lead the way down, with the CAC40 and the EuroStoxx600 seeing losses of 1.74% and 1.67% respectively.

Economic data on the day was limited to wholesale inflation figures from Germany, which had a muted impact on the majors.

The lack of stats left the markets with little to avert attention away from Wednesday’s FOMC policy decision and projections.

Following Friday’s pullback, dip buyers remained on the sidelines, with FED policy uncertainty testing support for the majors.

Adding to the market angst on the day was the Evergrande crisis, which sparked contagion fears across the global financial markets.

The Stats

It’s a was a quiet day on the Eurozone economic calendar. In August, Germany’s annual wholesale rate of inflation picked up from 10.4% to 12.0%. Economists had forecast an uptick to 11.4%. Month-on-month, Germany’s producer price index rose by 1.5%, following a 1.9% increase in July. Economists had forecast a more modest 0.8% increase.

From the U.S

It was also a particularly quiet day on the economic calendar, with no major stats for the markets to consider.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Monday. Continental tumbled by 5.59% to lead the way down, with Volkswagen sliding by 3.89%. BMW and Daimler weren’t far off, however, with losses of 2.73% and 2.68% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank slumped by 7.67% and by 7.92% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen and BNP Paribas slid by 5.70% and by 4.46% respectively, with Credit Agricole falling by 3.86%.

It was also a bearish day for the French auto sector. Stellantis NV slid by 4.47%, with Renault falling by 2.19%.

Air France-KLM bucked the trend, rallying by 5.31%, while Airbus SE slipped by 0.97%.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Monday.

Following an 11.34% jump on Friday, the VIX surged by 23.55% to end the day at 25.71.

On Monday, the NASDAQ slid by 2.19%, with the Dow and S&P500 ending the day down by 1.78% and by 1.70% respectively.

VIX 210921 Daily Chart

The Day Ahead

It’s another particularly quiet day ahead on the Eurozone’s economic calendar.

There are no major stats to provide the European majors with direction at the start of the week.

From the U.S there are also no major stats to consider later in the session, leaving the markets in limbo ahead of Wednesday’s FOMC.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 4 points.

For a look at all of today’s economic events, check out our economic calendar.

Preview: What to Expect From Nike’s Q1 Earnings on Thursday

The world’s largest athletic footwear and apparel seller Nike is expected to report its fiscal first-quarter earnings of $1.12 per share, which represents year-over-year growth of about 18%, up from $0.95 per share seen in the same period a year ago.

The Beaverton, Oregon-based footwear retailer would post year-over-year revenue growth of over 18% to $12.6 billion. In the last four quarters, on average, Nike has beaten earnings estimates over 55%.

According to ZACKS Research, for fiscal 2022, the company expects to grow revenues in the low-double digits, surpassing $50 billion because of strong customer demand across its segments.

The company expects revenue growth in the first half of fiscal 2022 to be higher than in the second half. The foreign exchange rate is expected to be a tailwind in fiscal 2022, generating 70 basis points of gains, ZACKS Research added.

Nike shares surged over 10% so far this year but the stock closed 0.75% lower at $156.42 on Friday.

Analyst Comments

“Investors are focused on the Vietnam factory closures impact on FY revenue guidance. Our analysis & mgmt. guidance conservatism suggests minimal risk. But high valuation requires beat & raise quarters – stock price pullback possible & we’re buyers on any weakness. Reiterate Overweight; raise price target to $221,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

Nike (NKE) trades at the high end of its historical valuation range, & investors expect quarterly beats & guidance raises. Unchanged or lowered FY guidance on temporary, Vietnam-driven headwinds could result in a stock pullback. We would be buyers on any potential weakness.”

Nike Stock Price Forecast

Twenty-five analysts who offered stock ratings for Nike in the last three months forecast the average price in 12 months of $187.26 with a high forecast of $221.00 and a low forecast of $168.00.

The average price target represents a 19.72% change from the last price of $156.42. From those 25 analysts, 21 rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $221 with a high of $410 under a bull scenario and $127 under the worst-case scenario. The firm gave an “Overweight” rating on the footwear and apparel seller’s stock.

Several other analysts have also updated their stock outlook. Cowen and company raised the target price to $196 from $181. Oppenheimer upped the price target to $195 from $150. HSBC lifted the target price to $205 from $162.

“Disruption from COVID-19, supply chain pressure and China continue to escalate. Our contacts across the global supply chain suggest Vietnam could reopen by October. Port congestion and freight headwinds could ease into 2H 2022 and the sector’s 10% valuation correction has improved risk/reward,” noted John Kernan, equity analyst at Cowen.

“We are cutting our FY22 Nike sales estimate by 300bps to 9% growth with a robust recovery into FY23.”

Check out FX Empire’s earnings calendar

European Equities: A Quiet Economic Calendar Leaves the FED Monetary Policy in Focus

Economic Calendar

Monday, 20th September

German PPI m/m (Aug)

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

It was a bearish end to the week for the European majors on Friday.

The DAX30 slid by 1.03% to lead the way down, with the CAC40 and the EuroStoxx600 seeing losses of 0.79% and 0.88% respectively.

Economic data from the Eurozone was on the lighter side, leaving the markets to look ahead to this week’s FOMC meet.

Uncertainty ahead of the FOMC economic projections and monetary policy outlook weighed on the majors.

Later in the session, talk of an increase in U.S corporate tax weighed on the U.S majors, adding further pressure on the European markets.

The Stats

It’s a was a quiet day on the Eurozone economic calendar. Finalized August inflation figures for the Eurozone were in focus early in the European session.

In August, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0%, which was in line with prelim figures.

The core annual rate of inflation held steady at 1.6%, which was also in line with prelim figures.

From the U.S

It was also a relatively quiet day on the economic calendar, with consumer sentiment figures in focus.

In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0 versus a forecasted 72.0. The Consumer Expectations climbed from 65.1 to 67.1, according to prelim figures.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. BMW and Volkswagen slid by a 2.48% and by 2.75% respectively, with Daimler falling by 1.42%. Continental bucked the trend following Thursday’s sell-off, however, rising by 1.07%.

It was also a mixed day for the banks. Deutsche Bank fell by 0.23%, while Commerzbank ended the day up by 1.17%.

From the CAC, it was a bearish day for the banks. Soc Gen and BNP Paribas fell by 1.12% and by 1.14% respectively. Credit Agricole led the way down, however, with a 1.77% loss.

It was also a bearish day for the French auto sector. Stellantis NV slid by 3.45%, with Renault falling by 1.20%.

Air France-KLM ended the day up by a further 1.79%, supported by UK travel easing plans, while Airbus SE fell by 1.60%.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Friday.

Following a 2.81% gain on Thursday, the VIX jumped by 11.34% to end the day at 20.81.

On Friday, the Dow fell by 0.48%, with the NASDAQ and S&P500 both ending the day down by 0.91% respectively.

VIX 200921 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar.

There are no major stats to provide the European majors with direction at the start of the week. German wholesale inflation figures are due out but should have a muted impact on the majors.

With no stats from the U.S to consider later in the session, caution ahead of Wednesday’s FOMC will likely peg the majors back.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 101 points.

For a look at all of today’s economic events, check out our economic calendar.

Earnings Week Ahead: Lennar, Autozone, FedEx, Nike and Costco Wholesale in Focus

Earnings Calendar For The Week Of September 20

Monday (September 20)

IN THE SPOTLIGHT: LENNAR

Lennar Corp, a home construction and real estate company, is expected to report earnings per share of $3.27 in the fiscal third quarter, which represents year-over-year growth of over 54% from $2.12 per share seen in the same period a year ago.

The Miami, Florida-based company would post year-over-year revenue growth of nearly 24% to around $7.3 billion. For four quarters in a row, the company has exceeded expectations on earnings per share.

“Shares of Lennar have outperformed the industry so far this year. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, which in turn resulted in higher operating leverage. Higher demand for new homes backed by declining mortgage rates and low inventory levels bodes well. Focus on the lighter land strategy to boost free cash flow will bolster the balance sheet and thereby drive returns,” noted Analysts at ZACKS Research.

“Moreover, it has provided strong fiscal Q3 homebuilding gross margin guidance, suggesting 420 basis points (bps) increase at mid-point. Also, it has lifted average selling price and margin expectation for fiscal 2021, indicating 6% and 400bps year-over-year growth. However, higher land, labor and material costs are concerning. This may exert pressure on the company’s upcoming quarters as well.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 20

Ticker Company EPS Forecast
LEN Lennar $3.27
HRB H&R Block -$0.34

 

Tuesday (September 21)

IN THE SPOTLIGHT: AUTOZONE, FEDEX

AUTOZONE: The Memphis, Tennessee-based auto parts retailer is expected to report its fiscal fourth-quarter earnings of $29.71 per share, which represents a year-over-year decline of about 4% from $30.93 per share seen in the same period a year ago.

Autozone (AZO) is our top pick in DIY Auto. We see it as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales). In addition, its DIFM growth was accelerating pre-COVID and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term. These advantages seem priced in currently.”

FEDEX: The Memphis, Tennessee-based multinational delivery services company is expected to report its fiscal first-quarter earnings of $5.00 per share, which represents year-over-year growth of about 3% from $4.87 per share seen in the same period a year ago.

The delivery firm would post revenue growth of about 13% to $21.8 billion. In the last four quarters, on average, FedEx has beaten earnings estimates over 28%.

“August quarter remained strong, although we are seeing some delays in shipments, which we expect management to address,” noted Helane Becker, equity analyst at Cowen.

“We are approaching the peak shipping season and expect to see ~50K new hires to handle what is likely to be record demand. Looking ahead, FedEx (FDX) should finally finish the TNT integration; European operations should show that.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 21

Ticker Company EPS Forecast
AZO AutoZone $29.71
FDX FedEx $4.94
ADBE Adobe Systems $3.01
KGF Kingfisher £12.20
CBRL Cracker Barrel Old Country Store $2.33
NEOG Neogen $0.16

 

Wednesday (September 22)

Ticker Company EPS Forecast
KBH Kb Home $1.61
FUL HB Fuller $0.79
BBBY Bed Bath & Beyond Inc. $0.52
UNFI United Natural Foods $0.80
GIS General Mills $0.89

 

Thursday (September 23)

IN THE SPOTLIGHT: NIKE, COSTCO WHOLESALE

NIKE: The world’s largest athletic footwear and apparel seller is expected to report its fiscal first-quarter earnings of $1.12 per share, which represents year-over-year growth of about 18%, up from $0.95 per share seen in the same period a year ago.

The Beaverton, Oregon-based footwear retailer would post year-over-year revenue growth of over 18% to $12.6 billion.

“Investors are focused on the Vietnam factory closures impact on FY revenue guidance. Our analysis & mgmt guidance conservatism suggests minimal risk. But high valuation requires beat & raise quarters – stock price pullback possible & we’re buyers on any weakness. Reiterate Overweight; raise price target to $221,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

Nike (NKE) trades at the high end of its historical valuation range, & investors expect quarterly beats & guidance raises. Unchanged or lowered FY guidance on temporary, Vietnam-driven headwinds could result in a stock pullback. We would be buyers on any potential weakness.”

COSTCO WHOLESALE: The world’s fifth-largest retailer is expected to report its fiscal fourth-quarter earnings of $3.56 per share, which represents year-over-year growth of over 1.4% from $3.51 per share seen in the same period a year ago. The Fridley, Minnesota-based medical company would post revenue growth of about 18% to around $63 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 23

Ticker Company EPS Forecast
ACN Accenture $2.18
DRI Darden Restaurants $1.64
NKE Nike $1.12
COST Costco Wholesale $3.56
MTN Vail Resorts -$3.46
PRGS Progress Software $0.82

 

Friday (September 24)

Ticker Company EPS Forecast
CCL Carnival -$1.43
CUK Carnival -$1.45
CCL Carnival -£1.45

 

European Equities: A Week in Review – 17/09/21

The Majors

It was another bearish week for the majors in the week ending 17th September. The CAC40 led the way down, falling by 1.40%, with the DAX30 and the EuroStoxx600 seeing losses of 0.77% and 0.96% respectively.

Economic data for the Eurozone failed to support the majors, in spite of the stats being skewed to the positive.

Mid-week, disappointing economic data from China fueled market concerns over the economic outlook.

Industrial production in China was up by 5.3%, year-on-year, in August versus a forecasted 5.8% increase. In July, production had been up by 6.4%.

Fixed asset investment was up 8.9% versus a forecasted 9.0%. In July, fixed asset investments had been up 10.3%.

While the numbers from China raised yet more red flags, economic data from the U.S impressed, raising policy uncertainty.

Market jitters ahead of next week’s FOMC policy decision and projections delivered the losses for the DAX30 at the end of the week.

The Stats

Economic data wage growth, industrial production, trade, and finalized inflation figures for the Eurozone.

Finalized inflation figures for Spain, France, and Italy were also out but had a muted impact on the majors.

In the 2nd quarter, wage fell by 0.4%, year-on-year, partially reversing a 2.1% increase recorded in the previous quarter.

Industrial production and trade data were positive, however.

Production increased by 1.5%, reversing a 0.1% fall from June, with the Eurozone’s trade surplus widening from €17.7bn to €20.7bn.

At the end of the week, finalized inflation figures for the Eurozone were in line with prelim figures. The Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August.

From the U.S

In August, the annual rate of core inflation softened from 4.3% to 4.0% versus a forecasted 4.2%. While softer than expected, 4% continued to sit well above the FED’s 2% target, leaving tapering on the table.

Mid-week, industrial production and NY Empire State manufacturing figures were market positive.

On Thursday, retail sales, Philly FED Manufacturing PMI, and jobless claims figures were of greater interest, however.

In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.

Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.

Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.

At the end of the week, consumer sentiment also improved, albeit moderately. In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0, falling short of a forecasted 72.0.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental slid by 10.98%, with Volkswagen ending the week down by 3.40%. BMW and Daimler ended the week up by 1.44% and by 2.88% respectively, however.

It was also a mixed week for the banking sector. Deutsche Bank rallied by 2.64%, while Commerzbank fell by 0.18%.

From the CAC, it was a mixed week for the banks. BNP Paribas rose by 1.36% to buck the trend. Credit Agricole and Soc Gen fell by 2.59% and by 1.48% respectively.

It was also a mixed week for the French auto sector. Stellantis NV rose by 0.63%, while Renault slid by 1.71%.

Air France-KLM found much needed support, rising by 2.29%, while Airbus ended the week with a 1.15% loss.

On the VIX Index

It was back into the red for the VIX in the week ending 17th September, ending a run of 2 consecutive weekly gains.

Following a 27.67% jump from the previous week, the VIX slipped by 0.67% to end the week at 20.81.

2-days in the red from 5 sessions, which included 6.58% fall on Wednesday delivered the downside. An 11.34% rise on Friday limited the downside from the week, however.

For the week, the NASDAQ fell by 0.47%, with the Dow and the S&P500 ending the week down by 0.07% and by 0.57% respectively.

VIX 180921 Weekly Chart

The Week Ahead

It’s a relatively busy week ahead on the economic calendar.

Key stats include prelim September private sector PMIs for France, Germany, and the Eurozone.

At the end of the week, German IFO business climate figures will also influence.

From the U.S, it’s a quieter but influential week ahead.

On the economic data front, prelim private sector PMIs for September and weekly jobless claims will influence.

The main event of the week, however, is the FED monetary policy decision and projections.

With the FED expected to stand pat on policy, expect the FED’s economic projections and policy outlook to be key.

Preview: What to Expect From FedEx’s Q1 Earnings on Tuesday

The Memphis, Tennessee-based multinational delivery services company FedEx is expected to report its fiscal first-quarter earnings of $5.00 per share, which represents year-over-year growth of about 3% from $4.87 per share seen in the same period a year ago.

The delivery firm would post revenue growth of about 13% to $21.8 billion. In the last four quarters, on average, FedEx has beaten earnings estimates over 28%.

The company’s next earnings report is expected to be released on Tuesday, Sep 21 after market close.

Analyst Comments

“After 18 months of topline focus, attention turns to costs in F1Q22 as FedEx (like most other companies) grapples with labour and general inflation. With revenues running into tougher comps + normalizing trends as well (particularly in Ground), results could be challenging for the 2nd successive quarter,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“We see EBIT growth through YE of FY21 driven by both margin improvement and vol. driven rev. growth which is helped by limited Airfreight capacity and an eCommerce surge, though yields are mixed. We continue to see secular threats to Parcel and remain skeptical that these trends will be sustainable but believe that until there is evidence of a reversal in earnings momentum, the stock can trade at its historical multiple (14-15x PE) on current EPS.”

FedEx Stock Price Forecast

Twenty-one analysts who offered stock ratings for FedEx in the last three months forecast the average price in 12 months of $351.32 with a high forecast of $397 and a low forecast of $270.

The average price target represents a 35.97% change from the last price of $258.38. From those 21 analysts, 17 rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $270 with a high of $400 under a bull scenario and $100 under the worst-case scenario. The firm gave an “Equal-weight” rating on the health care company’s stock.

Several other analysts have also updated their stock outlook. Evercore ISI lowered the target price to $350 from $360. Citigroup slashed the price target to $360 from $365. JPMorgan cut the target price to $346 from $366.

“August quarter remained strong, although we are seeing some delays in shipments, which we expect management to address,” noted Helane Becker, equity analyst at Cowen.

“We are approaching the peak shipping season and expect to see ~50K new hires to handle what is likely to be record demand. Looking ahead, FedEx (FDX) should finally finish the TNT integration; European operations should show that.”

Check out FX Empire’s earnings calendar

European Equities: A Quieter Economic Calendar to Put Support to the Test

Economic Calendar

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a relatively bullish day for the European majors on Thursday.

The CAC40 and the EuroStoxx600 rose by 0.59% and 0.44% respectively, with the DAX30 ending the day up by 0.23%.

While economic data from the Eurozone provided direction, stats from the U.S were key later in the European session.

Impressive economic data from the U.S, which included an unexpected rise in retail sales, delivered the majors with support.

Following softer inflation figures for August, Thursday’s numbers also included a marked jump in the Philly FED Manufacturing PMI.

All in all, the numbers eased concerns over the economic recovery, which had returned following weak numbers from China on Wednesday.

The Stats

It’s a was a quiet day on the Eurozone economic calendar.

Eurozone trade data was in focus early in the European open.

Trade

In July, the Eurozone’s trade surplus widened from €17.7bn to €20.7bn.

According to Eurostat,

  • Euro area exports of goods to the rest of the world increased by 11.4%, year-on-year, to €206.0bn.
  • Imports from the rest of the world jumped by 17.1% to €185.3bn.
  • Intra-euro area trade rose by 16.8%, year-on-year, to €179.7bn.

From the U.S

It was a busy day on the economic calendar. Retail sales, jobless claims, and manufacturing data were in focus.

In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.

Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.

Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Volkswagen fell by a 1.46%, with BMW and Daimler seeing losses of 1.15% and 0.84% respectively. Continental led the way down, however, tumbling by 15.98%. Continental’s slide came in response to the Vitesco unit spinoff.

It was a bullish day for the banks. Deutsche Bank and Commerzbank rose by 1.00% and by 0.82% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and Credit Agricole ended the day up by 0.50% and by 0.29% respectively. BNP Paribas led the way, however, gaining 0.99%.

It was a mixed day for the French auto sector. Stellantis NV rose by 0.40%, while Renault fell by 1.69%.

Air France-KLM ended the day up by 1.81%, with Airbus SE rallying by 2.24%.

On the VIX Index

It was back into the green for the VIX on Thursday, marking a 4th daily gain in 6 sessions.

Partially reversing a 6.58% fall from Wednesday, the VIX rose by 2.81% to end the day at 18.69.

On Thursday, the NASDAQ rose by 0.13%, while the Dow and S&P500 ended the day down by 0.18% and by 0.16% respectively.

VIX 170921 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar.

Finalized August inflation figures for the Eurozone are due out later today. Expect any upward revisions to influence.

From the U.S, consumer sentiment figures for September will also provide direction late in the European session.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 10 points.

For a look at all of today’s economic events, check out our economic calendar.

European Equities: Eurozone Trade Data, Lagarde, and U.S Stats in Focus

Economic Calendar

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a bearish day for the European majors on Wednesday.

The CAC40 and the EuroStoxx600 fell by 1.04% and 0.80% respectively, with the DAX30 ending the day down by 0.68%.

A busier economic calendar provided the majors with direction on the day.

Ahead of the European open, economic data from China set the tone.

Industrial production was up by 5.3%, year-on-year, in August versus a forecasted 5.8% increase. In July, production had been up by 6.4%.

Fixed asset investment was up 8.9% versus a forecasted 9.0%. In July, fixed asset investments had been up 10.3%.

The disappointing numbers from China raised more red flags over the economic outlook.

The Stats

Wage growth and industrial production figures for the Eurozone were the key stats of the day.

In the 2nd quarter, wages fell by 0.4%, quarter-on-quarter. Wages had grown by 2.1% in the previous quarter.

In August, industrial production increased by 1.5%, month-on-month, reversing a 0.1% decline from July. Economists had forecast a 0.6% increase.

Other stats on the day included finalized inflation figures from France and Italy, which had a muted impact on the majors.

From the U.S

In September, the NY Empire State Manufacturing Index rose from 18.3 to 34.3. Economists had forecast a decline to 18.0.

Industrial production figures were also upbeat, with production up 0.4% in August versus a forecasted 0.4% increase. In July, industrial production had risen by 0.8%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen fell by 0.31% to buck the trend. BMW rallied by 1.24%, however, with Daimler and Continental seeing gains of 0.17% and 0.60% respectively.

It was also a mixed day for the banks. Deutsche Bank rose by 0.23%, while Commerzbank fell by 1.65%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole ended the day up by 0.45% and by 0.14% respectively. Soc Gen bucked the trend, however, falling by 0.17%.

It was also a mixed day for the French auto sector. Stellantis NV rallied by 2.29%, while Renault slipped by 0.75%.

Air France-KLM and Airbus SE ended the day down by 1.45% and by 0.35% respectively.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 2nd loss in 5 sessions.

Reversing a 0.46% gain from Tuesday, the VIX fell by 6.58% to end the day at 18.18.

On Wednesday, the Dow rose by 0.68%, with the NASDAQ and S&P500 ending the day up by 0.82% and by 0.85% respectively.

VIX 160921 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

Trade data for the Eurozone will be in focus later this morning. With little else for the markets to consider in the early part of the day, expect the numbers to influence.

Economic data from the U.S will likely have a greater impact, however. Retail sales, jobless claims, and Philly FED Manufacturing PMI figures are due out later in the day.

On the monetary policy front, ECB President Lagarde is also scheduled to speak ahead of the U.S numbers.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 28 points.

For a look at all of today’s economic events, check out our economic calendar.

Lennar On Track To Beat Earnings Estimates Again; Stock Has Over 20% Upside Potential

Lennar Corp, a home construction and real estate company, is expected to report earnings per share of $3.27 in the fiscal third quarter, which represents year-over-year growth of over 54% from $2.12 per share seen in the same period a year ago.

The Miami, Florida-based company would post year-over-year revenue growth of nearly 24% to around $7.3 billion. For four quarters in a row, the company has exceeded expectations on earnings per share.

The company will release earnings for the third quarter ended August 31, 2021 after the market closes on September 20, 2021.

According to Zacks research, Lennar expects to deliver 15,800-16,100 homes in the third-quarter fiscal 2021 with a gross margin of 27-27.5%. The company reaffirms a delivery range of 62,000-64,000 homes for fiscal 2021 but raises the ASP expectation to $420,000 from $400,000.

Lennar shares surged over about 30% so far this year. The stock closed 0.8% lower at $98.59 on Monday.

Analyst Comments

“Shares of Lennar have outperformed the industry so far this year. The company is benefiting from effective cost control and focus on making its homebuilding platform more efficient, which in turn resulted in higher operating leverage. Higher demand for new homes backed by declining mortgage rates and low inventory levels bodes well. Focus on the lighter land strategy to boost free cash flow will bolster the balance sheet and thereby drive returns,” noted Analysts at ZACKS Research.

“Moreover, it has provided strong fiscal Q3 homebuilding gross margin guidance, suggesting 420 basis points (bps) increase at mid-point. Also, it has lifted average selling price and margin expectation for fiscal 2021, indicating 6% and 400bps year-over-year growth. However, higher land, labor and material costs are concerning. This may exert pressure on the company’s upcoming quarters as well.”

Lennar Stock Price Forecast

Ten analysts who offered stock ratings for Lennar in the last three months forecast the average price in 12 months of $123.50 with a high forecast of $160.00 and a low forecast of $100.00.

The average price target represents a 25.27% change from the last price of $98.59. From those 10 analysts, six rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

CFRA raised the target price by $15 to $130. Royal Bank of Canada lifted their price objective to $100 from $97 and gave the company a “sector perform” rating. JPMorgan boosted their target price to $141 from $115. Barclays boosted their target price to $110 from $105 and gave the company an “equal weight” rating.

We think it is good to buy at the current level and target $123 in the long-term as the 200-day Moving Average and 100-200-day MACD Oscillator signals a buying opportunity.

Check out FX Empire’s earnings calendar

European Equities: Economic Data from China, the Eurozone, and the U.S in Focus

Economic Calendar

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a mixed day for the European majors on Tuesday.

The CAC40 and the EuroStoxx600 fell by 0.36% and by 0.01% respectively, while the DAX30 ended the day up by 0.14%.

With economic data from the Eurozone limited to inflation figures from Spain, economic data from the U.S was key on the day,

Softer inflation figures from the U.S did little to shift sentiment towards FED monetary policy, with concerns over economic growth also pegging the majors back.

The Stats

Finalized inflation figures from Spain were in focus on Tuesday.

In August, the annual rate of inflation accelerated from 2.9% to 3.3%, which was in line with prelim figures.

The numbers had a muted impact on the European majors, however.

From the U.S

In August, the annual rate of core inflation softened from 4.3% to 4.0%. Economists had forecast an annual core rate of inflation of 4.2%.

Month-on-month, core consumer prices rose by 0.1%, while consumer prices increased by 0.3%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. Daimler gained 0.97%, with BMW and Continental rising by 0.66% and by 0.55% respectively. Volkswagen ended the day up by a modest 0.27%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.77% and by 1.91% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen and Credit Agricole ended the day down by 1.83% and by 2.54% respectively. BNP Paribas saw a more modest 1.17% loss on the day.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.74%, while Renault fell by 0.63%.

Air France-KLM and Airbus SE ended the day down by 1.93% and by 2.02% respectively.

On the VIX Index

It was back into the green for the VIX on Tuesday, marking a 3rd day in the green from 4 sessions.

Partially reversing a 7.54% fall from Monday, the VIX rose by 0.46% to end the day at 19.46.

On Tuesday, the NASDAQ slipped by 0.45%, with the Dow and S&P500 ending the day down by 0.84% and by 0.57% respectively.

VIX 150921 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar.

Wage growth and industrial production figures for the Eurozone will be key stats on the day. Expect the industrial production figures to have a greater impact on the majors, however.

Finalized inflation figures for France and Italy are also due out but should have a muted impact on the majors.

From the U.S, NY Empire State Manufacturing and industrial production figures will also influence later in the day.

Ahead of the European open, however, economic data from China will set the tone.

Key stats include fixed asset investments and industrial production figures for August, with both needing to see a pickup to ease growth concerns.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 7 points.

For a look at all of today’s economic events, check out our economic calendar.

Boeing Upgrades Outlook for Jet Demand on Pandemic Recovery Hopes

The world’s largest aerospace company Boeing has upgraded its long-term forecasts for the commercial, defence and space aerospace market, reflecting signs of the industry’s recovery following the impacts of COVID-19.

According to 2021 Boeing Market Outlook (BMO), the aerospace products and services segment will grow to $9 trillion over the next decade. Forecasts have increased from $8.5 trillion a year ago, and from $8.7 trillion in the pre-pandemic forecast for 2019, reflecting the market’s continued recovery.

According to the Commercial Market Outlook (CMO), the company said the global aerospace market is recovering largely. Within the next two years, long-haul travel is expected to return to pre-pandemic levels, followed by domestic demand for air travel and intra-regional travel, which will ease health and travel restrictions.

The Boeing Market Outlook projects global demand for 19,000 commercial airplanes valued at $3.2 trillion over the next decade. During the next 20 years, Boeing projects the demand for more than 43,500 new airplanes worth $7.2 trillion, up about 500 planes over last year’s forecast.

Boeing Stock Price Forecast

Fifteen analysts who offered stock ratings for Boeing in the last three months forecast the average price in 12 months of $275.87 with a high forecast of $307.00 and a low forecast of $224.00.

The average price target represents a 28.62% change from the last price of $214.48. From those 15 analysts, eight rated “Buy”, seven rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $274 with a high of $373 under a bull scenario and $146 under the worst-case scenario. The firm gave an “Overweight” rating on the company’s stock.

Several other analysts have also updated their stock outlook. UBS cut the target price to $290 from $310. Wells Fargo raised the price target to $254 from $244. Bernstein lifted the target price to $252 from $242. Vertical Research upped the target price to $250 from $242.

Analyst Comments

“We expect the market to value the company based on 2025 normalized post-COVID-19 earnings instead of a partial recovery in 2023. Broader COVID-19 vaccine rollout through 2021, eventual easing of international borders, and improved airline booking trends are positive catalysts that could force bears and sideliners to re-evaluate,” noted Kristine Liwag, Equity Analyst at Morgan Stanley.

“Prior headwinds have abated, including: 1) lower production rates are now aligned to weaker demand; 2) implied aircraft cancellations have been recorded in the backlog de-risking the order book; and 3) current liquidity defers a potential equity raise to at least 2022, removing sentiment overhang.”

Check out FX Empire’s earnings calendar

European Equities: Economic Data from the U.S in Focus Late in the Day…

Economic Calendar

Tuesday, 14th September

Spanish CPI (YoY) (Aug) Final

Spanish HICP (YoY) (Aug) Final

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a relatively bullish start to the week for the European majors on Monday.

The CAC40 and the EuroStoxx600 rose by 0.20% and 0.29% respectively, with the DAX30 ending the day up by 0.59%.

A particularly light economic calendar allowed the European markets to claw back some of the previous week’s losses.

Concerns over the economic recovery and outlook remained, however, pegging the majors back from more material gains.

The Stats

There were no major stats from the Eurozone to provide the majors with direction.

From the U.S

There were also no major stats from the U.S to influence the European majors later in the day.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. Volkswagen rose by a modest 0.97% on the day. Daimler rallied by 3.71%, however, with BMW and Continental seeing gains of 3.39% and 3.35% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank rose by 1.63% and by 1.35% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and Credit Agricole ended the day up by 1.17% and by 1.29% respectively. BNP Paribas led the way, however, rallying by 2.27%.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.23%, with Renault rallying by 2.61%.

Air France-KLM ended the day up by 2.21%, with Airbus SE rising by 0.63%.

On the VIX Index

It was back into the red for the VIX on Monday, ending a 2-day winning streak.

Partially reversing an 11.44% jump on Friday, the VIX fell by 7.54% to end the day at 19.37.

On Monday, the NASDAQ slipped by 0.07%, while the Dow and S&P500 ended the day up by 0.76% and by 0.23% respectively.

VIX 140921 Daily Chart

The Day Ahead

It’s a quiet day ahead on the Eurozone’s economic calendar.

Finalized Spanish inflation figures for August will be in focus early in the European session. We don’t expect the numbers to trouble the European majors, however.

From the U.S, inflation figures for August will draw plenty of interest and influence, however. With the FED viewing the spike in inflation as transitory, another jump in inflation would question the policy outlook.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 72 points.

For a look at all of today’s economic events, check out our economic calendar.

Morgan Stanley Cuts Boston Beer’s Target Price to $800 After Company Withdraws FY2021 Guidance

Morgan Stanley slashed their base stock price forecast on Boston Beer to $800 from $900, reiterating an “Overweight” rating on one of the largest craft brewers in the United States and said the company is experiencing a sharper deceleration in hard seltzer category growth than was previously expected.

On Wednesday, September 8, the alcoholic beverage company withdrew its 2021 financial guidance issued on July 22, 2021, citing uncertainty about hard seltzer demand trends for the remainder of 2021.

Boston Beer said since the last guidance update for the fiscal year 2021 financial performance, the market for hard seltzer products has continued to experience decelerating growth trends. Industry reports have estimated that the full year 2021 volume for the hard seltzer market retail sales will have over 100 million fewer cases than the volumes estimated in May 2021 and over 30 million fewer cases than the volumes estimated in July 2021, the company said in an SEC filing.

While demand for the Company’s hard seltzer products continues to grow at faster than category rates in measured off-premise channels, the company believe there will be continuing uncertainty about hard seltzer demand trends for the remainder of 2021.

Boston Beer (SAM) withdrew its FY21 guidance at an investor conference citing uncertainty on the growth outlook for the US hard seltzer category, despite continued Truly share gains. We lower our EPS estimates by 15% and price target by 19% but stay Overweight with the market pricing M-HSD% long-term topline growth, below our 13%,” noted Filippo Falorni, equity analyst at Morgan Stanley.

“In connection with an investor conference, SAM issued an 8-K withdrawing its FY21 guidance provided with Q2 results and announced that it currently expects that FY21 EPS will fall below the previously reported estimate of between $18.00 and $22.00, excluding the impact of ASU 2016-09. SAM indicated that growth for the hard seltzer category remains uncertain with decelerating trends in recent months. SAM cited industry reports that indicated that the FY21 volume for the hard seltzer market retail sales will have over 100M fewer cases than the volumes estimated in May 2021 and over 30M fewer cases than the volumes estimated in July 2021.”

Other equity analysts also recently cut their stock price outlook. Berenberg slashed the target price to $550 from $978. Guggenheim cut the target price to $775 from $1,200. UBS lowered the target price to $775 from $850. Credit Suisse cut the target price to $965 from $1,281.

Thirteen analysts who offered stock ratings for Boston Beer in the last three months forecast the average price in 12 months at $686.23 with a high forecast of $990.00 and a low forecast of $400.00.

The average price target represents a 26.42% change from the last price of $542.82. Of those 13 equity analysts, six rated “Buy”, five rated “Hold” while two rated “Sell”, according to Tipranks. Boston Beer shares dipped over 45% so far this year. The stock closed 0.84% higher at $542.82 on Friday.

Morgan Stanley gave the stock price forecast of $1,000 under the bull scenario and $300 under the worst-case scenario.

“We are Overweight on Boston Beer (SAM) as we see a compelling long-term topline growth story, albeit with higher uncertainty given the recent category slowdown. We forecast ~13% LT topline forecast at SAM, above consensus and market expectations of ~6%, driven by the Truly brand within the high-growth US hard seltzer category,” Morgan Stanley’s Falorni added.

“We believe the secular growth drivers of the hard seltzer category (favorable demographics with a younger consumer base, expanding the consumer base to wine/spirits drinkers, innovation contribution, distribution expansion opportunities) are still in-place, even though the recent growth slowdown, as the category matures, has been faster than we originally expected.”

Check out FX Empire’s earnings calendar

European Equities: A Quiet Economic Calendar Will Leave the Majors in the Hands of the U.S Markets

Economic Calendar

Tuesday, 14th September

Spanish CPI (YoY) (Aug) Final

Spanish HICP (YoY) (Aug) Final

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a bearish end to the week for the European majors on Friday.

The CAC40 and the EuroStoxx600 fell by 0.31% and 0.26% respectively, with the DAX30 ending the day down by 0.09%.

Economic data from the Eurozone was limited to finalized inflation figures from Germany, which had a muted impact on the majors.

From the U.S, wholesale inflation figures for August also had a muted impact as the markets responded further to the ECB’s shift in stance on monetary policy.

The Stats

Finalized German inflation figures were in focus ahead of the European open.

In August, consumer prices stalled after having risen by 0.90% in July. Germany’s annual rate of inflation picked up from 3.8% to 3.9%, which was in line with prelim figures.

According to Destatis,

  • The prices of goods increased by 5.6% between August 2020 and August 2021.
  • Energy product prices were up 12.6%, with food prices up 4.6%.
  • Prices for transport equipment (+5.5%) and furniture & lighting equipment (+4.0%) also saw sizeable increases.
  • Year-on-year, services prices were up 2.5%, with the annual rate of inflation excluding energy up 3.0%.

From the U.S

Wholesale inflation was in focus late in the European session.

In August, the U.S annual rate of wholesale inflation accelerated from 7.8% to 8.3%. The core annual rate of wholesale inflation picked up from 6.2% to 6.7%. Month-on-month, the producer price index rose by 0.7% after having risen by 1.0% in July.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Friday. Volkswagen fell by 0.39% to buck the trend on the day. BMW ended the day up by 0.40%, with Daimler and Continental rising by 0.58% and by 0.77% respectively, however.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.23% and by 0.15% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole fell by 1.71% and by 1.09% respectively, while Soc Gen ended the day up by 0.08%.

It was also a mixed day for the French auto sector. Stellantis NV rose by 0.10%, while Renault fell by 0.32%.

Air France-KLM slid by 2.24%, with Airbus SE falling by 0.73%.

On the VIX Index

It was a 2nd consecutive day in the green the VIX on Friday.

Following a 4.68% gain on Thursday, the VIX jumped by 11.44% to end the day at 20.95.

On Friday, the NASDAQ fell by 0.87%, with the Dow and S&P500 ending the day down by 0.78% and by 0.77% respectively.

VIX 130921 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar.

There are no material stats due out of the Eurozone to provide the majors with direction at the start of the week.

From the U.S, there are also no major stats to provide the majors with direction late in the session.

The lack of stats will leave the majors in the hands of COVID-19 news updates and any central bank chatter on the day.

Late in the day, the majors will likely take direction from the U.S majors.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 80 points.

For a look at all of today’s economic events, check out our economic calendar.

Earnings Calendar Quiet Next Week; U.S. Inflation Print Could Dictate Market Trend

Earnings Calendar For The Week Of September 13

Monday (September 13)

IN THE SPOTLIGHT: ORACLE

The world’s largest database management company is expected to report its fiscal first-quarter earnings of $0.97 per share, which represents year-over-year growth of over 4% from $0.93 per share seen in the same period a year ago. The Austin, Texas-based computer technology corporation would post revenue of $9.8 billion.

Oracle’s current low valuation at ~16.7x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” noted Keith Weiss, equity analyst at Morgan Stanley.

“With management guiding to mid-single-digit CC revenue growth in a software sector filled with strong secular growth stories, and operating margins declining in FY22 due to heightened investment in Cloud, we remain Equal-weight while our price target moves up to $77.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 13

Ticker Company EPS Forecast
ORCL Oracle $0.97
HRB H&R Block -$0.34

 

Tuesday (September 14)

IN THE SPOTLIGHT: KASPIEN HOLDINGS

Kaspien Holdings, an American company that provides software and services for e-commerce, is expected to report a loss of 47 cents a share revenue of around $39 million in the fiscal second quarter.

U.S. Inflation Data: On September 14, the consumer price index is scheduled to be released. Global trends and inflation data will drive equity markets next week, which after a run of record-breaking trades have taken a breather. If the data continues to be hot, Treasury yields could rise, which would be negative for the market.

“High inflation is also a reason to justify a Fed taper. Headline CPI is likely to remain close to 5.5% year-on-year this week with core inflation remaining at 4.3%. Given ongoing supply issues, rising labour costs and a clear sense of strong corporate pricing power – note the latest Federal Reserve Beige Book stated “several Districts indicated that businesses anticipate significant hikes in their selling prices in the months ahead” – we see little reason for inflation to fall meaningfully before 2Q 2022,” noted James Knightley, Chief International Economist at ING.

“The risk is that rising inflation expectations keeps it higher. Consequently, we continue to look for the Federal Reserve to conduct a swift taper with asset purchases ending in 2Q and interest rates increasing from late 2022 onwards.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE SEPTEMBER 14

Ticker Company EPS Forecast
JD Jd Sports Fashion -£3.35

 

Wednesday (September 15)

Ticker Company EPS Forecast
JKS JinkoSolar Holding Co. Ltd. ADR -$1.03
RDW Redrow £0.17

 

Thursday (September 16)

Ticker Company EPS Forecast
AHT Ashtead Group £0.51

 

Friday (September 17)

No major earnings are scheduled for release

European Equities: A Week in Review – 10/09/21

The Majors

It was a bearish week for the majors in the week ending 10th September. The DAX30 and the EuroStoxx600 slid by 1.09% and by 1.18% respectively. After bucking the trend in the previous week, the CAC40 saw a more modest 0.39% loss in the week.

Economic data from Germany failed to support the majors, in spite of the stats being skewed to the positive.

Concerns over the economic recovery, stemming from the spread of the Delta variant, weighed on the majors.

Economic data from China and the U.S also failed to support the majors, in spite of better-than-expected numbers.

In August, China’s U.S Dollar trade surplus widened from $56.59bn to $58.35bn, with exports up 25.6% year-on-year, and imports up 33.1%. In July, imports had been up by 28.1% and exports up by 19.3%. Economists had forecast the trade surplus to narrow from $56.59bn to $51.05bn.

The Stats

Economic data included factory orders, industrial production, and trade data from Germany.

While the stats were skewed to the positive, there was little support for the majors, with the markets looking ahead to the ECB policy decision.

ZEW Economic Sentiment figures for Germany and the Eurozone were disappointing, however, pegging the majors back.

At the end of the week, finalized inflation figures from Germany had a muted impact on the majors.

While there were plenty of stats for the markets to consider, it was ultimately the ECB monetary policy decision and press conference that was the main event.

In line with market expectations, the ECB held policy unchanged and talked of economic uncertainty stemming from the Delta variant. Lagarde did confirm plans to modestly reduce the asset purchasing program.

While supporting the majors on the day, the Thursday press conference marked the beginnings of the end to pandemic measures.

From the U.S

Early in the week, JOLT’s job openings for July were upbeat with openings rising from 10.185m to 10.943m. Economists had forecast a decline to 10.000m.

On Thursday, jobless claims were also impressive. In the week ending 3rd September initial jobless claims fell from 345k to 310k.

At the end of the week, wholesale inflation was in focus. In August, the core PPI rose by 0.6% versus a forecasted 0.5%, with the Producer Price Index rising by 0.7% versus a forecasted 0.6%. Both had risen by 1.0% in July.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Volkswagen slid by 3.46%, with Continental and Daimler ending the week down by 2.84% and by 1.65% respectively. BMW saw a more modest 0.40% loss in the week.

It was a bullish week for the banking sector, however. Deutsche Bank rallied by 2.32%, with Commerzbank rising by 0.55%.

From the CAC, it was a bearish week for the banks. BNP Paribas and Credit Agricole fell by 1.95% and by 1.24% respectively, with Soc Gen ending the week down by 0.49%.

It was also a bearish week for the French auto sector. Stellantis NV and Renault slid by 2.46% and by 2.86% respectively.

Air France-KLM fell by a further 3.39%, with Airbus ending the week with a 0.1% loss.

On the VIX Index

It was a 2nd consecutive week in the green for the VIX in the week ending 10th September.

Following an 0.12% rise from the previous week, the VIX jumped by 27.67% to end the week at 20.95.

3-days in the green from 4 sessions, which included a 11.44% rise on Friday delivered the upside.

For the week, the Dow slid by 2.15%, with the NASDAQ and the S&P500 falling by 1.61% and by 1.69% respectively.

VIX 110921 Weekly Chart

The Week Ahead

It’s a relatively busy week ahead on the economic calendar.

Key stats include industrial production and trade data for the Eurozone, the numbers due out on Wednesday and Thursday.

Finalized inflation figures for member states and the Eurozone are also due out in the week.

Barring any marked revisions from prelim figures, expect the Eurozone’s numbers to have a greater influence.

From the U.S, it’s a busy week ahead, with inflation and industrial production in focus early in the week.

On Thursday, retail sales and jobless claims figures will also have a material impact on market risk sentiment.

Consumer sentiment figures for September wraps things up on Friday.

We can also expect economic data from China to influence in the week.

Industrial production, fixed asset investment, and retail sales figures will be in focus on Wednesday.

Away from the economic calendar, expect COVID-19 news updates and central bank chatter to also influence.

Albemarle Shares Hit All-Time High on Solid 2022 Earnings Forecast

Albemarle shares hit a fresh record high on Friday after the largest producer of lithium forecast a sharp jump in adjusted core earnings for 2022, largely due to higher pricing and volumes for Lithium and anticipated stronger performance for catalysts following previous pandemic-related weakness.

The Charlotte, North Carolina-based company forecasts full-year 2022 adjusted core earnings to jump 25%-35% compared to 2021.

Moreover, Albemarle introduced its 2026 adjusted EBITDA forecast, which ranges between $2.2 billion and $2.6 billion. Adjusted EBITDA is expected to be between $810 million and $860 million in 2021.

Following this, Albemarle shares hit an all-time high of $252.97, rising about 4% on Friday. The stock has surged nearly 70% so far this year.

“We see exciting growth opportunities ahead for Albemarle, primarily driven by the importance of electrification in the transition to more sustainable sources of energy,” said Albemarle CEO Kent Masters.

“We are actively implementing our structured operating model, the Albemarle Way of Excellence, to help ensure we successfully achieve our strategic goals. With our focus on sustainable practices, our access to world-class resources, and our position as an industry leader, we aim to maintain a leadership position in all our businesses to serve our customers’ growing needs and create shareholder value well into the future.”

Analyst Comments

Albemarle will struggle to grow its lithium EBITDA over time as the continued reset in its lithium contract prices that we expect (whether the reset continues gradually in 2022+ as in 2020 and 2021, or suddenly in 2022) is likely to offset volume growth,” noted Vincent Andrews, Equity Analyst at Morgan Stanley.

“The lack of free cash flow through 2022 (MSe) raises questions about how aggressively Albemarle will pursue future lithium volume growth and/or how it will fund it. As it becomes apparent that contract lithium prices will not revert to prior peaks, we expect lithium to derate from >40x to ~16.5x EBITDA, in line with industrial gas (IG) companies.”

Albemarle Stock Price Forecast

Twelve analysts who offered stock ratings for Albemarle in the last three months forecast the average price in 12 months of $230.08 with a high forecast of $280.00 and a low forecast of $127.00.

The average price target represents a -7.15% change from the last price of $247.81. From those 12 analysts, seven rated “Buy”, three rated “Hold” while two rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $80 with a high of $200 under a bull scenario and $60 under the worst-case scenario. The firm gave an “Underweight” rating on the company’s stock.

Several other analysts have also updated their stock outlook. Jefferies raised the target price to $280 from $260. Berenberg lifted the price objective to $280 from $115. Cowen upped the price target to $260 from $180.

Check out FX Empire’s earnings calendar

Kroger Shares Slump Over 8% After Gross Margin Disappoints in Q2

Kroger shares slumped over 8% on Friday after the food retailer said its gross margin – business’s net sales minus the cost of goods sold – fell to 21.4% year-on-year during the second quarter from 22.8% a year ago despite beating earnings estimates.

The company said this was primarily due to continued price investments, and higher shrink and supply chain costs, partially offset by sourcing benefits and growth in the alternative profit business.

However, the U.S. supermarket chain reported better-than-expected earnings and revenue in the second quarter and lifted its full-year guidance. The retailer, which operates over 2,500 supermarkets in the U.S., reported adjusted earnings per share of $0.80, beating the market expectations of $0.64 per share.

The supermarket chain is known for exceeding earnings expectations. Kroger has beaten earnings estimates in seven of the last eight quarters.

Kroger posted revenues of $31.68 billion for the quarter ended July 2021, beating the Wall Street consensus estimates of 30.4 billion. Compared to an earlier forecast of 2.5%-4% decline, the company now expects a smaller decline of 1%-1.5% annually.

Kroger shares slumped over 8% to $42.08 on Friday. The stock has surged over 30% so far this year.

Executive Comments

Kroger’s strong execution resulted in identical sales above our internal expectations for the second quarter, and we continued to remove costs from the business. Driven by the momentum in our results and sustained food at home trends, we are raising our full-year guidance,” said CFO Gary Millerchip.

“We now expect our two-year identical sales stack to be in the range of 12.6% to 13.1%. We expect our adjusted net earnings per diluted share to be in the range of $3.25 to $3.35.”

Analyst Comments

“Another beat & raise as expected with solid IDs, OG&A leverage, and EBIT/EPS. One (big) caveat: gross margin missed and should stoke fears about margin pressure from inflation. Risk/reward skews negative in our view with share price & valuation elevated,” noted Simeon Gutman, Equity Analyst at Morgan Stanley.

“Our view is industry sales will eventually unwind and normalize; back to school/office post-Labor Day could be a catalyst for this to occur in 2H. But the Delta variant may keep demand elevated and inflation should provide a top-line tailwind. Importantly, we think the stock was already discounting at least $3.50 in ’21 EPS and as much as $3.75-$4.00. KR should still beat its updated guidance range, but we don’t see much upside beyond $3.50-$3.75 given gross margin choppiness and IDs that are unlikely to reaccelerate above 1H levels.”

Kroger Stock Price Forecast

Fifteen analysts who offered stock ratings for Kroger in the last three months forecast the average price in 12 months of $38.71 with a high forecast of $46.00 and a low forecast of $31.00.

The average price target represents a -8.38% change from the last price of $42.25. From those 15 analysts, two rated “Buy”, ten rated “Hold” while three rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $31 with a high of $50 under a bull scenario and $16 under the worst-case scenario. The firm gave an “Underweight” rating on the food retailer’s stock.

Several other analysts have also updated their stock outlook. JP Morgan raised the target price to $40 from $36. Deutsche Bank lifted the price target to $42 from $41. Guggenheim upped the target price to $41 from $37.

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European Equities: A Light Economic Calendar to Test Support ahead of the U.S Open

Economic Calendar

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was a mixed day for the European majors on Thursday.

The DAX30 and the CAC40 saw modest gains of 0.08% and 0.24% respectively, while the EuroStoxx600 slipped by 0.04%.

Economic data had a limited impact on the majors, in spite of positive numbers from Germany and the U.S.

The ECB’s monetary policy decision and press conference delivered much-needed support to the majors, however.

Through the early part of the sessions, concerns over a more hawkish shift on monetary policy had weighed on the majors.

Plans to modestly cut the pandemic’s emergency bond purchasing program was good enough to leave the majors relatively flat.

The Stats

German trade data was in focus going into the European open.

In July, Germany’s trade surplus widened from €13.6bn to €17.9bn. Economists had forecast a narrowing to €13.0bn

According to Destatis,

  • Exports were up 0.5% on the previous month and up by 12.4% on the same month a year earlier.
  • Imports were down 3.8% on the previous month, while up 16.6% on the same month a year earlier.

Trade with EU Countries:

  • Goods exports to EU member states rose by 17.7%, year-on-year, with imports up 18.7%.
  • To euro area countries, exports rose by 17.4%, with imports from euro area countries up 22.4%.
  • Exports to EU countries not belonging to the euro area increased by 18.4%, while imports were up by 11.0%.

Trade with non-EU Countries:

  • Exports to third countries increased by 6.8%, with imports from third countries up 14.2%.

Trade with the UK:

  • Compared with the same month last year, exports were up 7.2% to the UK. Imports from the UK increased by 15.6%.

Elsewhere:

Exports to China fell by 4.3%, year-on-year, while exports to the U.S were up 15.7%.

From the U.S

Jobless claim figures were in focus, though the stats had a muted impact, with the release coinciding with the ECB press conference.

In the week ending 3rd September, initial jobless claims fell from 345k to a post-pandemic low 310k. Economists had forecast a decline to 335k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen and BMW ended the day up by 0.84% and by 0.03% respectively. Daimler and Continental fell by 0.15% and by 0.55% respectively, however.

It was also a mixed day for the banks. Deutsche Bank rose by 0.14%, while Commerzbank slid by 2.10%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.45% and by 0.17% respectively, with Soc Gen ending the day up by 0.57%.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.40%, while Renault fell by 0.47%.

Air France-KLM joined airline stocks in the red, falling by 0.97%, while Airbus SE rose by 1.30%.

On the VIX Index

It was back into the green the VIX on Thursday.

Reversing a 0.99% fall from Wednesday, the VIX rose by 4.68% to end the day at 18.80.

On Thursday, the NASDAQ fell by 0.25%, with the Dow and S&P500 ending the day down by 0.43% and by 0.46% respectively.

VIX 100921 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

Finalized August inflation figures for Germany are due out going into the European open.

Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the majors. On Thursday, the ECB stood by its transitory view on inflation. That should limit the impact of any marginal upward revision.

From the U.S, wholesale inflation figures will likely have a greater impact, however. A spike in wholesale inflation could give the FOMC hawks firmer footing for a near-term shift in policy, albeit a tapering to the asset purchasing program.

Following a pullback in the U.S markets on Thursday, concerns over the economic outlook will likely remain a factor with little on the economic calendar for the markets to consider.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 9 points.

For a look at all of today’s economic events, check out our economic calendar.

Torrid Holdings Shares Soar Over 30% on Earnings Beat; Target Price $32 in Best Case

Torrid Holdings shares jumped over 30% on Thursday after the largest direct-to-consumer brand of women’s plus-size apparel reported better-than-expected earnings and revenue in the second quarter and said its net sales increased 34% on e-commerce business and improvement in-store productivity.

The company, which offers plus-size clothing and accessories for women size 10-30, reported adjusted earnings per share of $0.36, beating the Wall Street consensus estimates of $0.13.

The company’s revenue jumped over 30% year-on-year to $332.9 million. That was also higher than the market expectations of $290 million. That increase was largely driven by continued growth in its e-commerce business and improvement in-store productivity trends.

Torrid forecasts fiscal third-quarter net sales in the range of $305 million and $315 million and adjusted EBITDA of between $47 million and $52 million. For the full year, the company predicted net sales in the range of $1.29 billion to $1.31 billion and adjusted EBITDA of between $248 million and $258 million.

Following this Torrid Holdings shares jumped over 30% to $24.43 on Thursday. The stock is up over 16% since its debut on the New York Stock Exchange in July with an IPO price of $21.

Analyst Comments

Torrid Holdings (CURV) reported significant 2Q upside (top-line, GM), with strength continuing into 3Q, driving the guide ~40% ahead of cons. While sourcing bottlenecks are a headwind, they appear less onerous than feared. Concerns around potential competitive pressures are likely to linger background for now, but current momentum should help to quell near-term concerns. Raising estimates, Reiterate Buy,” noted Janine Stichter, Equity Analyst at Jefferies.

“As the leader in the plus-size market with strong digital capabilities, Torrid looks well-placed to benefit from outsized growth in the sector while driving share gains. A loyal customer base and low-risk merch strategy mitigate risk and drive stability in the model. LT earnings algo (HSD%+ revs, LDD% EBITDA growth) is likely conservative.”

Torrid Stock Price Forecast

Eight analysts who offered stock ratings for Torrid in the last three months forecast the average price in 12 months of $29.14 with a high forecast of $32.00 and a low forecast of $26.00.

The average price target represents a 19.13% change from the last price of $24.46. From those eight analysts, seven rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $28 with a high of $41 under a bull scenario and $10 under the worst-case scenario. The firm gave an “Overweight” rating on the company’s stock.

“2Q’s 3% revenue beat & strong flow thru highlight a strong print. At 1-2% share of women’s plus size apparel spending, we see upside to our 7% 2021-23 Base Case revenue CAGR forecast. Superior fit, fashion & quality differentiate CURV from value-priced players. Raising 2022/23 adj EBITDA 9%/4%,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“We are constructive on CURV’s product fit expertise in women’s plus sizes, low fashion risk assortment, and sector-leading digital penetration (70% 2020), with eComm EBIT margin at least at parity with the store. The plus-size clothing category is forecast to grow at twice the rate of the US apparel industry comparable to the demand outlook for global activewear. Our 9% 2019-23 CURV revenue growth CAGR appears conservative given < 2% dollar market share, underdeveloped digital marketing versus peers, and new store growth opportunity. Stronger than expected comps and improving leverage on non-merchandise expenses could provide some upside to our near-term revenue and EBIT margin estimates.”

Several other analysts have also updated their stock outlook. Robert W. Baird set an “outperform” rating and a $30 price target. The Goldman Sachs Group issued a “neutral” rating and a $26 target price. Cowen issued an “outperform” rating and a $30.

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