European Equities: A Month in Review – July 2021

The Majors

It was another bullish month for the European majors in July, logging a 6th consecutive monthly gain.

The CAC40 and the EuroStoxx600 rose by 1.61% and by 1.97% respectively, while the DAX30 struggled, rising by just 0.09%.

It was a choppier month for the European majors. Concerns over the resilience of the economic recovery tested support for the majors at the start of the 3rd quarter of the year.

A continued rise in new COVID-19 cases across the world added to the market angst in the month.

Economic data from Germany was also disappointing, pegging the DAX30 back.

Central bank assurance of support, dip buying, corporate earnings, and economic data for France and the Eurozone delivered support, however.

The Stats

Key stats in the month included inflation, consumer spending, consumer sentiment, private sector PMIs, and 2nd quarter GDP numbers.

Once more, the stats were skewed to the positive, delivering support to the broader market.

The Private Sector

The Eurozone’s composite PMI rose from 59.5 to 60.6 in July, according to prelim numbers. Service sector activity picked up, delivering the upside at composite level.

Germany’s Manufacturing PMI increased from 65.1 to 65.6, which was key as private sector activity across France saw slower growth.

As a result of weak numbers from France, the Eurozone’s Manufacturing PMI fell from 63.4 to 62.6.

The German Economy

From Germany, while survey-based numbers were upbeat, non-survey-based data disappointed in the month.

Factory orders (-3.7%) and industrial production (-0.30%) were weak, with Germany’s trade surplus narrowing from 15.9bn to 12.6bn EUR.

German business and consumer confidence also failed to impress in spite of the reopening of the economy. Rising cases of the Delta variant across the world raised uncertainties over the economic outlook in the month.

Late in the month, 1st estimate GDP numbers for the 2nd quarter were also in focus.

The German economy expanded by 1.5%, quarter-on-quarter, partially reversing a 2.1% contraction from the previous quarter. Economists had forecast 1.9% growth.

A positive in the week, however, was a fall in the unemployment rate from 5.9% to 5.7%, which should support consumption.

The Eurozone

For the Eurozone, the economy expanded by 2.00% in the 2nd quarter, reversing a 0.3% contraction from the previous quarter.

The numbers were aligned with the ECB’s optimistic outlook on the economic recovery.

Inflation

In the month, the ECB also revised its price stability target, increasing the inflation target to 2.0%. The move was viewed as dovish, giving the ECB more legroom before having to make a move on the policy front.

In spite of this, the Eurozone’s annual rate of inflation accelerated from 1.9% to 2.2% in July, according to prelim figures.

From the U.S

Economic data delivered mixed results for the markets.

Inflationary pressures continued to build, though following assurances from the FED, failed to spook the markets.

The market’s preferred ISM private sector PMIs for June were disappointing for June, which raised concerns over the economic recovery.

Weekly jobless claim figures also failed to impress, with claims falling to a month low 360k before climbing to a high 419k.

In the final week of the month, consumer confidence and 2nd quarter GDP numbers delivered mixed results.

Consumer confidence picked up in July, suggesting a further increase in consumption. In June, retail sales had risen by a modest 0.5%. On the economic growth front, however, the U.S economy grew by just 6.5% in the quarter, falling well short of a forecasted 8.5%.

Monetary Policy

In July, both the ECB and the FED left monetary policy unchanged. Both central banks delivered assurances of unwavering support, ultimately propping up the European majors in the month.

The Market Movers

For the DAX: It was a bearish month for the auto sector in June. Continental and BMW slid by 7.88% and by 6.09% respectively. Daimler and Volkswagen ended the month down by 0.44% and by 2.49% respectively.

It was also a bearish month for the banks. Deutsche Bank fell by 2.86%, with Commerzbank sliding by 9.03%.

From the CAC, it was a bearish month for the banking sector. BNP Paribas fell by 2.69%, with Credit Agricole and Soc Gen seeing losses of 0.42% and 0.52% respectively.

It was also a bearish month for the auto sector. Renault slid by 6.02%, with Stellantis NV ending the month down by 2.20%.

Air France-KLM fell by a further 3.71%, while Airbus SE rallied by 6.69%.

On the VIX Index

It was a first monthly gain in 6-months for the VIX in July.

Reversing a 5.55% loss from June, the VIX rose by 15.22% to end the month at 18.24.

In July, the S&P500 rallied by 2.27%, with the Dow and the NASDAQ ending the month up by 1.25% and by 1.16% respectively.

VIX 310721 Monthly Chart

The Month Ahead

Following some mixed numbers from Germany, we can expect increased sensitivity to the German numbers in the month ahead.

Private sector PMIs will also remain key, with any fall back in private sector PMIs likely to test support for the majors.

Following the latest spike in inflation, a further pickup in inflationary pressure will also raise questions over consumption. As a key component of the economic recovery, any concerns over consumption would also pressure the majors.

From the U.S, labor market numbers will now be the key area of focus as inflationary pressures continue to pick up.

Consumer confidence and consumption numbers will need to impress to support riskier assets.

From elsewhere, private sector PMIs and trade data from China will also need tracking.

Away from the economic calendar, COVID-19 news will also need monitoring. As new cases continued to rise in July, the threat of a vaccine resilient variant remains, which would materially impact the growth outlook.

European Equities: A Week in Review – 30/07/21

The Majors

It was another choppy week for the majors in the week ending 30th July, with the majors taking another slide to kickstart the week.

The DAX30 fell by 0.80%, while the CAC40 and the EuroStoxx600 ended the week with relatively modest gains of 0.67% and 0.05% respectively.

Concern over the continued rise in new Delta variant cases weighed on the markets and sentiment towards the economic outlook.

Mixed economic data from Germany, in particular, also pressured the markets in the week.

There were a number of support avenues for the majors, however.

Upward growth revisions from the IMF for advanced economies, a dovish FED, and corporate earnings provided support.

GDP numbers from France and the Eurozone were also ahead of forecasts at the end of the week. The data limited the damage in what was a bearish end to the week.

The Stats

Through much of the week, the German economy was in focus.

Business and consumer sentiment figures delivered mixed results. While business sentiment waned in July, consumer confidence remained unchanged, in spite of the reopening of economies.

Unemployment figures from Germany were upbeat. The unemployment fell from 5.9% to 5.7% in July.

Inflationary pressures continued to surge, however, with Germany’s annual rate of inflation accelerating in July to 3.8%.

At the end of the week, 1st estimate GDP numbers and prelim inflation figures were the key stats of the week.

Quarter-on-quarter, the French economy grew by 0.9% versus a forecasted 0.7% in the 2nd quarter.

Germany saw growth of 1.5%, falling short of a forecasted 1.9%. In the 1st quarter, the economy had contracted by 2.1%.

For the Eurozone, the economy grew by 2.0%, coming in ahead of a forecasted 1.5%. The economy had contracted by 0.3% in the previous quarter.

Inflation also ticked up, aligned with member state numbers. According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 1.9% to 2.2% in July, rising above the ECB’s 2% target.

From the U.S

Consumer sentiment and durable goods orders drew attention early in the week.

In June, durable goods orders ex transportation rose by 0.3%, following a 0.5% increase in May.

More significantly was a pickup in consumer confidence in July. The CB Consumer Confidence Index rose from 128.9 to 129.1. Economists had forecast a decline to 126.0.

On Thursday, jobless claims and 2nd quarter GDP numbers were in focus. The stats were skewed to the negative, however.

In the 2nd quarter, the U.S economy grew by 6.5%. This fell well short of a forecasted growth of 8.5%.

Jobless claims also fell short of expectations, with initial jobless claims falling from 424k to 400k. Economists had forecast a decline to 370k.

At the end of the week, personal spending and inflation figures came in ahead of forecasts, however.

Personal spending rose by 1.0% in June, with the annual rate of inflation seeing a pickup from 3.4% to 3.5%.

While the stats were material, the FED monetary policy and press conference were the main events of the week.

In line with market expectations, the FED left policy unchanged. The FED Chair also looked to assure the markets that there would be no near-term moves, the guidance considered dovish.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Daimler rose by 0.32% to buck the trend in the week. Continental slid by 2.49% to lead the way down, however. BMW and Volkswagen also struggled, ending the week down by 1.64% and by 1.34% respectively.

It was also a mixed week for the banking sector. Deutsche Bank rose by 1.18%, while Commerzbank fell by 0.18%.

From the CAC, it was a bullish week for the banks. BNP Paribas and Soc Gen rose by 1.74% and by 1.06% respectively, with Credit Agricole gaining 0.77%.

The French auto sector also found support with Stellantis NV and Renault seeing gains of 2.64% and 2.59% respectively.

Air France-KLM slipped by 0.05%, however, while Airbus rallied by 3.77%.

On the VIX Index

It was a back into the green for the VIX.

In the week ending 30th July, the VIX rose by 6.05%. Partially reversing a 6.78% fall from the previous week, the VIX ended the week at 18.24.

3-days in the green from 5 sessions, which included a 10.13% jump on Tuesday delivered the upside.

For the week, the NASDAQ fell by 1.11%, with the Dow and the S&P500 ending the week down by 0.36% and by 0.37% respectively.

VIX 310721 Daily Chart

The Week Ahead

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

Private sector PMIs for Italy and Spain will be in focus. Finalized numbers for France, Germany, and the Eurozone are also due out.

Any revisions to prelim numbers and Italy’s PMIs will likely draw the greatest interest.

Early in the week, Eurozone and German retail sales figures will also be key, however. The ECB is looking for a consumption driven economic recovery.

Later in the week, the ECB Economic Bulletin and member state trade data will also be in focus.

From the U.S, ISM Manufacturing and Non-Manufacturing PMIs will be key through the 1st half of the week.

On the labor market front, however, ADP nonfarm employment change, weekly jobless claims, and nonfarm payrolls will also influence.

Away from the economic calendar, corporate earnings and COVID-19 news updates need continued monitoring.

Ferrari’s Revenue to More Than Double in Q2; Target Price $238

The luxury sports car maker Ferrari is expected to report earnings of $1.26 per share for the second quarter, representing a 3,050% increase over $0.04 per share a year earlier.

The company, known for its prancing horse logo, would post revenue growth of over 107% to around $1.3 billion. According to ZACKS Research, the company has beaten earnings per share (EPS) estimates in three of the last four quarters.

The U.S. listed Ferrari shares have slumped about 6% so far this year. The stock closed 1.88% higher at $216.21 on Thursday.

Analyst Comments

“Growth potential and strong execution. Global shipments of >11k units in 2021, growing at a 9.1% CAGR to 2030 ending at ~22k shipments. Adj. EBITDA margins rise to 35% in 2021 on improved mix and pricing after launching 5 new models in 2020 and 2 in 2021,” noted Adam Jonas, equity analyst at Morgan Stanley.

Ferrari trades at a justified premium to luxury brands, in line with luxury leader, Hermes, albeit with more opportunity to grow organically via: new customers, new segments and geographically in China & Asia-Pac, as well as exhibiting a unique moat with a world-renowned brand and a 12+ month customer order book.”

Ferrari Stock Price Forecast

Nine analysts who offered stock ratings for Ferrari in the last three months forecast the average price in 12 months of $238.63 with a high forecast of $281.00 and a low forecast of $202.00.

The average price target represents a 10.35% change from the last price of $216.24. From those nine analysts, four rated “Buy”, four rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $265 with a high of $350 under a bull scenario and $160 under the worst-case scenario. The firm gave an “Overweight” rating on the luxury automaker’s stock.

Several other analysts have also updated their stock outlook. BofA slashed the price objective to $281 from $287. UBS Group cut their price objective to $238 from $247 and set a buy rating.

European Equities: 2nd Quarter GDP and July Inflation in Focus

Economic Calendar

Thursday, 29th July

German Unemployment Change/Rate JUL

German Inflation Rate MoM Prel JUL

Friday, 30th July

French GDP Growth Rate QoQ Prel Q2

French Household Consumption MoM JUN

German GDP Growth Rate Flash Q2

French Inflation Rate YoY Prel JUL

Spanish GDP Growth Rate Flash Q2

Italian GDP Growth Rate Adv Q2

Eurozone Core Inflation Rate Flash JUL

Eurozone GDP Growth Rate Flash Q2

Italian Inflation Rate MoM Prel JUL

Eurozone Inflation Rate Flash JUL

The Majors

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

The CAC40 rose by 0.37%, with the DAX30 and the EuroStoxx600 ending the day up by 0.45% and by 0.46% respectively.

Market reaction to Wednesday’s dovish FED and economic data from the Eurozone and the U.S provided the majors with support.

From the Eurozone, German unemployment figures impressed, while stats from the U.S looked to have put a near-term lid on any need for the FED to make a move. U.S GDP and jobless claims figures were good enough, however, to support riskier assets and not spook the markets.

Support also came from corporate earnings releases on the day.

The Stats

The German economy was in focus once more on Thursday, with unemployment and inflation the key stats of the day.

In July, unemployment slid by 91k, following a 39k decline in June. As a result of the decline, the unemployment rate fell from 5.9% to 5.7%. Economists had forecast a 22k decline and for the unemployment rate to fall to 5.8%.

On the inflation front, Germany’s annual rate of inflation accelerated from 2.3% to 3.8% in July, according to prelim figures. Economists had forecast a pickup to 3.2%.

Month-on-month, consumer prices rose by 0.9%, following a 0.4% increase in June. Economists had forecast a 0.4% rise.

From the U.S

1st estimate GDP numbers for the 2nd quarter were out along with the weekly jobless claim figures.

In the 2nd quarter, the U.S economy grew by 6.5% in the 2nd quarter, ticking up from a 1st quarter 6.4%. Economists had forecast 8.5% growth in the quarter, however.

On the employment front, U.S jobless claims fell from 424k to 400k in the week ending 23rd July. Economists had forecast a decline to 370k.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Daimler rallied by 2.80%, with BMW and Volkswagen ending the day up by 1.40% and by 1.28% respectively. Continental saw a more modest 0.80% gain on the day.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 3.23% and by 1.74% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas gained 1.78%, with Soc Gen and Credit Agricole rising by 1.55% and by 1.38% respectively.

It was also a bullish day for the French auto sector. Stellantis NV rallied by 3.36%, with Renault ending the day up by 0.62%.

Air France-KLM and Airbus SE also found further support, rising by 1.06% and by 0.61% respectively.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Thursday, marking the 2nd decline of the week.

Following a 5.42% fall on Wednesday, the VIX declined by 3.33% to end the day at 17.70.

The NASDAQ rose by 0.11%, with the Dow and the S&P500 ending the day up by 0.44% and by 0.42% respectively.

VIX 300721 Daily Chart

The Day Ahead

It’s a particularly busy day ahead on the economic calendar. Eurozone and member state 1st estimate GDP numbers for the 2nd quarter are due out later today.

Expect plenty of interest in the numbers. We have seen concerns over the resilience of the economic recovery test support for the majors of late. Weaker than expected numbers would weigh.

Prelim inflation and consumer spending figures are also due out but will likely play 2nd fiddle to the GDP numbers.

From the U.S, inflation and personal spending figures will also influence late in the session.

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

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 21 points.

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

Exxon Mobil’s Revenue to Nearly Double in Q2; Target Price $68

Exxon Mobil, an American multinational oil and gas entity, is expected to report its second-quarter earnings of $1.0 per share, which represents year-over-year growth of over 240%, up from a loss of $0.70 per share seen in the same quarter a year ago.

The U.S. largest publicly traded oil company would post revenue growth of over 90% to around $63 billion. The company has beaten earnings per share (EPS) estimates in three of the last four quarters.

Exxon Mobil shares have surged more than 40% so far this year.

Analyst Comments

“The shares of Exxon Mobil have observed a 10% decline in the past month as benchmark prices declined due to the easing of production curtailments by OPEC. The company is committed to maintaining a strong balance sheet and returning capital to shareholders in the coming years. Despite an uncertain demand-supply environment, the company’s second-quarter results are likely to benefit from high benchmark prices, assisting deleveraging plans. The second-quarter revenues are likely to grow by around 100% (y-o-y) resulting in strong earnings expansion over last year’s depressed number,” noted analysts at Trefis.

Exxon Mobil Stock Price Forecast

Sixteen analysts who offered stock ratings for Exxon Mobil in the last three months forecast the average price in 12 months of $68.73 with a high forecast of $90.00 and a low forecast of $55.00.

The average price target represents an 18.05% change from the last price of $58.22. From those 16 analysts, seven rated “Buy”, eight rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $84 with a high of $100 under a bull scenario and $41 under the worst-case scenario. The firm gave an “Overweight” rating on the oil and gas company’s stock.

“Improving FCF outlook and dividend sustainability. With a more constructive commodity price outlook, lower capital spending, and additional cash operating cost savings, the dividend is covered in 2021 and averages >100% over the next 5-years on our estimates. Improving dividend sustainability supports yield compression for Exxon Mobil (XOM) relative to CVX,” noted Devin McDermott, equity analyst at Morgan Stanley.

“Cost cuts defend the dividend. Exxon Mobil (XOM) reduced 2022-25 spending plans to $20-25 B from $30-35 B, improving dividend sustainability while limiting further pull on the balance sheet. Additionally, XOM is targeting $6 B in structural operating cost reductions which should put upward pressure on consensus FCF estimates.”

Several other analysts have also updated their stock outlook. Piper Sandler raised the target price to $69 from $63. Independent Research upped the price objective to $56.00 from $55.00. Jefferies lifted the stock price forecast to $58 from $55.

Check out FX Empire’s earnings calendar

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

Economic Calendar

Thursday, 29th July

German Unemployment Change/Rate JUL

German Inflation Rate MoM Prel JUL

Friday, 30th July

French GDP Growth Rate QoQ Prel Q2

French Household Consumption MoM JUN

German GDP Growth Rate Flash Q2

French Inflation Rate YoY Prel JUL

Spanish GDP Growth Rate Flash Q2

Italian GDP Growth Rate Adv Q2

Eurozone Core Inflation Rate Flash JUL

Eurozone GDP Growth Rate Flash Q2

Italian Inflation Rate MoM Prel JUL

Eurozone Inflation Rate Flash JUL

The Majors

It was a bullish day for the majors on Wednesday.

The CAC40 rallied by 1.18%, with the DAX30 and the EuroStoxx600 ending the day up by 0.33% and by 0.66% respectively.

Following the early in the week sell-off across the Chinese markets, the Hang Seng and CSI300 steadied mid-week, providing support.

Corporate earnings were also in focus, with better-than-expected numbers delivering support to the majors on the day. From France, Capgemini (+3.77%) and Kering (+3.64%) delivered the upside for the CAC40.

The Stats

German consumer sentiment was in focus going into the European open.

For August, the GfK Consumer Confidence Index held steady at -0.30. Economists had forecast a decline to -2.0.

According to the GfK survey,

  • Following a 10-year high, economic expectations moderated in July, falling by 3.8 points to 54.6.
  • Income expectations slipped by 5.1 points to 29 points, which was still up 10 points year-on-year.
  • By contrast, the propensity to buy was on the rise, increasing by 1.4 points to 14.8. In spite of the rise, consumption propensity was still down by almost 28 points year-on-year.

From the U.S

From the U.S, trade data was in focus late in the European session. The numbers had a muted impact on the European majors, however.

There was caution ahead of the post-European close FOMC interest rate decision and press conference.

After the European close, the FED avoided delivering any market shocks.

In line with market expectations, the FED left monetary policy unchanged, while acknowledging that the economic recovery was progressing.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. BMW and Daimler fell by 0.08% and by 0.28% respectively. Continental and Volkswagen avoided the red, however, rising by 0.34% and by 0.60% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank ended the day down by 0.85% and by 0.35% respectively.

From the CAC, it was also a bearish day for the banks. Soc Gen fell by 0.41%, with BNP Paribas and Credit Agricole declining by 0.16% and by 0.22% respectively.

It was a bullish day for the French auto sector, however. Stellantis NV rose by 0.85%, with Renault ending the day up by 4.54%.

Air France-KLM and Airbus SE also found strong support, rising by 1.37% and by 2.65% respectively.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking the first decline of the week.

Partially reversing a 10.13% jump from Tuesday, the VIX fell by 5.42% to end the day at 18.31.

The NASDAQ rose by 0.70%, while the Dow and the S&P500 ended the day down by 0.36% and by 0.02% respectively.

VIX 290721 Daily Chart

The Day Ahead

It’s a busier day ahead on the economic calendar. German unemployment and inflation figures are due out later today.

We can expect both sets of numbers to influence ahead of the U.S session.

From the U.S, weekly jobless claim and 2nd quarter GDP numbers will also influence.

Away from the economic calendar, corporate earnings and COVID-19 news updates will need monitoring, however.

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.

Amazon Stock Poised to Hit Fresh Highs After Strong Q2 Earnings; Target Price $4,332

The e-commerce leader for physical and digital merchandise, Amazon, is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has always beaten earnings per share (EPS) estimates in the last four quarters.

Amazon’s better-than-expected results, which will be announced on Thursday, July 29, would help the stock hit new all-time highs. Amazon shares have surged more than 10% so far this year.

Analyst Comments

“We expect Amazon (AMZN) to beat the consensus estimates for revenues and earnings. The company has reported better than expected revenue and earnings figures in each of the last four quarters. In the past year, due to the pandemic, people turned to e-commerce and online marketplaces for their day to day needs which converted into a high growth in revenue for the company,” noted analysts at Trefis.

“The momentum continued in Q1 2021 as revenue grew by 44% for the quarter. The company also continues its expansion into different segments. Our forecast indicates that Amazon’s valuation is $4241 per share, which is 15% above the current market price of $3703.”

Amazon Stock Price Forecast

Thirty-two analysts who offered stock ratings for Amazon in the last three months forecast the average price in 12 months of $4,332.90 with a high forecast of $5,500.00 and a low forecast of $3,775.00.

The average price target represents a 19.48% change from the last price of $3,626.39. All of those 32 analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $4,500 with a high of $5,300 under a bull scenario and $2,700 under the worst-case scenario. The firm gave an “Overweight” rating on the e-commerce leader’s stock.

Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last-mile delivery, fulfillment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc). Amazon Prime membership growth drives recurring revenue and a positive mix shift. Cloud adoption hitting an inflection point. Advertising serves as a key area for both further growth potential and profitability flow-through,” noted analysts at Morgan Stanley.

Several other analysts have also updated their stock outlook. BofA lowered the price objective to $4350 from $4360. Credit Suisse raised the target price to $4850 from $4000. Bernstein lifted the target price to $4200 from $4000.

Check out FX Empire’s earnings calendar

European Equities: German Economic Data and Sentiment Towards the FED to Influence

Economic Calendar

Tuesday, 27th July

France Jobseekers Total JUN

Wednesday, 28th July

German GfK Consumer Confidence AUG

Thursday, 29th July

German Unemployment Change/Rate JUL

German Inflation Rate MoM Prel JUL

Friday, 30th July

French GDP Growth Rate QoQ Prel Q2

French Household Consumption MoM JUN

German GDP Growth Rate Flash Q2

French Inflation Rate YoY Prel JUL

Spanish GDP Growth Rate Flash Q2

Italian GDP Growth Rate Adv Q2

Eurozone Core Inflation Rate Flash JUL

Eurozone GDP Growth Rate Flash Q2

Italian Inflation Rate MoM Prel JUL

Eurozone Inflation Rate Flash JUL

The Majors

It was a bearish day for the majors on Tuesday.

The CAC40 fell by 0.71%, with the DAX30 and the EuroStoxx600 ending the day down by 0.64% and by 0.54% respectively.

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

Market sentiment towards the rout across the Chinese markets weighed on the majors going into the open.

Providing some support late in the day was the IMF’s latest economic growth forecasts. For 2022, the IMF revised up its growth forecasts by 0.5 percentage points to 5.6% for advanced economies.

Economic data from the U.S was also market positive. U.S consumer confidence took an unexpected jump in July, aligned with the IMF’s outlook towards the U.S economy.

The Stats

Economic data was limited to jobseeker numbers from France, which had a muted impact on the European majors.

In June, the total number of job seekers declined from 3,490.1k to 3,417.6k. Economists had forecast a decline to 3,430.1k.

From the U.S

Durable goods orders and consumer confidence figures were in focus late in the session.

In June, durable goods orders increased by 0.8%, following a 3.2% rise in May. Durable goods orders ex transportation increased by 0.3%, following a 0.5% rise in May. Economists had forecast increases of 1.9% and 0.9% respectively.

Consumer confidence strengthened in July, with the CB Consumer Confidence Index rising from 128.9 to 129.1. Economists had forecast a decline to 126.0.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. BMW and Volkswagen slid by 1.73% and by 1.86% respectively, with Continental and Daimler falling by 1.54% and by 1.52% respectively.

It was also a bearish day for the banks. Deutsche Bank declined by 0.52%, with Commerzbank ending the day down by 2.70%.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.09%, with BNP Paribas and Soc Gen declining by 0.91% and by 0.98% respectively.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day with modest losses of 0.20% and 0.13% respectively.

Air France-KLM slipped by 0.07%, while Airbus SE rose by 0.29%.

On the VIX Index

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

Following a 2.21 gain on Monday, the VIX jumped by 10.13% to end the day at 19.36.

The NASDAQ fell by 1.21%, with the Dow and the S&P500 ending the day down by 0.24% and by 0.47% respectively.

VIX 280721 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the economic calendar. German consumer confidence will be in focus going into the European session.

Economists have forecast for the GfK Consumer Confidence Index to fall from -0.3 to -2.0 for August.

From the U.S, there are no material stats due out to provide the majors with direction. While there are no stats to consider, the markets will be looking ahead to the FED interest rate decision and press conference. The European majors will need to wait until Thursday’s session, however, to respond.

Away from the economic calendar, corporate earnings and COVID-19 news updates will also influence, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 87 points.

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

 

Microsoft Could Hit New All-Time High on Strong Q4 Earnings; Target Price $308

The Redmond, Washington-based global technology giant, Microsoft, is expected to post its fiscal fourth-quarter earnings of $1.91 per share, which represents year-over-year growth of over 30% from $1.46 per share seen in the same quarter a year ago.

The world’s largest software maker would post revenue growth of over 15% to around $44.1 billion, up from the $38.03 billion a year earlier. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 15%.

Microsoft’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Microsoft shares have surged more than 30% so far this year.

Analyst Comments

“Channel work and our CIO survey point to building momentum across the Cloud, Hybrid and On-premises portfolio, which should power a solid Q4. While investors seek reassurances margin expansion continues into FY22, our model suggests durable high-teens EPS growth and upside in the shares,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Strong positioning for public cloud adoption, large distribution channels and installed customer base, and improving margins support a path well beyond $1T mkt cap. Durable double-digit NT rev growth is supported by Azure (winning in public cloud), data center (share gains and positive pricing trends), O365 (base growth and ARPU uplift) and LinkedIn. GM % improvement, continued opex discipline and strong capital return lead to durable teens total return profile. At ~29x CY22e GAAP EPS, Microsoft (MSFT) trades at a premium to the S&P, warranted due to MSFT’s premium return profile. Multiple expansion will likely come from gaining comfort in the durability of commercial business gross profit dollars.”

Microsoft Stock Price Forecast

Twenty-five analysts who offered stock ratings for Microsoft in the last three months forecast the average price in 12 months of $308.65 with a high forecast of $378.00 and a low forecast of $270.00.

The average price target represents a 6.78% change from the last price of $289.05. All of those 25 analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $300 with a high of $380 under a bull scenario and $195 under the worst-case scenario. The firm gave an “Overweight” rating on the global technology giant’s stock.

Several other analysts have also updated their stock outlook. Microsoft had its target price lifted by Barclays to $325 from $288. The brokerage currently has an overweight rating on the software giant’s stock. Citigroup reissued a buy rating and issued a $378.00 price target. Jefferies Financial Group lifted their price target to $310 from $290 and gave the company a buy rating.

Microsoft’s (MSFT) been a significant outperformer YTD, up 30% vs software index up 15% (IGV), setting the bar slightly higher for MSFT shares going into the F4Q print. F4Q expectations are achievable, supported by MSFT’s diverse portfolio including Azure and Teams driving up selling. Key items to watch are FY22 margin pressure, elevated expectations and more color on recent M&A and broader aspirations. Maintain Buy, Raise PT to $335,” noted Brent Thill, equity analyst at Jefferies.

Check out FX Empire’s earnings calendar

European Equities: Futures Point to another Shaky Start for the Markets

Economic Calendar

Tuesday, 27th July

France Jobseekers Total JUN

Wednesday, 28th July

German GfK Consumer Confidence AUG

Thursday, 29th July

German Unemployment Change/Rate JUL

German Inflation Rate MoM Prel JUL

Friday, 30th July

French GDP Growth Rate QoQ Prel Q2

French Household Consumption MoM JUN

German GDP Growth Rate Flash Q2

French Inflation Rate YoY Prel JUL

Spanish GDP Growth Rate Flash Q2

Italian GDP Growth Rate Adv Q2

Eurozone Core Inflation Rate Flash JUL

Eurozone GDP Growth Rate Flash Q2

Italian Inflation Rate MoM Prel JUL

Eurozone Inflation Rate Flash JUL

The Majors

It was a mixed start to the week for the majors on Monday.

The CAC40 rose by 0.15%, while the DAX30 and the EuroStoxx600 ended the day down by 0.32% and by 0.08% respectively.

Economic data from Germany disappointed on Monday, pegging the DAX30 back at the start of the week,

In spite of the threat of the Delta variant on the economic recovery, the losses for the DAX30 and EuroStoxx600 were modest.

Market optimism towards a pickup in economic activity, supported by last week’s private sector PMIs and a dovish ECB remained key drivers.

The Stats

Business sentiment figures from Germany were in focus early in the European session.

In July, the Ifo Business Climate Index fell from 103.7 to 101.2, versus a forecasted decline to 103.6.

According to the July survey,

  • Sentiment towards current conditions improved, with the current conditions sub-index rising from 99.7 to 100.4.
  • Concerns over the outlook weighed, however, with the business climate sub-index falling from 101.7 to 100.8.

At sector level,

  • The index in manufacturing fell due to a marked decline in optimism in companies’ expectations. It was a 4th consecutive monthly decline.
  • By contrast manufacturer assessment of current conditions hit the highest level since Aug-2018.
  • There was a similar trend across the services sector, with the business climate sub-index weakening, while firms were more satisfied with their ongoing business.

From the U.S

New home sales figures for June were in focus that had a muted impact on the European majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler rose by 0.03% to buck the trend. Continental slid by 1.50%, however, with BMW and Volkswagen falling by 0.40% and by 0.89% respectively.

It was a bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 0.66% and by 1.41% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rallied by 2.25%, with Credit Agricole and Soc Gen rising by 1.73% and by 1.78% respectively.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 0.85% and by 1.04% respectively.

Air France-KLM rallied by 2.32%, with Airbus SE rising by 0.45%.

On the VIX Index

A run of 4 consecutive days in the red came to an end for the VIX on Monday.

Partially reversing a 2.77% fall from Friday, the VIX rose by 2.21% to end the day at 17.58.

The NASDAQ eked out a 0.03% gain, with the Dow and the S&P500 both ending the day up by 0.24% respectively.

VIX 270721 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the economic calendar. There are no major stats from the Eurozone to provide the majors with direction.

From the U.S, consumer confidence figures late in the day will provide the majors with direction, however.

Away from the economic calendar, corporate earnings and COVID-19 news updates will remain areas of focus.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 130 points, with the DAX down by 71 points.

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

Alphabet Could Scale to Fresh Record High on Upbeat Q2 Earnings; Target Price $3,000

The parent of Google and the world’s largest search engine that dominates internet search activity globally, Alphabet, is expected to report its second-quarter earnings of $19.33 per share, which represents year-over-year growth of about 90% from $10.13 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 45% to around $56.16 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 43% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Alphabet shares surged more than 50% so far this year. On Friday, the stock closed at a fresh record high at $2,660.30, up 3.57%.

Analyst Comments

Alphabet dominates the online search market with Google’s global share above 80%, via which it generates strong revenue growth and cash flow. We expect continuing growth in the firm’s cash flow, as we remain confident that Google will maintain its leadership in the search market. We foresee YouTube contributing more to the firm’s top and bottom lines, and we view investments of some of that cash in moonshots as attractive. Whether they will generate positive returns remains to be seen, but they do present significant upside,” noted Ali Mogharabi, Senior Equity Analyst at Morningstar.

“Our fair value estimate is $2,925 per share, equivalent to a 2021 enterprise value/EBITDA ratio of 21. We expect revenue growth to accelerate in 2021 as the economy recovers from the COVID-19 pandemic, helped by greater revenue contribution from YouTube and cloud and the acquisition of Fitbit. While new offerings will pressure gross margin, we look for operating leverage improvement during the next five years. Our model represents a five-year compound annual growth rate of nearly 19% for total revenue and a five-year average operating margin of 26%.”

Alphabet Stock Price Forecast

Eleven analysts who offered stock ratings for Alphabet in the last three months forecast the average price in 12 months of $2,743.00 with a high forecast of $2,900.00 and a low forecast of $2,510.00. The average price target represents a -0.48% change from the last price of $2,756.32. All of those 11 analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $2,575 with a high of $3,060 under a bull scenario and $1,800 under the worst-case scenario. The firm gave an “Overweight” rating on the internet giant’s stock.

Google Websites growth is likely to rebound in ’21 as we believe there are several underappreciated products driven by mobile search, strong YouTube contribution, and continued innovation, such as Maps monetization. Continued expense discipline leads to operating leverage and upward revisions on EPS estimates,” noted Brian Nowak, equity analyst at Morgan Stanley.

Several other analysts have also updated their stock outlook. Alphabet had its price objective hoisted by stock analysts at Credit Suisse to $3,350 from $2,755. The brokerage currently has an “outperform” rating on the information services provider’s stock.

Barclays boosted their target price to $3,000 from $2,500 and gave the stock an “overweight” rating. Susquehanna Bancshares lifted their price target to $3,100 from $3,000 and gave the stock a “positive” rating.

Check out FX Empire’s earnings calendar

European Equities: German Business Sentiment and COVID-19 in Focus

Economic Calendar

Monday, 26th July

German Ifo Expectations JUL

Tuesday, 27th July

France Jobseekers Total JUN

Wednensday, 28th July

German GfK Consumer Confidence AUG

Thursday, 29th July

German Unemployment Change JUL

German Inflation Rate MoM Prel JUL

Friday, 30th July

French GDP Growth Rate QoQ Prel Q2

French Household Consumption MoM JUN

German GDP Growth Rate QoQ Flash Q2

German GDP Growth Rate YoY Flash Q2

French Inflation Rate YoY Prel JUL

Spanish GDP Growth Rate QoQ Flash Q2

Spanish GDP Growth Rate YoY Flash Q2

Italian GDP Growth Rate QoQ Adv Q2

Italian GDP Growth Rate YoY Adv Q2

Eurozone Inflation Rate Flash JUL

Eurozone GDP Growth Rate Flash Q2 

The Majors

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

The CAC40 rose by 1.35%, with the DAX30 and the EuroStoxx600 ending the day up by 1.00% and by 1.09% respectively.

A further pickup in private sector activity across the Eurozone supported the majors at the end of the week.

With Monday’s sell-off a distant memory, optimism towards the earnings season and sentiment towards ECB monetary policy also delivered yet more upside.

The gains came in spite of disappointing PMI numbers from France, the UK, and from the U.S.

The Stats

French, German, and Eurozone private sector PMIs were in focus on Friday.

The French manufacturing PMI fell from 59.0 to 58.1, with the services PMI falling from 57.8 to 57.0.

Economists had forecast PMIs of 57.9 and 58.7 respectively.

From Germany, the manufacturing PMI rose from 65.1 to 65.6, with the services PMI rising from 57.5 to 62.2.

Economists had forecast PMIs of 63.7 and 59.1 respectively.

The Eurozone

For the Eurozone, the manufacturing PMI fell from 63.4 to 62.6, while the services PMI rose from 58.3 to a 181-month high 60.4.

Economists had forecast PMIs of 62.5 and 59.6 respectively.

According to the prelim Markit Survey,

  • The composite PMI rose to a 252-month high in July, according to prelim figures.
  • Business activity accelerated for a 4th consecutive month, supported by a continued easing of COVID-19 restrictions.
  • Demand was on the rise, with new order growth for the private sector at its fastest since May 2000.
  • Firms hired staff for a 6th consecutive month, with the pace of hiring the 2nd steepest since Jan-2018.
  • Average selling prices for goods and services rose at a near-term record pace, reflecting supply constraints.

From the U.S

Prelim private sector PMI numbers for July were also in focus.

The services PMI fell from 64.6 to 59.8, while the manufacturing PMI rose from 62.1 to 63.1.

As a result, the composite PMI slid from 63.7 to 59.7, with the all-important services PMI weighing heavily.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Daimler rallied by 5.00% to lead the way, supported by a broker upgrade to buy. Volkswagen and Continental rose by 2.66% and by 2.35% respectively, with BMW gaining 2.06%.

It was a mixed day for the banks, however. Deutsche Bank rose by 1.05%, while Commerzbank ended the day down by 0.04%.

From the CAC, it was a bullish day for the banks. Soc Gen rallied by 1.83%, with BNP Paribas and Credit Agricole rising by 1.18% and by 1.09% respectively.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 1.04% and by 0.97% respectively.

Air France-KLM slipped by 0.28%, while Airbus SE rose by 1.81%.

On the VIX Index

It was a 4th consecutive day in the red for the VIX on Friday.

Following a 1.23 decline on Thursday, the VIX fell by 2.77% to end the day at 17.20.

The Dow rose by 0.68%, with the NASDAQ and the S&P500 ending the day up by 1.04% and by 1.01% respectively.

VIX 260721 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the economic calendar. Business sentiment figures from Germany are due out early in the European session,

Expect the headline Ifo Business Climate Index to have the greatest impact.

From the U.S, housing sector numbers, due out late in the session, should have a muted impact on the European majors.

Away from the economic calendar, corporate earnings and COVID-19 news updates will also influence, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 1 point.

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

Monstrous Earnings Week Ahead: Tesla, Google, Microsoft, Apple, Facebook and Amazon in Focus

Earnings Calendar For The Week Of July 26

Monday (July 26)

IN THE SPOTLIGHT: TESLA, LOCKHEED MARTIN

TESLA: The California-based electric vehicle and clean energy company is expected to report its second-quarter earnings of $0.94 per share, which represents year-over-year growth of over 113% from $0.44 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer would post revenue growth of about 90% to around $11.4 billion. The electric vehicle producer has beaten earnings three times in the last four quarters.

“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base, over time generating a higher % of revenue from recurring/high-margin services revenue. Services drives the upside. We forecast Tesla’s network services EBITDA as a % of total TSLA EBITDA to reach 11% by 2025, ~18% by 2030 and ~35% by 2040. Tesla Service revenue includes automated driving, infotainment, upgrades, supercharging, maintenance, telematics, etc,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Valuation supportive vs. tech. Including Network Services, Energy & Insurance to our core auto fcst, at $900 Tesla trades at ~29x EV/EBITDA in 2025 and ~6x 2025 sales. Expensive vs. auto but not vs. software/tech comps.”

LOCKHEED MARTIN: The Bethesda, Maryland-based global security and aerospace company is expected to report its second-quarter earnings of $6.53 per share, which represents year-over-year growth of about 13% from $5.79 per share seen in the same quarter a year ago.

The world’s largest defense contractor would post revenue growth of over 4% to around $16.9 billion. It is worth noting that the aerospace company has beaten earnings in all last eight quarters.

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

Ticker Company EPS Forecast
PSON Pearson £8.40
LMT Lockheed Martin $6.53
PHG Koninklijke Philips $0.47
CHKP Check Point Software Technologies $1.56
LII Lennox International $4.39
RPM RPM International $1.26
BOH Bank of Hawaii $1.31
DORM Dorman Products $1.04
TSLA Tesla $0.94
KOF Coca Cola Femsa Sab De Cv $14.53
ARE Alexandria Real Estate Equities $0.62
AMP Ameriprise Financial $5.20
SUI Sun Communities $0.57
BRO Brown & Brown $0.40
UHS Universal Health Services $2.69
PKG Packaging Of America $1.77
FFIV F5 Networks $2.46
AGNC American Capital Agency $0.65
ACC American Campus Communities -$0.07
AMKR Amkor Technology $0.45
CR Crane $1.39
ADC Agree Realty $0.47
SSD Simpson Manufacturing $1.61
AXTA Axalta Coating Systems $0.46
TNET TriNet $0.81
HXL Hexcel $0.01
RRC Range Resources $0.25
PCH Potlatch $2.55
JJSF J&J Snack Foods $0.76
IBTX Independent Bank $1.31
CATY Cathay General Bancorp $0.83
AIN Albany International $0.73
CALX Calix $0.27
IBA Industrias Bachoco Sab De Cv $1.22
ARI Apollo Commercial Real Est Finance $0.36
PPERY PT Bank Mandiri Persero TBK $0.18
CDNS Cadence Design Systems $0.76
OTIS Otis Worldwide Corp $0.72
RYAAY Ryanair -$1.46
HAS Hasbro $0.48
WWD Woodward $0.98
ACKAY Arcelik ADR $0.46
GT Goodyear Tire & Rubber $0.16
TTM Tata Motors -$0.31
CBU Community Bank System $0.80
SANM Sanmina $0.91
BDN Brandywine Realty $0.01
FRME First Merchants $0.91

Tuesday (July 27)

IN THE SPOTLIGHT: GOOGLE (ALPHABET), MICROSOFT, APPLE

GOOGLE (ALPHABET): The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its second-quarter earnings of $19.33 per share, which represents year-over-year growth of about 90% from $10.13 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 45% to around $56.16 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 43% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Alphabet shares surged more than 50% so far this year. On Friday, the stock closed at a fresh record high at $2,660.30, up 3.57%.

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal fourth-quarter earnings of $1.91 per share, which represents year-over-year growth of over 30% from $1.46 per share seen in the same quarter a year ago. The world’s largest software maker would post revenue growth of over 15% to around $44.1 billion, up from the $38.03 billion a year earlier.

“Channel work and our CIO survey point to building momentum across the Cloud, Hybrid and On-premise portfolio, which should power a solid Q4. While investors seek reassurances margin expansion continues into FY22, our model suggests durable high-teens EPS growth and upside in the shares,” noted Keith Weiss, equity analyst at Morgan Stanley.

Microsoft’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Microsoft shares have surged more than 30% so far this year.

APPLE: The consumer electronics giant would post its fiscal third-quarter earnings of $1.01 per share, which represents year-over-year growth of over 55% from $0.65 per share seen in the same quarter a year ago.

The iPhone manufacturer would post revenue growth of over 20% to around $73.3 billion up from $59.69 billion a year earlier. It is worth noting that the company has beaten earnings in all last eight quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 27

Ticker Company EPS Forecast
SIRI Sirius XM $0.07
IEX IDEX $1.62
PCAR PACCAR $1.40
MMM 3M $2.29
MSCI Msci $2.31
ENPH Enphase Energy $0.42
LSXMK Liberty Media SiriusXM C $0.36
LSXMA Liberty Media SiriusXM A $0.48
CVLT Commvault Systems $0.52
LOGI Logitech Internationalusa $0.90
MXIM Maxim Integrated Products $0.85
ST Sensata Technologies $0.88
CNC Centene $1.22
UPS United Parcel Service $2.79
TRU TransUnion $0.91
SHW Sherwin-Williams $2.67
IVZ Invesco $0.70
FELE Franklin Electric $0.80
LW Lamb Weston Holdings Inc $0.42
IQV IQVIA Holdings Inc $2.07
RTX Raytheon Technologies Corp $0.93
ENTG Entegris $0.79
LECO Lincoln Electric $1.48
FISV Fiserv $1.28
DTE DTE Energy $1.36
GE General Electric $0.03
ROK Rockwell Automation $2.09
WM Waste Management $1.19
SWK Stanley Black & Decker $2.88
ADM Archer-Daniels Midland $1.02
HUBB Hubbell $2.16
PNR Pentair Ordinary Share $0.79
BSX Boston Scientific $0.37
ECL Ecolab $1.21
PPBI Pacific Premier Bancorp $0.71
GPK Graphic Packaging $0.28
PHM PulteGroup $1.73
AWI Armstrong World Industries $1.05
RGEN Repligen $0.52
SFNC Simmons First National $0.52
SSTK Shutterstock $0.68
ABG Asbury Automotive $4.60
MPWR Monolithic Power Systems $1.69
CHRW C.H. Robinson Worldwide $1.33
MANH Manhattan Associates $0.43
GOOG Alphabet $19.33
CB Chubb $3.00
AMD Advanced Micro Devices $0.54
PGRE Paramount Group -$0.05
SBUX Starbucks $0.77
CAKE Cheesecake Factory $0.72
EGP EastGroup Properties $0.67
AXS Axis Capital $1.42
WSBC WesBanco $0.75
HIW Highwoods Properties $0.33
STAG STAG Industrial $0.12
VIST Vista Oil Gas $0.15
NAVI Navient $0.85
EHC Encompass Health Corp $0.98
OMAB Grupo Aeroportuario Del Centro Nort $11.31
NOV National Oilwell Varco -$0.13
V Visa $1.34
GOOGL Alphabet $19.24
BXP Boston Properties $0.57
AAT American Assets $0.11
MSFT Microsoft $1.91
JNPR Juniper Networks $0.39
BYD Boyd Gaming $0.90
MASI Masimo $0.90
MTDR Matador Resources $0.75
CSGP CoStar $0.23
FIBK First Interstate BancSystem $0.72
OLN Olin $1.44
EQR Equity Residential $0.19
EXR Extra Space Storage $1.06
EPR EPR Properties $0.06
USNA USANA Health Sciences $1.72
THG Hanover $2.38
UMBF UMB Financial $1.75
CHE Chemed $4.29
SYK Stryker $2.13
MDLZ Mondelez International $0.65
MAT Mattel -$0.06
PFG Principal Financial $1.52
AAPL Apple $1.01
TER Teradyne $1.75
VIV Telefonica Brasil $0.13
ASH Ashland $1.31
GLW Corning $0.51
PII Polaris Industries $2.15
JBLU JetBlue Airways -$0.74
RDY Drreddys Laboratories $0.55
XRX Xerox $0.40
CIT CIT $0.86
SID Companhia Siderurgica Nacional $0.86
RNST Renasant $0.77

Wednesday (July 28)

IN THE SPOTLIGHT: FACEBOOK

The world’s largest online social network is expected to report its second-quarter earnings of $3.04 per share, which represents year-over-year growth of about 70% from $1.80 per share seen in the same quarter a year ago. The Menlo Park, California-based social media conglomerate would post revenue growth of over 49% to around $28.0 billion.

“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~33% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$18bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~39% CAGR (2019-2022).”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 28

Ticker Company EPS Forecast
PTC PTC $0.63
URI United Rentals $4.90
ENSG Ensign $0.88
ALKS ALKERMES $0.12
TYL Tyler Technologies $1.63
AMG Affiliated Managers $3.85
SF Stifel Financial $1.38
FIX Comfort Systems USA $0.91
MSA MSA Safety $1.04
CBD Companhia Brasileira De Distrib $0.04
ALGT Allegiant Travel $2.55
GD General Dynamics $2.55
HES Hess $0.11
PFE Pfizer $0.97
QCOM Qualcomm $1.68
HP Helmerich & Payne -$0.56
UMC United Microelectronics $0.14
BA Boeing -$0.81
EQIX Equinix $1.87
DB Deutsche Bank $0.33
RJF Raymond James Financial $2.27
SAN Banco Santander $0.13
HNP Huaneng Power International $0.86
LRCX Lam Research $7.59
APH Amphenol $0.55
EVR Evercore Partners $2.71
PPC Pilgrim’s Pride $0.52
R Ryder System $1.38
NSC Norfolk Southern $2.97
FORM FormFactor $0.33
SHOO Steven Madden $0.31
SCI Service International $0.67
ADP ADP $1.14
MNRO Monro Muffler Brake $0.52
SLAB Silicon Laboratories $0.93
BXMT Blackstone Mortgage $0.60
PAG Penske Automotive $2.76
ROL Rollins $0.18
BCS Barclays $0.54
CAJ Canon $0.33
XLNX Xilinx $0.78
HUM Humana $6.82
AVY Avery Dennison $2.05
NYCB New York Community Bancorp $0.30
SCL Stepan $1.84
GSK Glaxosmithkline $0.55
CME CME $1.61
TEVA Teva Pharmaceutical Industries $0.59
MCD McDonalds $2.11
BSBR Banco Santander Brasil $0.20
EXP Eagle Materials $2.07
DT Dynatrace Holdings $0.15
EEFT Euronet Worldwide $0.65
SPOT Spotify -$0.38
OC Owens Corning $2.14
FMX Fomento Economico Mexicano Sab $14.29
BMY Bristol-Myers Squibb $1.89
VRTS Virtus Investment Partners $8.11
GRMN Garmin $1.26
SIX Swiss Exchange -$0.22
CCJ Cameco USA -$0.05
TDY Teledyne Technologies $2.70
IART Integra LifeSciences $0.66
GNRC Generac $2.30
MCO Moody’s $2.77
VRT Veritas Pharma $0.24
EPD Enterprise Products Partners $0.50
GIB CGI Group USA $1.08
TMO Thermo Fisher Scientific $5.47
TEL TE Connectivity $1.58
SLGN Silgan $0.83
PB Prosperity Bancshares $1.39
ODFL Old Dominion Freight Line $2.17
BG Bunge $1.62
LFUS Littelfuse $2.24
CNMD CONMED $0.62
CP Canadian Pacific Railway USA $1.00
AVB AvalonBay Communities $0.74
ALGN Align Technology $2.52
AM Antero Midstream Partners $0.19
CNO CNO Financial Group $0.54
CINF Cincinnati Financial $0.99
SSNC SS&C Technologies $1.14
MTH Meritage Homes $3.28
TTEK Tetra Tech $0.88
MKSI MKS Instruments $2.95
ROIC Retail Opportunity Investments $0.06
SIGI Selective $1.23
VAC Marriottacations Worldwide $0.89
PDM Piedmont Office Realty $0.05
IRBT Irobot $0.32
UDR UDR $0.01
EXAS Exact Sciences -$0.75
MOH Molina Healthcare $3.39
EQT EQT $0.04
MXL MaxLinear $0.50
IR Ingersoll Rand $0.42
AGI Alamos Gold $0.11
MAA Mid-America Apartment Communities $0.55
KGC Kinross Gold USA $0.13
ESRT Empire State Realty -$0.01
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
CRUS Cirrus Logic $0.39
MUSA Murphy USA $3.21
RE Everest Re $8.58
VALE Vale $1.47
DRE Duke Realty $0.19
PYPL PayPal $1.12
NOW ServiceNow $1.21
CCS Century Communities $2.84
NLY Annaly Capital Management $0.27
TROX Tronox $0.52
XPO XPO Logistics $1.66
SAVE Spirit Airlines -$0.86
PAC Grupo Aeroportuario Del Pacifico $1.14
CHX ChampionX Corp $0.10
NUVA NuVasive $0.44
FBHS Fortune Brands Home Security $1.39
NOVA Nova Mentis Life Science Corp -$0.24
FB Facebook $3.04
ACGL Arch Capital $0.84
CONE CyrusOne $0.04
AR Antero Resources $0.20
AEM Agnico Eagle Mines USA $0.59
RBC Regal Beloit Corporation $2.07
PEGA Pegasystems -$0.18
AFL Aflac $1.28
PKI PerkinElmer $2.44
CHDN Churchill Downs $2.51
PEB Pebblebrook Hotel -$0.65
CTSH Cognizant Technology Solutions $0.96
HOLX Hologic $1.12
KRC Kilroy Realty $0.29
ALSN Allison Transmission $0.93
F Ford Motor -$0.04
ASGN On Assignment $1.29
HIG Hartford Financial Services $1.34
ORLY O’Reilly Automotive $7.51
ISBC Investors Bancorp $0.31

Thursday (July 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has beaten earnings per share (EPS) estimates at all times in the last four quarters.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JULY 29

Ticker Company EPS Forecast
RLGY Realogy $1.08
VSTO Vista Outdoor $0.90
AGCO AGCO $2.20
PCG PG&E $0.28
MATX Matson $2.96
PRFT Perficient $0.79
NATI National Instruments $0.05
GPI Group 1 Automotive $7.59
CFX Colfax $0.53
CMS CMS Energy Corporation $0.46
LYG Lloyds Banking $0.14
MHK Mohawk Industries $3.59
EBS Emergent BioSolutions $1.41
TXT Textron $0.65
AUOTY AU Optronics $0.56
CMCSA Comcast $0.66
VLO Valero Energy $0.17
CG Carlyle $0.60
ABEV Ambev $0.02
NLSN Nielsen $0.36
MTD Mettler Toledo International $7.62
ADS Alliance Data Systems $3.68
FTNT Fortinet $0.88
FTV Fortive Corp $0.60
ASX Advanced Semiconductor Engineering $0.16
LKQ LKQ $0.75
ERJ Embraer -$0.26
TFX Teleflex $2.87
CARR Carrier Global Corp $0.55
CX Cemex Sab De Cv $0.16
ORAN Orange $0.18
CVE Cenovus Energy USA $0.26
MT Arcelormittal $2.52
MA Mastercard $1.74
KBR KBR $0.50
HOCPY Hoya Corp $0.85
YUM Yum Brands $0.96
EIX Edison International $1.02
EME EMCOR $1.58
AGIO Agios Pharmaceuticals -$1.35
KPELY Keppel Corporation $0.18
BUD Anheuser-Busch $0.87
CS Credit Suisse $0.22
DANOY Danone PK $0.45
SNY Sanofi $0.77
AZN Astrazeneca $0.45
TEF Telefonica $0.14
STM Stmicroelectronics $0.37
GRFS Grifolsbarcelona $0.26
THRM Gentherm $0.65
WWW Wolverine World Wide $0.49
CNX Consol Energy $0.24
CBRE CBRE Group Inc $0.77
TAP Molson Coors Brewing $1.35
VC Visteon $0.05
KEX Kirby $0.14
TREE LendingTree -$0.63
SAH Sonic Automotive $1.38
HSY Hershey $1.42
AMT American Tower $1.27
TW Towers Watson $0.39
OSK Oshkosh $2.25
MAS Masco $1.04
MO Altria $1.18
TROW T. Rowe Price $3.19
CTXS Citrix Systems $1.22
SPGI S&P Global Inc $3.26
BAX Baxter International $0.75
ICE Intercontinental Exchange $1.16
SO Southern Co. $0.79
NTCT Netscout Systems $0.18
GOL Gol Linhas Aereas Inteligentes -$0.91
CFR Cullen/Frost Bankers $1.56
CWT California Water Service $0.41
FSS Federal Signal $0.45
AER AerCap $1.37
COLB Columbia Banking System $0.66
COR CoreSite Realty $0.45
WEX WEX $1.95
TMHC Taylor Morrison Home $0.96
XEL Xcel Energy $0.56
FLEX Flextronics International $0.38
SAIA Saia $2.05
OSTK Overstock $0.67
IDA IdaCorp $1.21
FCN FTI Consulting $1.52
LAWS Lawson Products $0.60
WST West Pharmaceutical Services $1.74
MLM Martin Marietta Materials $3.85
MTSI MACOM Technology Solutions $0.53
LH Laboratory Of America $5.62
EXLS ExlService $1.01
BSAC Banco Santander Chile $0.50
AOS A.O. Smith $0.65
TPX Tempur Sealy International $0.56
HBAN Huntington Bancshares $0.32
WAB Westinghouse Air Brake Technologies $0.96
NOC Northrop Grumman $5.83
MMP Magellan Midstream Partners $1.02
HLT Hilton Worldwide $0.39
KDP Keurig Dr Pepper $0.37
OMCL Omnicell $0.82
BC Brunswick $2.14
MRK Merck & Co $1.40
TRP Transcanada USA $0.77
KIM Kimco Realty $0.12
IP International Paper $1.06
MDC MDC $1.99
PRLB Proto Labs $0.44
SGEN Seattle Genetics -$0.61
CPT Camden Property $0.34
SIMO Silicon Motion Technology $1.25
CUBE CubeSmart $0.21
DLB Dolby Laboratories $0.28
BIO Bio-Rad Laboratories $2.66
CC Chemours Co $0.94
ZEN Zendesk $0.16
FWRD Forward Air $0.97
AJG Arthur J. Gallagher $1.08
SPSC SPS Commerce $0.40
ROG Rogers $1.89
ERIE Erie Indemnity $1.51
CUZ Cousins Properties $0.20
WELL Welltower Inc $0.15
PTCT PTC Therapeutics -$1.81
AUY Yamana Gold USA $0.06
LPLA LPL Financial $1.67
WWE World Wrestling Entertainment $0.25
WRE Washington Real Estate Investment -$0.04
TXRH Texas Roadhouse $0.98
ATR AptarGroup $0.97
GLPI Gaming And Leisure Properties $0.57
OFC Orate Office Properties $0.14
RSG Republic Services $0.95
TEX Terex $0.60
X United States Steel $3.08
LBTYA Liberty Global Class A Ordinary Shares $0.46
KLAC KLA-Tencor $3.99
SWKS Skyworks Solutions $2.14
DXCM Dexcom $0.44
HUBG HUB $0.70
VCYT Veracyte -$0.25
POWI Power Integrations $0.75
LGND Ligand Pharmaceuticals $1.38
FHI Federated Hermes Inc $0.66
FSLR First Solar $0.55
CWST Casella Waste Systems $0.24
DLR Digital Realty $0.24
MTX Minerals Technologies $1.25
VRTX Vertex Pharmaceuticals $2.37
PFPT Proofpoint $0.49
ESS Essex Property $0.88
GILD Gilead Sciences $1.73
WERN Werner $0.87
MMSI Merit Medical Systems $0.45
LBTYK LIBERTY GLOBAL $0.46
AMZN Amazon $12.24
QGEN Qiagen $0.65
EW Edwards Lifesciences $0.55
NRZ New Residential Investment $0.31
MSTR Microstrategy $0.81
SM SM Energy -$0.26
SWN Southwestern Energy $0.21
TMUS T-Mobile Us $0.51
DECK Deckers Outdoor -$0.15
CORT Corcept Therapeutics $0.17
TWOU 2U -$0.16
SBH Sally Beauty $0.62
MPW Medical Properties $0.29
CACC Credit Acceptance $10.36
SJW SJW $0.64
SHEN Shenandoah Telecommunications $0.86
ES Eversource Energy $0.80
KMPR Kemper $1.33
WRI Weingarten Realty Investors $0.10
OPK Opko Health $0.02
SU Suncor Energy USA $0.39
APELY Alps Electric $0.11
ACI AltaGas Canada $0.69
EXPO Exponent $0.42

Friday (July 30)

Ticker Company EPS Forecast
KMTUY Komatsu $0.40
VFC VF $0.11
ABR Arbor Realty $0.42
PEXNY PTT Exploration & Production $0.16
LAZ Lazard $0.89
HRC Hill-Rom $1.35
XOM Exxon Mobil $1.00
COG Cabot Oil Gas $0.29
MFG Mizuho Financial $0.08
GCTAY Siemens Gamesa ADR $0.02
TU Telus USA $0.21
JCI Johnson Controls $0.83
CL Colgate-Palmolive $0.80
BAH Booz Allen Hamilton $0.97
TOTDY Toto $0.25
ASEKY Aisin Seiki Co $1.13
BBVA Banco Bilbaoizcaya Argentaria $0.06
E ENI $0.33
FMS Fresenius Medical Care $0.48
SMFG Sumitomo Mitsui Financial $0.21
SBGSY Schneider Electric SA $0.63
PG Procter & Gamble $1.09
CHD Church Dwight $0.70
ALNPY ANA Holdings ADR -$0.20
CVX Chevron $1.58
BNPQY BNP Paribas ADR $1.07
NMR Nomura $0.17
CHT Chunghwa Telecom $0.34
HUN Huntsman $0.81
LIN Linde PLC $2.55
AON AON $1.85
PNM PNM Resources $0.46
CAT Caterpillar $2.41
CPRI Capri Holdings Ltd $0.79
BLMN Bloomin’ Brands $0.66
CHTR Charter Communications $4.79
DAN Dana $0.50
ITW Illinois Tool Works $2.09
GWW Grainger $4.59
CERN Cerner $0.76
NWL Newell Brands Inc $0.45
POR Portland General Electric $0.37
ENB Enbridge USA $0.45
LYB LyondellBasell Industries $5.30
ABBV AbbVie $3.08
SHLX Shell Midstream Partners $0.35
WPC W. P. Carey $0.56
AVNT Avient Corp $0.81
WY Weyerhaeuser $1.37
IDXX Idexx Laboratories $2.02
BCPC Balchem $0.82
For a look at all of today’s economic events, check out our economic calendar.

European Equities: A Week in Review – 23/07/21

The Majors

It was a choppy week for the majors in the week ending 23rd July.

The CAC40 rose by 1.68%, with the DAX30 and the EuroStoxx600 ending the week up by 0.83% and by 1.49% respectively.

Concerns over the impact of the Delta strain on the economic recovery had sent the majors into the deep red on Monday.

Dip-buying, optimism towards corporate earnings, and ECB assurances supported a recovery, however.

Economic data in the week delivered mixed results, however, limiting the upside for the majors later in the week.

Key was a pickup in private sector activity in Germany…

The Stats

Eurozone consumer confidence and French, German, and Eurozone private sector PMIs were in focus.

It was a mixed set of numbers, however.

Consumer confidence in the Eurozone waned in July, with the index falling from -3.3 to -4.4. Economists had forecast an increase to -2.6.

More significant, however, were the prelim PMI numbers for July.

The French manufacturing PMI fell from 59.0 to 58.1, with the services PMI falling from 57.8 to 57.0.

Economists had forecast PMIs of 57.9 and 58.7 respectively.

From Germany, the manufacturing PMI rose from 65.1 to 65.6, with the services PMI rising from 57.5 to 62.2.

Economists had forecast PMIs of 63.7 and 59.1 respectively.

The Eurozone

For the Eurozone, the manufacturing PMI fell from 63.4 to 62.6, while the services PMI rose from 58.3 to a 181-month high 60.4.

Economists had forecast PMIs of 62.5 and 59.6 respectively.

According to the prelim Markit Survey,

  • The composite PMI rose to a 252-month high in July, according to prelim figures.
  • Business activity accelerated for a 4th consecutive month, supported by a continued easing of COVID-19 restrictions.
  • Demand was on the rise, with new order growth for the private sector at its fastest since May 2000.
  • Firms hired staff for a 6th consecutive month, with the pace of hiring the 2nd steepest since Jan-2018.
  • Average selling prices for goods and services rose at a near-term record pace, reflecting supply constraints.

On the monetary policy front, the ECB left rates unchanged, which was in line with market expectations. ECB President Lagarde continued to deliver assurances to the markets, ultimately supporting the European boerses on the day.

From the U.S

Jobless claim figures disappointed. In the week ending 16th July, initial jobless claims rose from 368k to 419k. Economists had forecast a decline to 340k.

At the end of the week, prelim private sector PMI numbers for July were also in focus.

The services PMI fell from 64.6 to 59.8, while the manufacturing PMI rose from 62.1 to 63.1.

As a result, the composite PMI slid from 63.7 to 59.7, with the all-important services PMI weighing heavily on the composite.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Daimler rallied by 4.70% to lead the way, with Continental up 1.78%. BMW and Volkswagen saw more modest gains of 0.46% and 0.48% respectively.

It was a mixed week for the banking sector, however. Deutsche Bank rallied by 4.35%, while Commerzbank fell by 0.55%.

From the CAC, it was a bullish week for the banks. BNP Paribas and Soc Gen rose by 1.38% and by 1.33% respectively, with Credit Agricole gaining 1.92%.

The French auto sector also found support with Stellantis NV and Renault seeing modest gains of 0.55% and 0.81% respectively.

Air France-KLM and Airbus ended the week up by 0.41% and by 0.78% respectively.

On the VIX Index

It was a back into the red for the VIX, which saw red for the 3rd week in 5 weeks.

In the week ending 23rd July, the VIX fell by 6.78%. Partially reversing a 14.03% gain from the previous week, the VIX ended the week at 17.2.

4-days in the red from 5 sessions, which included a 12.31% slide on Tuesday and a 9.22% decline on Wednesday delivered the downside. The VIX had jumped by 21.95% at the start of the week.

For the week, the NASDAQ rallied by 2.84%, with the Dow and the S&P500 ending the week up by 1.08% and by 1.96% respectively.

VIX 240721 Weekly Chart

The Week Ahead

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

Early in the week, the German economy will be under scrutiny.

Business and consumer sentiment figures will be in focus.

Expect plenty of interest in the numbers that are due out on Monday and Wednesday.

On Thursday, unemployment numbers from Germany will also draw attention ahead of prelim GDP numbers on Friday.

GDP figures for France, Germany, and the Eurozone will be in focus at the end of the week.

Other stats in the week include member state and Eurozone inflation figures. Following Lagarde’s guidance on inflation, expect any spike in inflation to influence.

From the U.S, it’s also a busy week ahead.

On Tuesday, core durable goods and consumer confidence will be in focus.

The focus will then shift to the weekly jobless claims and 2nd quarter GDP numbers on Thursday.

Personal spending and consumer sentiment numbers wrap things up on Friday.

Away from the economic calendar, corporate earnings and COVID-19 news updates will also influence, however.

Schlumberger Tops Q2 Earnings Estimates; Target Price $35

Schlumberger, a technology company that partners with customers to access energy, reported better-than-expected earnings in the second and issued an optimistic outlook for this year as higher oil prices boosted the company’s demand.

The Houston-based company reported quarterly earnings of 30 cents per share, comfortably above the analysts’ expectations of 26 cents. Meanwhile, revenues of $ $5.63 billion topped estimates by $ 5.51 billion.

“Absent any further setback in the recovery, we continue to see our international revenue growing in the second half of 2021 by double-digits when compared to the second half of last year. This translates into full-year 2021 international revenue growth, setting the stage for a strong baseline as we move into 2022 and beyond,” said Schlumberger CEO Olivier Le Peuch.

At the time of writing, Schlumberger shares traded 0.25% higher at $28.05 on Friday. The stock has surged over 28% so far this year.

Analyst Comments

“Wider beat than peers with strong FCF. No real change to outlook except to say the potential for further upside to financial targets where Schlumberger (SLB) has already reached the high end of the annual target for 250-300bps of EBITDA mgn increase. No mention of the “supercycle” used in recent presentations. We wonder how much oil price helped APS, which is said to have contributed to the D&I strength,” noted Marc Bianchi, equity analyst at Cowen.

Schlumberger Stock Price Forecast

Eleven analysts who offered stock ratings for Schlumberger in the last three months forecast the average price in 12 months of $35.36 with a high forecast of $40.00 and a low forecast of $32.00.

The average price target represents a 26.92% change from the last price of $27.86. All of those 11 analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $40 with a high of $60 under a bull scenario and $20 under the worst-case scenario. The firm gave an “Overweight” rating on an oilfield services company’s stock.

“Portfolio restructuring masked by downturn: Schlumberger (SLB) has executed a major organizational realignment, which we think has been underappreciated by the market. Defensible market position in the right businesses: We continue to view SLB as the premier OFS franchise, which is now on the right track to value creation. Its high-end businesses have the greatest potential for returns improvement in the coming cycle, in our view,” noted Connor Lynagh, equity analyst at Morgan Stanley.

“Digital & New Energies drive differentiated long-term growth: SLB has developed meaningful partnerships and invested organically in technology to prepare it for two major secular growth trends in the energy industry, which should help address “terminal value” risk.”

Several other analysts have also updated their stock outlook. BofA Global Research raised the price objective to $43 from $42. Citigroup lifted the price target to $40 from $35. JPMorgan upped the target price to $28 from $23. Simmons Energy increased the target price to $29 from $27.5. Stifel raised the target price to $37 from $33.

Check out FX Empire’s earnings calendar

Domino’s Shares Hit Record High as Q2 Earnings Beat Forecasts; Target Price $673

Domino’s shares hit a fresh record high after the world’s largest pizza company reported better-than-expected earnings and revenue in the second quarter, largely driven by international and U.S. same-store sales growth and increases in global store counts during the trailing four quarters.

The largest pizza chain in the world said its earnings per share (EPS) rose to $3.12, up from $2.99 seen in the same period a year ago. That was higher than the Wall Street consensus estimates of $2.86 per share.

The company said its revenues increased $112.4 million, or 12.2%, in the second quarter of 2021. That was above the market expectations of $972.3 million.

Following upbeat results, Domino’s shares hit a new all-time high, jumping 14.55% to $538.82 on Thursday. The stock has surged over 40% so far this year.

Analyst Comments

“A top-line beat lapping Covid benefits with positive US sales assuaged lingering concerns on comp outlook with carryout coming back but delivery also holding up amid a favorable consumer backdrop and strong relative value prop. Estimates rise here with confidence in 2H; price target to $564,” noted John Glass, equity analyst at Morgan Stanley.

“Delivery momentum supporting best in class system sales and unit growth in a still fragmented category; advantaged category with Covid-19 disruption and beginning to lap strong year-ago performance. Well-positioned in key US market: Technology leadership, data-driven investment and marketing decisions are hallmarks of the brand. Carryout market represents incremental growth. Sustainable competitive advantages vs aggregators on value, delivery speed which could become more visible in ’21-’22. Strong cash flow generation, stable franchise income stream and international business are partially offset by a price competitive category & high leverage.”

Domino’s Stock Price Forecast

Twenty analysts who offered stock ratings for Domino’s in the last three months forecast the average price in 12 months of $495.16 with a high forecast of $585.00 and a low forecast of $410.00.

The average price target represents a -8.10% change from the last price of $538.82. From those 20 analysts, ten rated “Buy”, 10 rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $564 with a high of $673 under a bull scenario and $389 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. CFRA raised the target price by $75 to $550. Stephens lifted the target price to $540 from $490. Wedbush upped the target price to $585 from $520. Stifel increased the target price to $485 from $435.

“Adj. EPS $3.12 above Cons $2.88 on better-than-expected dom and int’l SSS and slight Op margin upside. Unit growth also ahead of expectations led by international. SSS momentum holding strong despite easing restrictions and tough compares, which lead us to raise our NT ests. price target to $522 (from $420) and reiterate Hold rating as stock’s current valuation of 27x 2022E EBITDA appears fair,” noted Alexander Slagle, equity analyst at Jefferies.

Check out FX Empire’s earnings calendar

European Equities: Private Sector PMIs for July in the Spotlight

Economic Calendar

Friday, 23rd July

French Markit Manufacturing PMI Flash

French Markit Services PMI Flash

German Markit Services PMI Flash

German Markit Manufacturing PMI Flash

Eurozone Markit Services PMI Flash

Eurozone Markit Manufacturing PMI Flash

The Majors

It was relatively bullish day for the majors on Thursday.

The CAC40 rose by 0.26%, with the DAX30 and the EuroStoxx600 ending the day up by 0.60% and by 0.56% respectively.

A busier economic calendar and the ECB monetary policy decision and press conference were key drivers on the day.

Away from the economic calendar, COVID-19, the spike in new cases, and possible impact on the global economic recovery remained a drag, however.

The Stats

consumer confidence figures for the Eurozone were in focus on the day.

In June, the Eurozone’s Consumer Confidence Index took an unexpected fall from -3.3 to -4.4. Economists had forecast an increase to -2.6.

While the stats were of influence, the ECB monetary policy decision and the press conference were the key drivers.

In line with market expectations, the ECB left monetary policy unchanged.

From the press conference, ECB President Lagarde looked to deliver further assurances that there would be no rate hikes until inflation reaches its 2% target.

Lagarde comment on inflation was categoric. “Our rate policy would be lifted only if the evidence is sufficiently clear, sufficiently persistent, sufficiently lasting and we have the degree of confidence that our inflation will reach 2% on a durable basis.”

With the Delta variant impacting many economies, the ECB President also highlighted the downside risks stemming from the pandemic.

From the U.S

Jobless claims figures were in focus. In the week ending 16th July, initial jobless claims rose from 368k to 419k. Economists had forecast a decline to 340k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Daimler rose by 0.53% to buck the trend on the day. Volkswagen and Continental fell 1.37% and by 1.44% respectively. BMW saw a more modest 0.79% decline,

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank ended the day down by 0.55% and by 1.02% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen fell by 0.67%, with BNP Paribas and Credit Agricole declining by 0.55% and by 0.46% respectively.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day down by 0.57% and by 1.58% respectively.

Air France-KLM rose by a modest 0.41%, while Airbus SE fell by 1.01%.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX on Thursday, reversing a run of 3 consecutive days in the green.

Following a 9.22% decline on Wednesday, the VIX fell by 1.23% to end the day at 17.69.

The NASDAQ rose by 0.36%, with the Dow and the S&P500 ending the day up by 0.07% and by 0.20% respectively.

VIX 230721 Daily Chart

The Day Ahead

It’s a busy day ahead on the economic calendar. Prelim private sector PMIs for France, Germany, and the Eurozone will be in focus. Expect plenty of interest in the numbers.

The markets will be looking for any economic speedbumps that would test support for the majors.

From the U.S, private sector PMIs are also due out. Expect the services PMI to have the greatest influence on the majors later in the session.

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

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 49 points.

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

Coca-Cola Tops Q2 Earnings Estimates, Raises Full-Year Guidance

Coca-Cola, the world’s largest soft drink manufacturer, reported better-than-expected earnings and revenue in the second quarter, largely driven by a recovery in markets where coronavirus-related uncertainty has abated, sending its shares up over 1% on Wednesday.

The most popular and biggest-selling soft drink reported earnings per share of $0.68, beating analysts’ expectations of $0.56. The company said its net revenue surged over 41% to $10.13 billion, beating the Wall Street consensus estimates of $9.32 billion.

Coca-Cola said it expected to deliver organic revenue (non-GAAP) growth of 12% to 14% and comparable net revenues (non-GAAP) to grow in the range of 1% to 2% in the full year 2021. The company also expects to deliver comparable EPS (non-GAAP) growth of 13% to 15% versus $1.95 in 2020.

Following the upbeat results, Coca-Cola shares 1.28% to $56.55 on Wednesday. The stock rose over 3% so far this year.

Analyst Comments

“Short term, we see a well-above-consensus post-COVID-19 topline/EPS recovery ahead through 2022, and longer-term, see a return to pre-COVID-19 outsized sales growth vs. peers, improved execution with a reorganization, and higher margins with productivity/rational industry environment,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

“We are Overweight Coca-Cola (KO) after significant stock underperformance given COVID-19 impacts on KO’s on-premise eating / drinking out business (~40% of sales) and gas & convenience (~10%) with gov’t mandated restaurant closures and reduced foot traffic. COVID-19 impacts drove a large -9% organic sales decline in 2020, but we forecast a recovery to ~14.5% organic growth in 2021 and ~8% in 2022 with a post-COVID-19 recovery in away-from-home. We believe Coke’s LT topline growth outlook is above peers, with strong pricing power, and favorable strategy tweaks under Coke’s CEO, including increased innovation and a cultural shift towards a total beverage company.”

Coca-Cola Stock Price Forecast

Ten analysts who offered stock ratings for Coca-Cola in the last three months forecast the average price in 12 months of $61.20 with a high forecast of $64.00 and a low forecast of $58.00.

The average price target represents an 8.22% change from the last price of $56.55. From those ten analysts, six rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $65 with a high of $75 under a bull scenario and $40 under the worst-case scenario. The firm gave an “Overweight” rating on the soft drink company’s stock.

Several other analysts have also updated their stock outlook. Cowen and company raised the target price to $60 from $57. JPMorgan lifted the target price to $59 from $56. Jefferies increased the target price to $59 from $57. Guggenheim raised the target price to $59 from $56.

“Our FY21-23 EPS ests are little changed (we raised our forecast into KO’s 2Q print) and maintain our Hold post KO’s strong 2Q. The recovery in AFH channels, continued resilience in AH channels (notably in DMs + for new occasions), improved market share, and commitment to restoring A&M are all encouraging. We like the strategic direction; however, expectations appear reasonable, and we see less scope for shares to re-rate higher at ~25x P/E. Hold, $60 price target,” noted Kevin Grundy, equity analyst at Jefferies.

Check out FX Empire’s earnings calendar

European Equities: Economic Data and the ECB in the Spotlight…

Economic Calendar

Thursday, 22nd July

Eurozone Business Confidence

ECB Interest Rate Decision

ECB Press Conference

Eurozone Consumer Confidence Flash

Friday, 23rd July

French Markit Manufacturing PMI Flash

French Markit Services PMI Flash

German Markit Services PMI Flash

German Markit Manufacturing PMI Flash

Eurozone Markit Services PMI Flash

Eurozone Markit Manufacturing PMI Flash

The Majors

It was particularly bullish day for the majors on Wednesday, following Tuesday’s more modest gains.

The CAC40 rallied by 1.85%, with the DAX30 and the EuroStoxx600 ending the day up by 1.36% and by 1.65% respectively.

A shift in focus towards corporate earnings provided support, with the upside coming in spite of continued concerns over the Delta variant.

Market expectation of strong earnings and also a dovish ECB was the key combination for the majors mid-week.

There were no major stats to materially dent the recovery from Monday’s losses.

Following Wednesday’s rally, the CAC40 moved into positive territory for the current week, while the DAX30 and the EuroStoxx600 remained in the red.

The Stats

It’s been a quiet start to the week on the economic calendar. Following a wholesale inflation figures from Germany on Tuesday, industrial sales figures from Italy were in focus.

Industrial Sales

In May, industrial sales decreased by 1.0%, partially reversing a 3.3% jump from April. Year-on-year, production was up by 40.2% versus a forecasted 45% increase. In April, production had been up by 105.1%.

According to iStat.it,

  • Industrial turnover fell by 1.9% in the domestic market, while rising by 0.7% in the non-domestic one.
  • The manufacturing sector saw industrial turnover contract by 1.4%.
  • In the 3-months to May 2021, total industrial production turnover levels increased by 4.7% when compared with the previous 3-month period.
  • Turnover rose by 5.4% in the domestic market and by 3.2% in the non-domestic market.
  • Year-on-year, turnover in the domestic market was up 41.0% and up by 38.6% in the non-domestic one.

From the U.S

There were no major stats to provide the majors with direction later in the European session.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Wednesday. Volkswagen and Continental rallied by 2.43% and by 2.86% respectively. BMW and Daimler saw more modest gains of 1.08% and by 0.68% respectively.

It was a particularly bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 4.33% and by 2.65% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 3.15%, with Soc Gen and Credit Agricole rallying by 3.29% and 3.21% respectively.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 3.43% and by 4.46% respectively.

Air France-KLM rose by 2.92%, with Airbus SE rallying by 4.38%.

On the VIX Index

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

Following a 12.31% slide on Tuesday, the VIX fell by 9.22% to end the day at 17.91.

The NASDAQ rose by 0.92%, with the Dow and the S&P500 ending the day up by 0.83% and by 0.82% respectively.

VIX 220721 Daily Chart

The Day Ahead

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

Early in the European session, business confidence figures for the Eurozone will be in focus. While we expect the numbers to provide direction, the markets will be looking ahead to the ECB policy decision and press conference.

The ECB’s economic outlook and forward guidance on policy will be key. Following the ECB’s revision to its price stability objective, we can also expect plenty of Q&A on the new 2% objective.

After the ECB press conference, consumer confidence figures for the Eurozone will also influence.

From the U.S, jobless claims figures will also draw interest late in the European session. Market reaction may be delayed, however, with the release of the stats coinciding with the ECB press conference.

Away from the economic calendar, corporate earnings and COVID-19 news will also draw attention.

The Futures

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

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

Halliburton Stock Gains After Q2 Earnings Top Estimates; Target Price $33 in Best Case

Halliburton, one of the world’s largest providers of products and services to the energy industry, reported better-than-expected earnings in the second quarter, sending its shares up over 3% on Tuesday.

The Houston, Texas-based energy company said its profit rose to $227 million, or $0.26 per share, up from $170 million, or $0.19 per share, seen in the previous quarter. That was higher than the market expectations of $0.22 per share.

The company reported total revenue of $3.7 billion, up from $3.5 billion registered in the previous quarter. Operating income was $434 million in the second quarter of 2021 compared to operating income of $370 million in the first quarter of 2021.

Following the upbeat results, Halliburton shares jumped 3.6% to $20.07 on Tuesday. The stock rose over 6% so far this year.

Analyst Comments

Halliburton (HAL) laid out an above-consensus multi-year financial view, suggesting high confidence in the ongoing recovery. Growth contemplated is broad-based, high-margin, and FCF generative. For the near-term, though, guidance continues to be reasonably conservative and more in-line with our expectations,” noted Connor Lynagh, equity analyst at Morgan Stanley.

“Relative positioning less favorable vs. some global peers: Though it has decreased in absolute size, HAL still remains more NAm-focused vs. peers, where we see greater headwinds to value creation and returns improvement. Risk-reward relatively balanced: We see relatively balanced risk-reward for HAL’s shares and believe a more significant capex shift back into its core markets would be required for meaningful outperformance vs. the group.”

Halliburton Stock Price Forecast

Ten analysts who offered stock ratings for Halliburton in the last three months forecast the average price in 12 months of $25.94 with a high forecast of $33.00 and a low forecast of $16.50.

The average price target represents a 29.25% change from the last price of $20.07. From those ten analysts, five rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $28 with a high of $40 under a bull scenario and $15 under the worst-case scenario. The firm gave an “Equal-weight” rating on the energy company’s stock.

Several other analysts have also updated their stock outlook. Evercore ISI raised the target price to $38 from $29. Piper Sandler lifted the target price to $25.50 from $25.30. ATB Capital Markets upped the target price to $29 from $27.50. BofA Global Research increased the price objective to $33 from $28.

“Modest 2Q beat and 3Q guide which again appears to reflect conservative margins, but the real news was that HAL introduced a 2023 outlook implying ~$4B of EBITDA vs $3.5Bcons and our $4B. Investors wonder if HAL is being too aggressive guiding to ’23 given the industry’s typical lack of visibility. It will be interesting to see if OFS peers endorse this view in the coming days,” noted Marc Bianchi, equity analyst at Cowen.

Check out FX Empire’s earnings calendar