Autodesk Could Hit New All-Time High on Strong Earnings; Target Price $353

Autodesk, a leading provider of drafting and design software for the building, and infrastructure fields is expected to report its second-quarter earnings of $1.12 per share, which represents year-over-year growth of over 14% from $0.98 per share seen in the same period a year ago.

On average, the company has delivered an earnings surprise of over 9% in the last four consecutive quarters. The San Rafael, California-based company would post year-over-year revenue growth of over 15% to $1.05 billion.

For the fiscal second quarter, the company expects revenues between $1.045 billion and $1.06 million. The company expects non-GAAP earnings of $1.08-$1.14 per share.

Autodesk shares have gained over 9% so far this year. Wednesday’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

“Upside in resellers’ Q2 performance & forward expectations increases confidence ADSK is on track to hit revenue & billings growth guides in FY22, despite a back-end loaded year. Our estimates are towards the high-end of guidance & forecast achieving a $2.4 billion FY23 FCF target. Resume coverage at a price target of $334,” noted Keith Weiss, equity analyst at Morgan Stanley.

“On the back of our stronger checks, our estimates are towards the high-end of FY22 guidance ranges and forecast Autodesk achieves FY23 FCF target for $2.4 billion as back-end loaded, multi-year deals in FY22 result in an outsized deferred revenue build and FCF collection in FY23. Our modified-DCF based price target of $334 applies a 28x EV/ FCF multiple to our FY26e FCF estimate, or 1.9x growth-adjusted, and discounts back at an 11% WACC. Debates on the longer-term sustainable growth, quality of FY23 FCF given multi-year deals, and higher macro sensitivity likely limit further multiple expansion near-term, leaving us equal weight. Autodesk is scheduled to report F2Q22 earnings on Wednesday, August 25th, after market close.”

Autodesk Stock Price Forecast

Eleven analysts who offered stock ratings for Autodesk in the last three months forecast the average price in 12 months of $353.22 with a high forecast of $380.00 and a low forecast of $330.00.

The average price target represents a 5.63% change from the last price of $334.38. From those 11 analysts, nine rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $334 with a high of $451 under a bull scenario and $230 under the worst-case scenario. The firm gave an “Equal-weight” rating on the multinational software corporation’s stock.

Several other analysts have also updated their stock outlook. RBC raised the target price to $363 from $340. Stifel lifted the target price to $370 from $342. Mizuho upped the price target to $380 from $355.

Check out FX Empire’s earnings calendar

European Equities: Private Sector PMIs and Consumer Confidence in Focus

Economic Calendar

Monday, 23rd August

French Manufacturing PMI (Aug) Prelim

French Services PMI (Aug) Prelim

German Manufacturing PMI (Aug) Prelim

German Services PMI (Aug) Prelim

Eurozone Manufacturing PMI (Aug) Prelim

Eurozone Markit Composite PMI (Aug) Prelim

Eurozone Services PMI (Aug) Prelim

Eurozone Consumer Confidence (Aug)

Tuesday, 24th August

German GDP (YoY) (Q2)

German GDP (QoQ) (Q2)

Wednesday, 25th August

German Ifo Business Climate Index (Aug)

Thursday, 26th August

GfK German Consumer Climate (Sep)

The Majors

It was relatively bullish day for the European majors on Friday, with the majors reversing losses from early in the session.

The DAX30 rose by 0.27%, with the CAC40 and the EuroStoxx600 seeing gains of 0.31% and 0.33% respectively.

A quiet economic calendar allowed the markets to hit pause on the pullback through the week.

Apprehension ahead of next week’s Jackson Hole Symposium and concerns over the Delta variant pegged the majors back, however.

The Stats

In July, Germany’s producer price index for industrial products rose by 1.9% versus a forecasted 0.8% increase. The index had risen by 1.3% in June.

According to Destatis,

  • Compared with July 2020, the index was up by 10.4%.
  • This was the highest increase compared to the corresponding month of the preceding year since January 1975.
  • Increases inn prices of intermediate products and energy drove the index northwards.
  • Prices of intermediate goods increased 15.6% compared with July 2020 and by 2.3% month-on-month.
  • Energy prices as a whole increased by 20.4% compared with July 2020 and by 4.1% compared with June 2021.

From the U.S

There were no major stats to provide the European majors with direction late in the day.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Daimler rose by 0.39% to buck the trend on the day. BMW and Continental fell by 0.30% and by 0.22% respectively, however, with Volkswagen ending the day down by 1.09%.

It was a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 0.38% and 0.37% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas rose by 0.37%, with Soc Gen and Credit Agricole ending the day up by 0.02% and by 0.17% respectively.

It was another day in the red for the French auto sector, however. Stellantis NV and Renault fell by 1.15% and by 1.13% respectively.

Air France-KLM declined by 1.26%, while Airbus SE rose by 0.40%.

On the VIX Index

It was back into the red for the VIX on Friday, ending a 4-day winning streak.

Reversing a 0.46% gain from Thursday, the VIX slid by 14.35% to end the day at 18.56.

The NASDAQ rose by 1.19%, with the Dow and the S&P500 seeing gains of 0.65% and by 0.81% respectively.

VIX 230821 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone’s economic calendar. Prelim August private sector PMIs for France, Germany, and the Eurozone will be in focus early in the European session.

Expect plenty of influence from the numbers as the markets look to assess whether the Delta variant has impacted activity.

With consumption key to a sustainable economic recovery, Eurozone consumer sentiment figures for August will also draw attention late in the day.

From the U.S, prelim private sector PMis will also be in focus, with the Services PMI the key driver.

FOMC member chatter ahead of Jackson Hole and COVID-19 will also remain the key areas of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

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

Wall Street Week Ahead: Best Buy, Medtronic, Autodesk and Dollar General in Focus

Earnings Calendar For The Week Of August 23

Monday (August 23)

Ticker Company EPS Forecast
JD JD.com $2.69
EDU New Oriental Education Tech $0.02
RBREW Royal Unibrew A/S kr8.25
PANW Palo Alto Networks $1.43
GRUB GrubHub $0.27
MSNFY Minera Frisco ADR $0.01
TLK Telekomunikasi Indns Tbk Prshn Pp Pt $0.41
GPFOY Financiero Inbursa ADR $0.14
SUMO Sumo -$0.14
JOBS 51job $3.77
CBPO China Biologic $1.33
TV Grupo Televisa Sab $0.10

Tuesday (August 24)

IN THE SPOTLIGHT: BEST BUY, MEDTRONIC

BEST BUY: The Richfield, Minnesota consumer electronics retailer is expected to report its second-quarter earnings of $1.89 per share, which represents year-over-year growth of over 10% from $1.71 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%. The consumer electronics retailer would post year-over-year revenue growth of over 17% to $11.6 billion. According to ZACKS Research, full-year earnings to be at $8.53 per share and revenue of $49.56 billion, rising +7.84% and +4.86% year-over-year, respectively.

Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We think BBY can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given BBY’s strong track record in this arena.”

MEDTRONIC: An American-Irish medical device company, is expected to report its fiscal first-quarter earnings of $1.32 per share, which represents year-over-year growth of over 112% from $0.62 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 20% to $7.8 billion.

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 24

Ticker Company EPS Forecast
BNS Scotiabank $1.90
BMO Bank Of Montreal USA $2.93
MDT Medtronic $1.32
BBY Best Buy $1.89
HTHT Huazhu Group Limited $1.04
INTU Intuit $1.59
HEI Heico $0.55
TOL Toll Brothers $1.49
URBN Urban Outfitters $0.78
JWN Nordstrom $0.27
VNET 21Vianet -$0.31
ACH Aluminum Of China $0.22

Wednesday (August 25)

IN THE SPOTLIGHT: AUTODESK

Autodesk, a leading provider of drafting and design software for the building, and infrastructure fields is expected to report its second-quarter earnings of $1.12 per share, which represents year-over-year growth of over 14% from $0.98 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%. The San Rafael, California-based company would post year-over-year revenue growth of over 15% to $1.05 billion.

For the fiscal second quarter, the company expects revenues between $1.045 billion and $1.06 million. The company expects non-GAAP earnings of $1.08-$1.14 per share.

“Upside in resellers’ Q2 performance & forward expectations increases confidence ADSK is on track to hit revenue & billings growth guides in FY22, despite a back-end loaded year. Our ests are towards the high-end of guidance & forecast achieving $2.4B FY23 FCF target. Resume coverage at a price target of $334,” noted Keith Weiss, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 25

Ticker Company EPS Forecast
SYDB Sydbank A/S kr5.70
ATHM Autohome $6.32
RY Royal Bank Of Canada $2.70
DKS Dick’s Sporting Goods $2.83
KC Kutcho Copper -$1.34
ADSK Autodesk $1.12
SPLK Splunk -$0.69
NTAP NetApp $0.95
BOX BOX $0.18
CRM Salesforce.com $0.92
ULTA Ulta Salon Cosmetics Fragrance $2.50
SNOW Intrawest Resorts -$0.15
WSM Williams Sonoma $2.59
ASND Ascendant Resources -$2.23
SHI SinOPEC Shanghai Petrochemical $1.23
LFC China Life $0.40
PTR Petrochina $1.13
BAVA Bavarian Nordic As kr0.57
PLAN Progressive Planet -$0.14
SMTC Semtech $0.62
DY Dycom Industries $0.74
RAVN Raven Industries $0.20

Thursday (August 26)

IN THE SPOTLIGHT: DOLLAR GENERAL

The U.S. largest discount retailer by the number of stores Dollar General is expected to report a profit of $2.59 in the second quarter, which represents a year-over-year decline of about 17% from $3.12 per share seen in the same quarter a year ago.

The company’s revenue would also decline 1.5% to 8.56 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%.

“Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. Recent high-quality results add more confidence to the 10% L-T EPS growth algorithm, ramping top-line initiatives appear sustainable, and we see underappreciated margin upside from the rollout of Fresh self-distribution,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“DG’s valuation (high teens P/E multiple) presents a solid entry point as it is in line with its history despite much stronger EPS power (and below DG’s pre-COVID multiple) while a ~5x turn discount to the market. This seems unwarranted given DG’s consistent execution & outlook.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 26

Ticker Company EPS Forecast
BURL Burlington Stores $1.45
HAIN Hain Celestial $0.39
CM Canadian Imperial Bank Of Commerce USA $2.72
TD Toronto-Dominion Bank $1.53
SJM J.M. Smucker $1.88
ANF Abercrombie & Fitch $0.76
DLTR Dollar Tree $1.02
SAFM Sanderson Farms $6.38
LANC Lancaster Colony $1.31
COTY Coty -$0.06
DG Dollar General $2.59
PTON Peloton Interactive, Inc. -$0.44
HPQ HP $0.84
VMW VMware $1.65
WDAY Workday $0.78
GPS Gap $0.46
MRVL Marvell Technology $0.31

Friday (August 27)

Ticker Company EPS Forecast
ZNH China Southern Airlines -$0.77
CICHY China Construction Bank Corp $0.90
SNP China Petroleum Chemical $2.42
LEGN LEG Immobilien AG -$0.31
For a look at all of today’s economic events, check out our economic calendar.

European Equities: A Week in Review – 20/08/21

The Majors

It was a bearish week for the majors in the week ending 20th August.

The CAC40 slid by 3.91%, with the DAX30 and the EuroStoxx600 ending the week with losses of 1.06% and 1.48% respectively. For the EuroStoxx600, the loss ended a run of 4 consecutive weekly gains.

Economic data from the Eurozone was on the lighter side in the week, leaving COVID-19, U.S Stats, and the FED in focus.

Overnight FOMC meeting minutes from Wednesday sent the European majors into the deep red on Thursday.

While falling short of a taper tantrum, rising expectations of a near-term move by the FED weighed on riskier assets.

A continued spread of the Delta variant and disappointing economic data from China also weighed on the majors.

From China, industrial production increased by 6.4% in July, year-on-year. In June. industrial production had risen by 8.3%. Retail sales was up 8.5% compared with 12.1% in June.

The Stats

Eurozone employment, 2nd estimate GDP, and finalized inflation figures were in focus.

In line with 1st estimates, the Eurozone economy expanded by 2.0% in the 2nd quarter, rebounding from a 0.3% contraction in the previous quarter. While, the year-on-year, number was revised down from 13.7% to 13.6%, the numbers were good enough to support the majors.

Employment also picked up in the 2nd quarter, rising by 0.5% to reverse a 0.2% decline from the previous quarter.

On the inflation front, the Eurozone’s annual rate of inflation picked up from 1.9% to 2.2%, which was in line with prelim figures. The Eurozone’s core annual rate of inflation softened from 0.9% to 0.7%, which was also in line with prelim numbers.

From the U.S

Key stats included retail sales and jobless claims figures.

Retail sales figures disappointed. In July, retail sales fell by 1.1%, reversing a 0.7% rise from June. Economists had forecast a 0.3% decline. Core retail sales fell by 0.4% versus a forecasted 0.1% rise. In June, core retail sales rose by 1.6%.

On the positive side, however, were labor market numbers once more. In the week ending 13th August, initial jobless claims fell from 377k to 348k. Economists had forecast a decline to 363k.

On the monetary policy front, the FOMC meeting minutes from Wednesday weighed on riskier assets. FOMC member chatter also suggested an increased chance of a near-term move.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Daimler slumped by 7.66% to lead the way down, with BMW and Volkswagen ending the week down by 7.35% and 7.26% respectively. Continental saw a more modest 4.40% decline in the week.

It was also a bearish week for the banking sector. Deutsche Bank and Commerzbank fell by 4.83% and by 5.49% respectively.

From the CAC, it was a bearish week for the banks. Soc Gen slid by 6.19%, with BNP Paribas and Credit Agricole falling by 4.19% and by 4.39% respectively.

The French auto sector also struggled, with Stellantis NV and Renault sliding by 7.43% and by 7.48% respectively.

Air France-KLM and Airbus ended the week with losses of 4.94% and 4.30% respectively.

On the VIX Index

It was a back into the green for the VIX in the week ending 20th August.

Reversing a 4.33% fall from the previous week, the VIX rose by 20.13% to end the week at 18.56.

4-days in the green from 5 sessions, which included a 20.44% jump on Thursday delivered the downside. A 14.35% slide on Friday pared some of the gains, however.

For the week, the Dow fell by 1.11%, with the NASDAQ and the S&P500 ending the week down by 0.73% and by 0.59% respectively.

VIX 210821 Weeklly Chart

The Week Ahead

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

Early in the week, prelim August private sector PMIs for France, Germany, and the Eurozone will be in focus.

Expect plenty of interest in the numbers. There’s been lingering concerns over the sustainability of the economic recovery. Weak numbers would pressure the majors.

Through the remainder of the week, the German economy will be in focus.

2nd quarter GDP, business sentiment, and consumer sentiment figures will provide direction.

From the U.S, private sector PMIs, core durable goods, jobless claims, personal spending, and inflation will also influence.

On the monetary policy front, the FED will also be in the limelight once more. The FED’s annual Economic Policy Symposium is scheduled for 26th August to 28th August. With the markets expecting a tapering to the asset purchasing program, the markets will be expecting guidance on what’s to come.

Away from the economic calendar, COVID-19 news updates will also need monitoring.

Medtronic Q1 Earnings to More Than Double; Stocks Could Hit New Highs

Medtronic, an American-Irish medical device company, is expected to report its fiscal first-quarter earnings of $1.32 per share, which represents year-over-year growth of over 112% from $0.62 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 45%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 20% to $7.8 billion.

Medtronic shares have gained over 10% so far this year. The stocks ended 0.30% lower at $128.93 on Thursday. Tuesday’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions (Micra AV, EV-ICD, EPIX, RDN, Zeus/Synergy, 780G, InPen, DTM, Interstim Micro, and the soft tisssue robot),” noted Cecilia Furlong, equity analyst at Morgan Stanley.

“CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

Medtronic Stock Price Forecast

Seventeen analysts who offered stock ratings for Medtronic in the last three months forecast the average price in 12 months of $142.56 with a high forecast of $150.00 and a low forecast of $135.00.

The average price target represents a 10.57% change from the last price of $128.93. From those 17 analysts, 15 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $140 with a high of $158 under a bull scenario and $104 under the worst-case scenario. The firm gave an “Overweight” rating on the medical device company’s stock.

Several other analysts have also updated their stock outlook. BTIG raised the target price to $137 from $135. Guggenheim lifted the price target to $145 from $135. Oppenheimer upped the price target to $147 from $134.

Check out FX Empire’s earnings calendar

European Equities: A Light Economic Calendar Leaves FED Policy in Focus

Economic Calendar

Friday, 20th August

German PPI MoM JUL

The Majors

It was a particularly bearish day for the European majors on Thursday, with the majors heading for a 1st weekly loss of the month.

The CAC40 slid by 2.43%, with the DAX30 and the EuroStoxx600 falling by 1.25% and by 1.54% respectively.

From the Eurozone, there were no major stats to distract the markets.

The overnight FOMC meeting minutes from Wednesday and economic data from the U.S raised the prospects of a near-term move by the FED.

Jitters over an imminent tapering by the FED delivered the downside on the day.

The Stats

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

From the U.S

Philly FED Manufacturing and weekly jobless claims figures were in focus.

In August, the Philly FED Manufacturing Index fell from 21.9 to 19.4. Economists had forecast an increase to 23.0.

More significantly, in the week ending 13th August, jobless claims fell from 377k to 348k. Economists had forecast a decline to 363k.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. BMW and Daimler slid by 3.12% and by 3.37% respectively to lead the way down. Continental and Volkswagen ended the day down by 2.13% and by 1.81% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 2.92% and 1.93% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 3.03%, with BNP Paribas and Credit Agricole ending the day down by 2.68% and by 2.05% respectively.

Things were not much better for the French auto sector. Stellantis NV slid by 3.56%, with Renault falling by 2.60%.

Air France-KLM saw a relatively modest 1.60% decline, while Airbus SE slid by 3.15%.

On the VIX Index

It was a 4th consecutive day in the green for the VIX on Thursday.

Following a 20.44% jump on Wednesday, the VIX rose by 0.46% to end the day at 21.67.

The NASDAQ and the S&P500 rose by 0.11% and by 0.13% respectively, while the Dow slipped by 0.19%.

VIX 200821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Wholesale inflation figures from Germany are due out in the early part of the day.

We don’t expect the numbers to influence, however.

FOMC member chatter ahead of Jackson Hole and COVID-19 will remain the key areas of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 27 points.

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

Best Buy’s Q2 Earnings to Rise over 10%; Target Price $130

The Richfield, Minnesota consumer electronics retailer Best Buy is expected to report its second-quarter earnings of $1.89 per share, which represents year-over-year growth of over 10% from $1.71 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 36%. The consumer electronics retailer would post year-over-year revenue growth of over 17% to $11.6 billion.

According to ZACKS Research, full-year earnings to be at $8.53 per share and revenue of $49.56 billion, rising +7.84% and +4.86% year-over-year, respectively.

Best Buy shares have gained over 10% so far this year. The stocks ended 0.59% lower at $110.1 on Wednesday.

“We believe the company remains fundamentally undervalued and there could be room for gains in the stock going forward. Specifically, there is a 60% chance of a rise for BBY stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years,” noted analysts at Trefis.

Analyst Comments

Best Buy (BBY) is a best-in-class retailer led by a capable management team, and we are positive on the longer-term opportunity for the business and stock. BBY’s leading position in a healthy category and strength in key Retail fundamentals including merchandising, labour management, supply chain and omnichannel underpin our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We think BBY can sustain >5% EBIT margins after pulling forward its margin target by 5 years during the COVID-19 pandemic. This is reliant on generating SG&A efficiencies, which we believe are possible given BBY’s strong track record in this arena.”

Best Buy Stock Price Forecast

Sixteen analysts who offered stock ratings for Best Buy in the last three months forecast the average price in 12 months of $130.75 with a high forecast of $150.00 and a low forecast of $109.00.

The average price target represents an 18.76% change from the last price of $110.10. From those 16 analysts, nine rated “Buy”, six rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $120 with a high of $152 under a bull scenario and $86 under the worst-case scenario. The firm gave an “Equal-weight” rating on consumer electronics retailer’s stock.

Several other analysts have also updated their stock outlook. BofA Global Research raised the price objective to $145 from $132. Raymond James lifted the price objective to $135 from $130. Guggenheim upped the target price to $135 from $130.

Check out FX Empire’s earnings calendar

European Equities: A Quiet Economic Calendar Leaves U.S Data to Influence

Economic Calendar

Friday, 20th August

German PPI MoM JUL

The Majors

It was another mixed day for the European majors on Wednesday, with the EuroStoxx600 finding further support after Monday’s slip.

DAX30 and the EuroStoxx600 rose by 0.28% and by 0.14% respectively, while the CAC40 fell by 0.73%.

Economic data from the Eurozone had a muted impact on the majors, with housing sector data from the U.S also failing to move the dial.

Continued concerns over the ongoing spread of the Delta variant pegged the majors back once more,

Uncertainty over the FED’s tapering plans ahead of the FOMC meeting minutes also tested the majors on the day.

The Stats

Finalized inflation figures for the Eurozone were the key stats of the day.

In July, the Eurozone’s annual rate of inflation picked up from 1.9% to 2.2%, which was in line with prelim figures. Month-on-month, consumer prices fell by 0.1%, following a 0.3% rise in June.

The core annual rate of inflation softened from 0.9% to 0.7%, which was also in line with forecasts.

According to Eurostat,

  • The lowest annual rates were registered in Malta (+0.3%), Greece (+0.7%), and Italy (+1.0%).
  • Estonia recorded the highest annual rate of inflation of 4.9%.
  • For the euro area, the largest contribution came from energy (+1.34 pp), followed by food, alcohol, & tobacco (+0.35 pp).
  • Services contributed 0.31 pp, with non-energy industrial goods 0.17 percentage points.

From the U.S

Housing sector data for July were in focus. With the FOMC minutes due out after the European close however, the stats failed to move the dial.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Continental rose by 0.97% to buck the trend. By contrast, Daimler slid by 1.21% to lead the way down. BMW and Volkswagen ended the day down by 0.70% and by 1.12% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank ended the day with gains of 1.17% and 2.32% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.91%, with Soc Gen and Credit Agricole ending the day up by 0.59% and by 0.23% respectively.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.76%, while Renault fell by 0.40%.

Air France-KLM and Airbus SE saw relatively modest gains of 0.41% and 0.07% respectively.

On the VIX Index

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

Following an 11.10% rise on Tuesday, the VIX jumped by 20.44% to end the day at 21.57.

The Dow and the S&P500 slid by 1.08% and by 1.07% respectively, with the NASDAQ ending the day down by 0.89%.

VIX 190821 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.

The lack of stats will leave the majors to respond to the overnight FOMC meeting minutes going into the open.

Later in the day, jobless claims and Philly FED manufacturing numbers from the U.S will also influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 18 points.

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

European Equities: Eurozone Inflation and U.S Monetary Policy in Focus

Economic Calendar

Wednesday, 18th August

Eurozone Core Inflation Rate YoY Final JUL

Eurozone Inflation Rate YoY Final JUL

Friday, 20th August

German PPI MoM JUL

The Majors

It was mixed day for the European majors on Tuesday, with the EuroStoxx600 resuming its upward trajectory, albeit modestly.

The CAC40 and the DAX30 fell by 0.28 and by 0.02% respectively, while EuroStoxx600 eked out a 0.07% gain on the day.

Economic data from the Eurozone delivered support, while stats from the U.S were market negative on the day.

Anticipation of FED Chair Powell announcing tapering plans late in the day also pegged the majors back.

Away from the economic calendar, the Delta variant continued to add to market woes on the day following news of New Zealand going into full lockdown.

The Stats

2nd estimate GDP numbers for the Eurozone were in focus late in the European session.

In the 2nd quarter, the economy grew by 2.0%, which was in line with 1st estimate numbers. The economy had contracted by 0.3% in the previous quarter. Year-on-year, the economy grew by 13.6%, down from a 1st estimate 13.7%. The economy had contracted by 1.3% in the quarter prior.

From the U.S

Retail sales and industrial production figures were the key stats of the day.

In July, industrial production rose by 0.9%, month-on-month, following a 0.2% increase in June. Economists had forecast a 0.5% rise.

More significantly, U.S retail sales fell by 1.1% in July versus a forecasted 0.3% decline. In June, retail sales had risen by 0.7%.

Core retail sales declined by 0.4%, month-on-month, following a 1.6% jump in June. Economists had forecast a 0.1% rise in sales.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. Continental slid by 2.58%, with Daimler falling by 1.90%. BMW and Volkswagen ended the day down by 1.52% and by 1.31 respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 1.20% and 2.59% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 2.17%, with BNP Paribas and Credit Agricole ending the day down by 1.84% and by 1.94% respectively.

Things were not much better for the French auto sector. Stellantis NV slid by 2.72%, with Renault falling by 1.38%.

Air France-KLM and Airbus SE saw relatively modest losses of 0.61% and 0.94% respectively.

On the VIX Index

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

Following a 4.34% rise on Monday, the VIX jumped by 11.10% to end the day at 17.91.

The Dow and the S&P500 fell by 0.79% and by 0.71% respectively, with the NASDAQ ending the day down by 0.93%.

VIX 180821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Finalized July inflation figures for the Eurozone are due out later today.

Barring any marked revision to prelim figures, however, the stats should have a muted impact on the majors.

Housing sector data from the U.S should also have limited impact, as the markets look ahead to the FOMC meeting minutes. The minutes are due out after the European close…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 47 points.

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

Target Corp to Benefit From Back-To-School Sales; Stocks Could Hit New Highs

Target Corp, one of the largest North American retailers offering customers both everyday essentials and fashionables, is expected to report its second-quarter earnings of $3.49 per share, which represents year-over-year growth of over 3% from $3.38 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 69%. The Minneapolis, Minnesota-based company would post year-over-year revenue growth of over 8% to $24.84 billion.

Target Corp shares have gained about 50% so far this year. The stocks ended 0.61% higher at $263.15 on Monday. Wednesday’s better-than-expected results could help the stock hit new all-time highs.

On the other hand, the Bentonville, Arkansas-based retailer Walmart is expected to report its second-quarter earnings of $1.56 per share same as a year ago. However, the multinational retail corporation that operates a chain of hypermarkets’ revenue would decline over 1% to $135.9 billion. On average, the retail giant has beaten earnings estimates by over 17% in the last four quarters.

Analyst Comments

Walmart (WMT) & Target Corp (TGT) likely to print upside given strong comp sales trends, a healthy consumer bolstered by child tax credits, & one of the best back to school seasons in retail. We prefer TGT given prospects of a greater beat and a lower relative valuation. We also enclose: Cowen’s Target x ULTA analysis, & our online grocery survey highlights WMT’s momentum. Raise TGT price target to $300 & maintain WMT’s $170 price target,” noted Oliver Chen, equity analyst at Cowen.

“We are bullish on the back-to-school market share opportunity, and expect outsized growth at both. Both are well-positioned as their multi-category portfolios should result in benefits across apparel, electronics, school supplies, home, and other categories. That being said, we ultimately give the edge to TGT given its stronger apparel and home assortment, and overall mix of total sales towards these categories.”

Target Corp Stock Price Forecast

Eighteen analysts who offered stock ratings for Target Corp in the last three months forecast the average price in 12 months of $260.76 with a high forecast of $305.00 and a low forecast of $216.00.

The average price target represents a -0.91% change from the last price of $263.15. From those 18 analysts, 14 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $250 with a high of $290 under a bull scenario and $180 under the worst-case scenario. The firm gave an “Equal-weight” rating on the big-box retailer’s stock.

Target Corp (TGT) has firmly established itself as a winner in Retail and deserves a premium multiple vs. historical valuations. TGT is gaining market share on top of 2020’s wallet share gains, we think TGT is one of the more attractive ways to play the upside to GDP. We see a positive risk/reward skew in the N-T but results could moderate and the stock path may be uneven, keeping us Equal-weight,” noted Simeon Gutman, equity analyst at Morgan Stanley.

Several other analysts have also updated their stock outlook. Telsey Advisory Group raised the stock price forecast to $305 from $265. Deutsche Bank lifted the price target to $305 from $258. JPMorgan upped the target price to $280 from $260.

Check out FX Empire’s earnings calendar

European Equities: Eurozone GDP and U.S Retail Sales to Test the Majors

Economic Calendar

Tuesday, 17th August

Eurozone Employment Change QoQ Prel Q2

Eurozone GDP Growth Rate 2nd Est Q2

Wednesday, 18th August

Eurozone Core Inflation Rate YoY Final JUL

Eurozone Inflation Rate YoY Final JUL

Friday, 20th August

German PPI MoM JUL

The Majors

It was a bearish day for the European majors on Monday, with the EuroStoxx600 seeing its 10-day winning streak come to an end.

The CAC40 and the EuroStoxx600 fell by 0.83% and by 0.44% respectively, with DAX30 ending the day down by 0.32%.

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

Economic data from China and the U.S did influence, however.

Key stats from China included industrial production, fixed asset investment, and retail sales. All three stats disappointed, leading the pullback on the day.

In July, industrial production was up 6.4% year-on-year, which was softer than and 8.3% increase in June. Retail sales rose by 8.5% compared with 12.1% in June. Fixed asset investment increased 10.3%, year-to-date, compared with 12.6% in June.

The Stats

There were no major stats from the Eurozone at the start of the week.

From the U.S

NY Empire State Manufacturing figures were in focus late in the European session.

In August, the NY Empire State Manufacturing Index slid from 43.0 to 18.3. Economists had forecast a fall to 29.0.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Monday. BMW and Volkswagen slid by 1.91% and by 2.14% respectively, with Daimler falling by 1.78%. Continental saw a more modest 0.48% loss on the day.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank ended the day down by 1.55% and by 2.90% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 1.71%, with BNP Paribas and Credit Agricole ending the day down by 0.97% and 0.89% respectively.

It also a bearish day for the French auto sector. Stellantis NV and Renault fell by 1.44% and by 2.18% respectively.

Air France-KLM and Airbus SE ended the day with losses of 1.96% and 0.71% respectively.

On the VIX Index

It was back into the green for the VIX on Monday, ending a 3-day losing streak.

Reversing a 0.90% decline from Friday, the VIX rose by 4.34% to end the day at 16.12.

The Dow and the S&P500 saw gains of 0.31% and 0.26% respectively, while the NASDAQ ended the day down by 0.20%.

VIX 170821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. 2nd estimate GDP numbers for the Eurozone are due out along with 2nd quarter employment change figures.

Expect any revisions to the 2nd quarter GDP numbers to be of greater influence.

From the U.S, retail sales figures will also provide direction later in the European session.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 37 points.

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

Nvidia’s Q2 Revenue to Jump Over 60%, Earnings Could Disappoint

The Santa Clara, California- based multinational technology company, Nvidia is expected to report its second-quarter earnings of $1.02 per share, which represents year-over-year growth of over 50% from $2.18 per share seen in the same period a year ago.

The company, which designs graphics processing units for the gaming and professional markets, as well as system on a chip unit for the mobile computing and automotive market would post year-over-year revenue growth of over 60% to $6.3 billion. The company has delivered an earnings surprise in each of the last four consecutive quarters.

Nvidia shares have gained over 54% so far this year. The stocks ended 1.42% higher at $201.88 on Friday. But next week’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

Nvidia stock has seen an impressive rise of 5% over the past week and currently trades at $206 per share. This rally was driven by expectations of strong earnings growth in the company’s upcoming Q2 2022 results, expected later this month. For Q1 2022, Nvidia posted stellar revenue growth, with revenue rising to $5.66 billion from$3.08 billion in Q1 2021, which helped drive the company’s net income to $1.91 billion from $917 million over this period. The strong jump in earnings came due to a combination of shrewd expense control and a slightly lower effective tax rate,” noted analysts at Trefis.

“After the recent rally, will Nvidia stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for Nvidia stock average close to 2.1% in the next one-month (21 trading days) period after experiencing a 5% rise over the previous one-week (five trading days) period.”

Nvidia Stock Price Forecast

Twenty-nine analysts who offered stock ratings for Nvidia in the last three months forecast the average price in 12 months of $209.42 with a high forecast of $250.00 and a low forecast of $150.00.

The average price target represents a 3.73% change from the last price of $201.88. From those 29 analysts, 28 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

UBS raised the price target to $230 from $184. BofA lifted the price objective to $250 from $225. JPMorgan increased the price target to $215 from $176. Several other analysts have also updated their stock outlook. Wells Fargo raised the price target to $245 from $219.

Check out FX Empire’s earnings calendar

European Equities: A Quiet Start to the Week Leaves Data from China to Set the Tone

Economic Calendar

Tuesday, 17th August

Eurozone Employment Change QoQ Prel Q2

Eurozone GDP Growth Rate 2nd Est Q2

Wednesday, 18th August

Eurozone Core Inflation Rate YoY Final JUL

Eurozone Inflation Rate YoY Final JUL

Friday, 20th August

German PPI MoM JUL

The Majors

It was another relatively bullish day for the European majors on Friday, with the EuroStoxx600 up for a 10th consecutive day.

The CAC40 and the EuroStoxx600 rose by 0.20 and by 0.21% respectively, with DAX30 ending the day up by 0.25%.

Economic data from the U.S was market friendly once more, with consumer sentiment sinking according to prelim figures for August.

Following the disappointing U.S inflation figures from Wednesday, Friday’s stats further suggested the need for the FED to stand pat.

Stats from the Eurozone provided support, with Eurozone trade data pointing to improving trade terms.

COVID-19 remained a major concern, however. A continued rise in new cases globally has raised uncertainty over the economic outlook.

The Stats

Economic data was on the busier side this morning, with French inflation and Eurozone trade data in focus.

In June, the Eurozone’s trade surplus widened from €7.5bn to €18.1bn. Economists had forecast a widening to €18.2bn.

According to Eurostat,

  • Euro area goods exports to the rest of the world rose by 23.8% to €209.9bn compared with June 2020.
  • Imports from the rest of the world increased by 28.2% to €191.8bn.
  • In January to June 2021, intra-euro area trade rose by 20.3% when compared with January to June 2020.
  • Euro area goods exports increased by 15.5% in January-June 2021, when compared with January-June 2020. Imports rose by 15.2%.

Inflation figures from France had a muted impact on the majors, however. In July, France’s annual rate of inflation softened from 1.5% to 1.2%, which was in line with prelim figures.

From the U.S

Consumer sentiment figures for August were out late in the European session.

According to prelim figures, the Michigan Consumer Sentiment Index slid from 81.2 to 702. Economists had forecast an increase to 81.5. The Michigan Consumer Expectations Index also took a hit, falling from 79.0 to 65.2.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Continental bucked the trend, rising by 1.11%. BMW and Daimler fell by 0.32% and by 0.26% respectively, with Volkswagen down by 0.51%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank ended the day with gains of 0.50% and 0.04% respectively.

From the CAC, it was a mixed day for the banks. Soc Gen slipped by 0.04%, while BNP Paribas and Credit Agricole ended the day up by 0.11% and 0.42% respectively.

It another mixed day for the French auto sector. Stellantis NV rose by 0.61%, while Renault fell by 0.61%.

Air France-KLM also saw red, falling by 0.54%, while Airbus SE ended the day up by 0.12%.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX on Friday.

Following a 2.93% decline on Thursday, the VIX fell by 0.90% to end the day at 15.45.

The Dow and the NASDAQ both rose by 0.04%, with the S&P500 ending the day up by 0.16%.

VIX 160821 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar. There are no material stats to provide the majors with direction at the start of the week.

From the U.S, NY Empire State Manufacturing data will draw some interest late in the session.

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

Industrial production, fixed asset investment, retail sales, and unemployment figures are due out this morning.

Away from the economic calendar, news from Capitol Hill, COVID-19 updates, and FOMC member chatter will also need monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 45 points.

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

Earnings to Watch Next Week: Home Depot, Walmart, Target and Deere in Focus

Earnings Calendar For The Week Of August 16

Monday (August 16)

Ticker Company EPS Forecast
ATAI ATA -$0.18
FN Fabrinet $1.21
AG First Majestic Silver $0.09
TOELY Tokyo Electron Ltd PK $1.22

Tuesday (August 17)

IN THE SPOTLIGHT: HOME DEPOT, WALMART

HOME DEPOT: the largest home improvement retailer in the United States, is expected to report its second-quarter earnings of $4.42 per share, which represents year-over-year growth of about 10% from $4.02 per share seen in the same period a year ago.

The home improvement retailer would post revenue growth of nearly 7% to $40.68 billion. On average, Home Depot has beaten earnings estimates by more than 10% in the last four quarters.

“We are Overweight Home Depot (HD) given its best-in-class nature and structural housing tailwinds beyond N-T disruption from COVID-19. The stock seems attractively valued in the context of a potential 2H’20/2021 economic/housing boom,” noted Simeon Gutman, equity analyst at Morgan Stanley.

WALMART: The Bentonville, Arkansas-based retailer is expected to report its second-quarter earnings of $1.56 per share same as a year ago. However, the multinational retail corporation that operates a chain of hypermarkets’ revenue would decline over 1% to $135.9 billion. On average, the retail giant has beaten earnings estimates by over 17% in the last four quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 17

Ticker Company EPS Forecast
AIT Applied Industrial Technologies $1.17
HD Home Depot $4.42
WMT Walmart $1.57
AMCR Amcor PLC $0.22
A Agilent $0.99
CDK Cdk Global $0.67
JKHY Jack Henry Associates $0.93
CREE Cree -$0.24

Wednesday (August 18)

IN THE SPOTLIGHT: TARGET

TARGET: One of the largest North American retailers offering customers both everyday essentials and fashionables, is expected to report its second-quarter earnings of $3.49 per share, which represents year-over-year growth of over 3% from $3.38 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 69%. The Minneapolis, Minnesota-based company would post year-over-year revenue growth of over 8% to $24.84 billion.

Walmart (WMT) & Target (TGT) likely to print upside given strong comp sales trends, a healthy consumer bolstered by child tax credits, & one of the best back to school seasons in retail. We prefer TGT given prospects of a greater beat and a lower relative valuation. We also enclose: Cowen’s Target x ULTA analysis, & our online grocery survey highlights WMT’s momentum. Raise TGT PT to $300 & maintain WMT’s $170 PT,” noted Oliver Chen, equity analyst at Cowen.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 18

Ticker Company EPS Forecast
LOW Lowe’s Companies $3.99
TGT Target $3.49
ADI Analog Devices $1.61
EAT Brinker International $1.71
TJX TJX Companies $0.58
VIPS Vipshop $2.32
YY YY -$0.60
NVDA Nvidia $1.02
KEYS Keysight Technologies $1.44
SNPS Synopsys $1.78
CSCO Cisco Systems $0.83
SQM Sociedad Quimica Y Minera De Chile $0.32
VNET 21Vianet -$0.06
TCEHY Tencent $0.52
MBT Mobile TeleSystems OJSC $20.23

Thursday (August 19)

IN THE SPOTLIGHT: KOHL’S

Kohl’s, the largest department store chain in the United States, is expected to report its second-quarter earnings of $1.17 per share, which represents year-over-year growth of over 565% from a loss of -$0.25 per share seen in the same period a year ago.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE AUGUST 19

Ticker Company EPS Forecast
KSS Kohl’s $1.17
TPR Tapestry Inc $0.68
EL Estée Lauder $0.51
M Macy’s $0.19
BJ BJs Wholesale Club Holdings Inc $0.63
MSGS Madison Square Garden Sports -$0.76
AMAT Applied Materials $1.77
ROST Ross Stores $0.97
FTCH Farfetch -$0.30
NCMGY Newcrest Mining Ltd PK $0.75
GFI Gold Fields $0.47

Friday (August 20)

IN THE SPOTLIGHT: DEERE

Deere & Company, the world’s largest maker of farm equipment, is expected to report its fiscal third-quarter earnings of $4.57 per share, which represents year-over-year growth of over 77% from $2.57 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the agricultural, construction, and forestry equipment manufacturer has delivered an earnings surprise of over 65%. The company forecasts net income for fiscal 2021 in the range of $5.3 billion to $5.7 billion, up from the previous projection of $4.6 billion to $5 billion, according to ZACKS Research.

Deere (DE) is one of the highest quality, most defensive names within the broader Machinery universe, given a historically lower cyclicality of Ag Equipment and history of strong management execution. FY21 should mark a tangible acceleration in the NA large ag replacement cycle, as commodity tailwinds are complemented by moderating trade headwinds and improving farmer sentiment,” noted Courtney Yakavonis, equity analyst at Morgan Stanley.

“With mgmt continuing to execute against its 15% mid-cycle operating margin target, we see continued momentum in DE’s margin improvement narrative – representing one of the most attractive idiosyncratic margin improvement narratives in the broader Machinery group.”

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

Ticker Company EPS Forecast
DE Deere & Company $4.57
BKE Buckle $0.51
FL Foot Locker $0.97

 

European Equities: A Week in Review – 13/08/21

The Majors

It was another bullish week for the majors in the week ending 13th August.

The CAC40 rose by 1.16%, with the DAX30 and the EuroStoxx600 ending the week with gains of 1.37% and 1.25% respectively. Friday’s gains delivered a 10th consecutive day in the green for the EuroStoxx600

A marked shift in sentiment towards FED monetary policy delivered support for the majors in the 2nd half of the week.

U.S inflation figures came in softer than expected, dampening expectations of an imminent FED move following the NFP numbers. Weekly labor market numbers and consumer sentiment figures also contributed to the shift in sentiment.

A continued rise in new Delta variant cases and mixed economic data from the Eurozone did limit the upside, however.

The Stats

It was a mixed set of numbers on the economic data front.

German and Eurozone trade and economic sentiment figures drew plenty of attention.

Germany’s trade surplus widened from €12.5bn to €16.3bn, with the Eurozone’s widening from €12.3bn to €18.1bn.

Economic sentiment figures were disappointing, however.

Germany’s ZEW Economic Sentiment Index fell from 63.3 to 40.4 in August. The Eurozone’s Index slid from 61.2 to 41.7.

Also negative was an unexpected fall in Eurozone industrial production, which declined by 0.3% in June. Production had fallen by 1.1% in May.

From the U.S

Key stats in the week included inflation, jobless claims, and consumer sentiment figures.

In July, inflation numbers came in softer than expected, with the core annual rate of inflation softening from 4.5% to 4.3%.

While the annual rate of inflation held steady at 5.4%, however, consumer prices rose by just 0.5% in July. In June, consumer prices had risen by 0.9%.

Weekly jobless claims fell from 387k to 375k in the week ending 6th August. Economists had forecast a decline to 365k.

All in all, the numbers looked to have eased pressure on the FED following the impressive NFP numbers from the week prior.

At the end of the week, consumer sentiment added further downward pressure on the greenback.

According to prelim figures, the Michigan Consumer Sentiment Index slid from 81.2 to 702. Economists had forecast an increase to 81.5. The Michigan Consumer Expectations Index also took a hit, falling from 79.0 to 65.2.

The Market Movers

From the DAX, it was another mixed week for the auto sector. Daimler fell by 0.66% to buck the trend in the week. Continental led the way, however, rallying by 2.27%. BMW and Volkswagen ended the week up by 1.24% and 0.36% respectively.

It was a bullish week for the banking sector, however. Deutsche Bank rose by 1.62%, with Commerzbank gaining 2.82%.

From the CAC, it was a mixed week for the banks. Soc Gen slipped by 0.29%, while BNP Paribas and Credit Agricole rose by 0.70% and by 0.08% respectively.

The French auto sector also had mixed fortunes. Stellantis NV rallied by 4.12%, while Renault fell by 1.81%.

Air France-KLM and Airbus ended the week with losses of 1.37% and 1.25% respectively.

On the VIX Index

It was a 2nd consecutive week in the red for the VIX.

In the week ending 13th August, the VIX fell by 4.33%. Following an 11.46% slide from the previous week, the VIX ended the week at 15.45.

3-days in the red from 5 sessions, which included a 4.35% fall on Wednesday delivered the downside.

For the week, the NASDAQ slipped by 0.09%, while the Dow and the S&P500 ended the week up by 0.87% and by 0.71% respectively.

The Week Ahead

It’s a quiet week ahead on the economic calendar.

Key stats include 2nd estimate GDP numbers for the Eurozone and finalized Eurozone inflation figures for July.

Expect any revisions to the GDP numbers to be key.

Other stats include employment figures for the Eurozone, which will likely have a muted impact on the EUR.

From the U.S, retail sales, weekly jobless claims, and Philly FED Manufacturing figures will be key.

Barring dire numbers, industrial production and NY Empire State Manufacturing data should have limited impact on the majors.

At the start of the week, expect economic data from China to set the tone. Key stats include industrial production, retail sales, fixed asset investment and unemployment figures.

On the monetary policy front, the FOMC meeting minutes released overnight on Wednesday will also influence.

Away from the economic calendar, COVID-19 news updates will also need monitoring.

Deere Could Hit New All-Time High on Strong Q3 Earnings; Target Price $421

Deere & Company, the world’s largest maker of farm equipment, is expected to report its fiscal third-quarter earnings of $4.57 per share, which represents year-over-year growth of over 77% from $2.57 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the agricultural, construction, and forestry equipment manufacturer has delivered an earnings surprise of over 65%. The company forecasts net income for fiscal 2021 in the range of $5.3 billion to $5.7 billion, up from the previous projection of $4.6 billion to $5 billion, according to ZACKS Research.

Deere shares have gained over 43% so far this year. The stocks traded 0.26% lower at $384.56 on Friday. But next week’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

Deere (DE) is one of the highest quality, most defensive names within the broader Machinery universe, given a historically lower cyclicality of Ag Equipment and history of strong management execution. FY21 should mark a tangible acceleration in the NA large ag replacement cycle, as commodity tailwinds are complemented by moderating trade headwinds and improving farmer sentiment,” noted Courtney Yakavonis, equity analyst at Morgan Stanley.

“With mgmt continuing to execute against its 15% mid-cycle operating margin target, we see continued momentum in DE’s margin improvement narrative – representing one of the most attractive idiosyncratic margin improvement narratives in the broader Machinery group.”

Deere Stock Price Forecast

Eleven analysts who offered stock ratings for Deere in the last three months forecast the average price in 12 months of $421.50 with a high forecast of $450.00 and a low forecast of $346.00.

The average price target represents a 9.61% change from the last price of $384.54. From those 11 analysts, eight rated “Buy”, two rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $442 with a high of $646 under a bull scenario and $209 under the worst-case scenario. The firm gave an “Overweight” rating on the farm equipment maker’s stock.

Several other analysts have also updated their stock outlook. Credit Suisse raised the target price to $439 from $427. JPMorgan lifted the target price to $346 from $330. UBS increased the target price to $391 from $360.

Check out FX Empire’s earnings calendar

Home Depot’s Q1 Earnings to Rise 10%, Revenue to Jump 7%

Home Depot Inc, the largest home improvement retailer in the United States, is expected to report its second-quarter earnings of $4.42 per share, which represents year-over-year growth of about 10% from $4.02 per share seen in the same period a year ago.

The home improvement retailer would post revenue growth of nearly 7% to $40.68 billion. On average, Home Depot has beaten earnings estimates by more than 10% in the last four quarters.

Home Depot shares have gained over 65% so far this year. The stock closed about 1% lower at $334.02 on Thursday. Home Depot’s better-than-expected results, which will be announced on Aug 17, could help the stock hit new all-time highs. But the stock’s performance could hinge on margins.

As reported previously, the home improvement giant earned $3.86 per share, beating Wall Street’s expectation of $0.93, and its revenue grew 32.7% year-over-year to $37.5 billion, more than $5 billion above consensus. Globally, sales grew 31%, while U.S. sales grew 29%.

Analyst Comments

“We are Overweight Home Depot (HD) given its best-in-class nature and structural housing tailwinds beyond N-T disruption from COVID-19. The stock seems attractively valued in the context of a potential 2H’20/2021 economic/housing boom,” noted Simeon Gutman, equity analyst at Morgan Stanley.

Home Depot Stock Price Forecast

Fourteen analysts who offered stock ratings for Home Depot in the last three months forecast the average price in 12 months of $349.83 with a high forecast of $386.00 and a low forecast of $310.00.

The average price target represents a 4.73% change from the last price of $334.02. From those 14 analysts, 10 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $345 with a high of $430 under a bull scenario and $220 under the worst-case scenario. The firm gave an “Overweight” rating on the home improvement retailer’s stock.

Several other analysts have also updated their stock outlook. Jefferies raised the target price to $380 from $375. Credit Suisse lifted the price target to $357 from $330. Mizuho upped the price objective to $50 from $45.

Check out FX Empire’s earnings calendar

European Equities: Eurozone Trade Data and U.S Consumer Sentiment in Focus

Economic Calendar

Friday, 13th August

France Inflation Rate YoY Final JUL

Eurozone Balance of Trade JUN

The Majors

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

The CAC40 and the EuroStoxx600 by 0.36% and by 0.11% respectively, with DAX30 ending the day up by 0.70%.

For the EuroStoxx600, it was a 9th consecutive daily gain on Thursday, with market optimism muting concerns over the upward trend in new COVID-19 cases.

Economic data from the U.S was market friendly once more, with jobless claims failing to see a material decline.

Stats from the Eurozone had a relatively muted impact on the majors in spite of another fall in Eurozone industrial production.

The Stats

Economic data was on the lighter side once more on Thursday, with industrial production figures in focus.

Across the Eurozone, industrial production fell by 0.3% in June, month-on-month, following a 1.1% decline in May. Economists had forecast for production to stall at the end of the quarter.

According to Eurostat,

  • Production of capital goods fell by 1.5% and energy by 0.6%.
  • There were increases in production of durable consumer goods (+0.1%) and intermediate goods (+0.1%).
  • Non-durable goods production led the way, however, surging by 1.6%.
  • Among the member states, Ireland reported the largest fall (-4.4%) followed by Portugal (-2.6%).
  • Malta (+5.2%), the Netherlands (+3.3%), and Estonia (+3.2%) registered the largest increases, however.
  • Compared with June 2020, production was up 9.7%, softening from a 20.6% jump in May.

From the U.S

It was another relatively quiet but important day on the economic calendar.

Wholesale inflation and weekly jobless claims figures were in focus later in the European session.

In July, the producer price index rose by 1.0%, following a 1.0% increase in June. Economists had forecast a 0.7% increase.

More significantly, however, was a modest fall in initial jobless claims from 387k to 375k in the week ending 6th August. Economists had forecast a fall to 365k.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. BMW and Volkswagen rallied by 1.34% and by 1.52% respectively, with Daimler up by 1.16%. Continental saw a more modest gain of 0.41%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank ended the day with losses of 0.59% and 0.22% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 0.82%, with Credit Agricole and Soc Gen ending the day down by 0.67% and 0.60% respectively.

It a mixed day for the French auto sector. Stellantis NV rallied by 2.66%, while Renault slipped by 0.04%.

Air France-KLM and Airbus SE ended the day with losses of 0.71% and 0.36% respectively.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Thursday.

Following a 4.35% decline on Wednesday, the VIX fell by 2.93% to end the day at 15.59.

The Dow rose by 0.04%, with the NASDAQ and the S&P500 ending the day up by 0.35% and by 0.30% respectively.

VIX 130821 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar. Trade data for the Eurozone will be out later today. With little else for the markets to consider, expect some influence from the numbers.

Wholesale inflation figures from Germany and finalized inflation figures from France are also due out. We don’t expect the numbers to have a material impact on the majors, however.

From the U.S, consumer sentiment figures for August will also draw interest.

On the monetary policy front, expect any central bank chatter to also influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 16 points, with the DAX up by 3.

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

eBay Tops Earnings Estimates, Misses on Revenue

The e-commerce leader for physical and digital merchandise, eBay reported better-than-expected earnings in the second quarter but revenue fell short of analysts’ expectations.

The San Jose, California-based e-commerce giant reported quarterly adjusted earnings (EPS) of $0.99 ​ per share, beating the Wall Street consensus estimates of $0.97 per share. But the company’s revenue plunged about 7% to $2.67 billion from a year earlier. That was also lower than the market expectations of $2.97 billion.

eBay forecasts revenue in the range of $2.42 billion to $2.47 billion in the third quarter. eBay’s Board of Directors has also declared a cash dividend of $0.18 per share of the company’s common stock.

eBay shares gained over 1% to $68.03 on Wednesday. The stock has gained over 30% so far this year

Analyst Comments

“Narrow-moat eBay topped consensus estimates for revenue and adjusted EPS in the second quarter, with $2.7 billion and $0.99 per share narrowly eclipsing FactSet consensus estimates of $2.6 billion and $0.96. Results presented mixed signals for investors, with revenue up 11% on a foreign exchange-neutral basis (largely attributable to better-than-expected managed payments penetration) but with the firm seeing softness in promoted listings monetization (down about 7% sequentially by our calculations) and active buyer growth (down 2% from a year ago) to 159 million,” noted Sean Dunlop, equity analyst at Morningstar.

“As the dust settles from a slew of recent corporate actions, including the divestiture of the eBay classifieds business in June and the anticipated sale of eBay’s South Korean marketplace, we anticipate raising our fair value estimate a mid-single-digit percentage, but note shares look fully valued at prevailing market prices.”

eBay Stock Price Forecast

Five analysts who offered stock ratings for eBay in the last three months forecast the average price in 12 months of $75.20 with a high forecast of $81.00 and a low forecast of $65.00.

The average price target represents a 10.56% change from the last price of $68.02. From those five analysts, four rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Piper Sandler cut the price objective to $79 from $81. Credit Suisse raised the stock price forecast to $80 from $78. Evercore ISI lifted the target price to $70 from $66. UBS upped the price target to $67 from $65. Piper Sandler raised the target price to $81 from $71.

Check out FX Empire’s earnings calendar

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

Economic Calendar

Thursday, 12th August

Eurozone Industrial Production YoY JUN

Eurozone Industrial Production MoM JUN

Friday, 13th August

France Inflation Rate YoY Final JUL

Eurozone Balance of Trade JUN

The Majors

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

The CAC40 and the EuroStoxx600 rose by 0.55% and by 0.42% respectively, with DAX30 ending the day up by 0.35%.

Economic data from the Eurozone was on the lighter side, with stats limited to finalized inflation figures from Germany and Italy.

The numbers had a muted impact on the majors, with the markets looking ahead to inflation figures from the U.S.

Market friendly U.S inflation figures delivered the majors with support.

The Stats

Economic data was on the lighter side once more on Wednesday, with inflation figures in focus.

Germany’s annual rate of inflation picked up from 2.3% to 3.8% in July, which was in line with prelim figures.

Italy’s annual rate of inflation accelerated from 1.3% to 1.9%, which was up from a prelim 1.8%.

From the U.S

It was a relatively quiet but important day on the economic calendar.

Inflation figures for July were in focus late in the European session.

In July, the annual rate of inflation held steady at 5.4%, which was in line with forecasts. The core annual rate of inflation softened from 4.5% to 4.3%.

Month-on-month, core consumer prices rose by 0.3% versus a forecasted 0.5% increase. In June, core consumer prices had risen by 0.9%.

Consumer prices also rose at a slower pace, with prices up 0.5% versus a forecasted 0.6% increase. In June, consumer prices had risen by 0.9%.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Wednesday. BMW and Daimler rose by 0.47% and by 0.61% respectively, with Continental gaining 0.23%. Volkswagen bucked the trend, however, falling by 13%.

It was a bullish day for the banks. Deutsche Bank rose by 0.69%, with Commerzbank gaining by 1.32%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas rose by 1.39%, with Credit Agricole and Soc Gen seeing gains of 0.59% and 0.78% respectively.

It also a relatively bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 0.38% and by 0.79% respectively.

Air France-KLM found much-needed support, rising by 1.07%, with Airbus SE gaining 0.49%.

On the VIX Index

It was back into the red for the VIX on Wednesday, giving up gains from earlier in the week.

Reversing a 0.42% gain from Tuesday, the VIX fell by 4.35% to end the day at 16.06.

The NASDAQ fell by 0.16%, while the Dow and the S&P500 ended the day up by 0.62% and by 0.25% respectively.

VIX 120821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Industrial production figures for the Eurozone are due out later today. With little else for the markets to consider, expect the numbers to influence.

Later in the day, however, weekly jobless claims data will be the key stats of the day.

Following softer inflation figures on Wednesday, the markets will be looking for more clues on what to expect from the FED.

On the monetary policy front, also expect any central bank chatter to have a greater influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 9 points, with the DAX up by 26.

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