Markets
News
Analysis
User
24/7
Economic Calendar
Education
Data
- Names
- Latest
- Prev
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
P: --
A:--
F: --
A:--
F: --
A:--
F: --
A:--
F: --
P: --
A:--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
--
F: --
P: --
No matching data
Latest Views
Latest Views
Trending Topics
To quickly learn market dynamics and follow market focuses in 15 min.
In the world of mankind, there will not be a statement without any position, nor a remark without any purpose.
Inflation, exchange rates, and the economy shape the policy decisions of central banks; the attitudes and words of central bank officials also influence the actions of market traders.
Money makes the world go round and currency is a permanent commodity. The forex market is full of surprises and expectations.
Top Columnists
Enjoy exciting activities, right here at FastBull.
The latest breaking news and the global financial events.
I have 5 years of experience in financial analysis, especially in aspects of macro developments and medium and long-term trend judgment. My focus is maily on the developments of the Middle East, emerging markets, coal, wheat and other agricultural products.
BeingTrader chief Trading Coach & Speaker, 8+ years of experience in the forex market trading mainly XAUUSD, EUR/USD, GBP/USD, USD/JPY, and Crude Oil. A confident trader and analyst who aims to explore various opportunities and guide investors in the market. As an analyst I am looking to enhance the trader’s experience by supporting them with sufficient data and signals.
Latest Update
Risk Warning on Trading HK Stocks
Despite Hong Kong's robust legal and regulatory framework, its stock market still faces unique risks and challenges, such as currency fluctuations due to the Hong Kong dollar's peg to the US dollar and the impact of mainland China's policy changes and economic conditions on Hong Kong stocks.
HK Stock Trading Fees and Taxation
Trading costs in the Hong Kong stock market include transaction fees, stamp duty, settlement charges, and currency conversion fees for foreign investors. Additionally, taxes may apply based on local regulations.
HK Non-Essential Consumer Goods Industry
The Hong Kong stock market encompasses non-essential consumption sectors like automotive, education, tourism, catering, and apparel. Of the 643 listed companies, 35% are mainland Chinese, making up 65% of the total market capitalization. Thus, it's heavily influenced by the Chinese economy.
HK Real Estate Industry
In recent years, the real estate and construction sector's share in the Hong Kong stock index has notably decreased. Nevertheless, as of 2022, it retains around 10% market share, covering real estate development, construction engineering, investment, and property management.
Hongkong, China
Ho Chi Minh, Vietnam
Dubai, UAE
Lagos, Nigeria
Cairo, Egypt
White Label
Data API
Web Plug-ins
Affiliate Program
View All
No data
Not Logged In
Log in to access more features
FastBull Membership
Not yet
Purchase
Log In
Sign Up
Hongkong, China
Ho Chi Minh, Vietnam
Dubai, UAE
Lagos, Nigeria
Cairo, Egypt
White Label
Data API
Web Plug-ins
Affiliate Program
Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the John Hancock Multifactor Mid Cap ETF (JHMM), a passively managed exchange traded fund launched on 09/28/2015.
The fund is sponsored by John Hancock. It has amassed assets over $3.92 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.42%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.03%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 19.40% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, United Rentals Inc (URI) accounts for about 0.62% of total assets, followed by Lennar Corp A (LEN) and Hartford Financial Svcs Grp (HIG).
The top 10 holdings account for about 4.77% of total assets under management.
Performance and Risk
JHMM seeks to match the performance of the John Hancock Dimensional Mid Cap Index before fees and expenses. The John Hancock Dimensional Mid Cap Index comprises of a subset of securities in the U.S. Universe issued by companies whose market capitalizations are between the 200th and 951st largest U.S. company.
The ETF has added about 12.23% so far this year and was up about 22.14% in the last one year (as of 09/19/2024). In the past 52-week period, it has traded between $44.18 and $58.94.
The ETF has a beta of 1.08 and standard deviation of 19% for the trailing three-year period, making it a medium risk choice in the space. With about 664 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Mid Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JHMM is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $68.41 billion in assets, iShares Core S&P Mid-Cap ETF has $89.43 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Zacks Investment Research
September S&P 500 E-Mini futures (ESU24) are up +1.48%, and September Nasdaq 100 E-Mini futures (NQU24) are up +2.03% this morning on expectations the Federal Reserve’s half-percentage-point rate cut will steer the U.S. economy toward a “soft landing,” while investors awaited a new round of U.S. economic data and an earnings report from delivery services giant FedEx.
The Federal Reserve cut its benchmark interest rate by a half percentage point yesterday, marking its first rate reduction in over four years. The Federal Open Market Committee voted 11 to 1 to reduce the federal funds rate to a range of 4.75% to 5.00% after maintaining it at its highest level in two decades for over a year. In their statement, policymakers indicated they will contemplate “additional adjustments” to rates depending on “incoming data, the evolving outlook, and the balance of risks.” At the same time, Fed Chair Jerome Powell warned not to presume that the half-point move establishes a pace that policymakers will maintain. “This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2%, ” Powell said in a press conference.
Projections released after the Fed’s two-day meeting revealed that a slim majority, 10 out of 19 policymakers, supported cutting rates by at least an additional half-point during the two remaining 2024 meetings. Also, Fed officials penciled in an additional percentage point of cuts in 2025, according to their median forecast.
“The markets got what they wanted - a big first cut by the Fed. Now we’ll see if they remain satisfied,” said Chris Larkin at E*Trade from Morgan Stanley. “The Fed has a well-deserved reputation for not rushing, so there’s the potential for some disappointment if it’s seen to be moving too slowly, especially if economic data continues to soften. But today they delivered.”
In yesterday’s trading session, Wall Street’s major indices ended in the red. ResMed slumped over -5% and was the top percentage loser on the S&P 500 after Wolfe Research downgraded the stock to Underperform from Peer Perform with a price target of $180. Also, chip stocks lost ground, with Intel sliding more than -3% to lead losers in the Dow and Nasdaq 100 and Nvidia falling nearly -2%. On the bullish side, U.S. Steel advanced over +1% after a U.S. security panel granted Nippon Steel permission to refile its plans to acquire the company for $14.1 billion. In addition, Intuitive Machines surged more than +38% after announcing that it was awarded a NASA contract worth up to $4.82 billion for providing communication and navigation services for near-space missions.
Economic data released on Wednesday showed that U.S. building permits, a proxy for future construction, rose +4.9% m/m to a 5-month high of 1.475M in August, stronger than expectations of 1.410M. Also, U.S. August housing starts rose +9.6% m/m to a 4-month high of 1.356M, stronger than expectations of 1.310M.
Meanwhile, U.S. rate futures have priced in a 62.9% chance of a 25 basis point rate cut and a 37.1% chance of a 50 basis point rate cut at the next central bank meeting in November.
On the earnings front, notable companies like FedEx , Lennar , and Darden Restaurants are slated to release their quarterly results today.
Today, all eyes are focused on the U.S. Philadelphia Fed manufacturing index, set to be released in a couple of hours. Economists, on average, forecast that the September Philadelphia Fed manufacturing index will come in at -0.8, compared to last month’s value of -7.0.
Also, investors will focus on U.S. Initial Jobless Claims data. Economists predict this figure will hold steady at 230K, consistent with last week’s number.
U.S. Existing Home Sales data will be released today. Economists foresee this figure to stand at 3.92M in August, compared to 3.95M in July.
The U.S. Conference Board Leading Index will be reported today as well. Economists expect the August figure to be -0.3% m/m, compared to the previous number of -0.6% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.707%, up +0.38%.
The Euro Stoxx 50 futures are up +1.31% this morning as investors digested the Fed’s first rate cut in four years and looked ahead to the Bank of England’s interest rate decision. Mining stocks led the gains on Thursday. Data from the European Central Bank released Thursday revealed that the Eurozone’s current account surplus narrowed in July due to a smaller trade surplus and a decline in primary income. Meanwhile, investor focus is now shifting to the Bank of England’s monetary policy decision due later in the session, with the central bank widely anticipated to keep rates unchanged. In corporate news, Next Plc gained about +2% after the British clothing retailer announced it is on track to achieve an annual profit of nearly 1 billion pounds.
Eurozone’s Current Account data was released today.
Eurozone July Current Account came in at 39.6B euros, weaker than expectations of 40.3B euros.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.69%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.13%.
China’s Shanghai Composite Index closed higher today, reversing earlier losses amid optimism that an aggressive U.S. rate cut could give Chinese authorities more leeway to ease policy further to bolster the economy. Software and property stocks led the gains on Thursday. Still, a bleak economic outlook and the absence of robust policy support measures in the country kept sentiment subdued. According to analysts and policy advisers, Chinese policymakers are expected to intensify efforts to help the economy achieve its increasingly challenging growth target for 2024, focusing more sharply on stimulating demand to counter persistent deflationary pressures. Meanwhile, just hours after the Fed’s meeting, the Hong Kong Monetary Authority reduced the city’s base rate by 50 basis points to 5.25%. The HKMA follows the Fed’s monetary policy to maintain the Hong Kong dollar’s fixed exchange rate with the U.S. dollar. In other news, Chinese Commerce Minister Wang Wentao stated in Brussels on Wednesday that China will persist in negotiating “until the last minute” on the European Union’s electric vehicle probe. In corporate news, Hongrun Construction Group rose over +3% after securing a 242 million yuan wharf construction project from Hengli Shipbuilding. Investors are now shifting their focus to China’s loan prime rate decision on Friday.
Japan’s Nikkei 225 Stock Index closed sharply higher today, climbing above the 37,000 level for the first time since September 5th. Export-oriented stocks led the gains on Thursday as the yen weakened against the dollar, driven by expectations that the Fed might opt for smaller rate cuts ahead. A softer yen enhances the prospects for Japan’s export-driven industries and encourages investors to pursue higher-yielding assets. Technology stocks also gained ground. Meanwhile, market participants are now turning their attention to the Bank of Japan’s policy decision on Friday, where it is expected to keep its benchmark rate unchanged but hint at further rate hikes. Japanese consumer inflation data, set for release on Friday, will also be closely watched by investors. In corporate news, Ichiyoshi Securities gained over +1% after announcing a provisional semi-annual dividend of 17 yen per share for the fiscal year ending March 31st, 2025. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -5.20% to 25.73.
Pre-Market U.S. Stock Movers
Steelcase plunged over -9% in pre-market trading after the company reported weaker-than-expected Q2 revenue and provided below-consensus Q3 revenue guidance.
Progyny plummeted more than -22% in pre-market trading after disclosing the loss of a “significant client.”
Five Below fell about -1% in pre-market trading after JPMorgan downgraded the stock to Underweight from Neutral.
Today’s U.S. Earnings Spotlight: Thursday - September 19th
FedEx (FDX), Lennar (LEN), Darden Restaurants (DRI), FactSet Research (FDS), MillerKnoll (MLKN), Endava (DAVA), Cracker Barrel Old (CBRL), Research Solutions (RSSS).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.
Homebuilder stocks are hitting new highs as anticipation builds ahead of the Federal Reserve’s upcoming rate cut decision. Both Lennar Corp and PulteGroup, Inc. surged to 52-week highs on Sept. 18, with Lennar reaching $190.12 and PulteGroup hitting $141.43.
The rally comes as investors bet that the Fed’s expected rate cut could further boost the already resurgent housing market.
Lower Rates To Benefit Home Builder Stocks
A note from Bank of America Securities highlights that the rally in homebuilder stocks has been underway since early July, coinciding with a drop in 30-year mortgage rates from 7% to 6.2%.
“Lower rates would benefit home demand,” the note added, suggesting that a Federal Reserve cut of 25 to 50 basis points would add fuel to the fire for the housing sector.
Read Also: Homebuilder Stocks Outperform Ahead Of Potential Rate Cuts — But What’s Next?
Lennar’s Cash Flow Yield In Focus As It Reports Q3 Earnings
Lennar, up 26.78% year to date and nearly 60% over the past year, has been a standout performer, benefiting from strong demand and improved earnings multiples. The company is expected to release its third-quarter earnings tomorrow (Thursday), which could provide further insights into its performance.
Bryn Talkington of Requisite Capital Management also pointed to Lennar's impressive free cash flow yield of 11%, making it an attractive play for investors seeking value amid the rate cut frenzy.
PulteGroup’s Margins Continue To Impress Investors
PulteGroup, up a whopping 82.46% over the past year, followed a similar path. The company, which develops single-family homes under well-known brands such as Pulte Homes and Centex, continues to enjoy top-of-the-line margins despite industry headwinds like inflation and a soft labor market.
Analysts believe the Fed's expected rate cut will temporarily relieve the housing affordability crisis, though long-term challenges remain.
Lennar and PulteGroup are positioned to keep riding the wave as the Fed’s decision looms. Investors eyeing exposure to the housing sector may want to watch closely.
Read Next:
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Homebuilder and building product stocks could see an upward trend if the Federal Reserve cuts the key interest rate on Wednesday, based on historical performance, according to a major U.S. bank.
The Fed is expected to lower rates by either 25 or 50 basis points, marking the first change since July 2023 when it raised the rate to a range of 5% to 5.25%.
“Builders and building product stocks have outperformed in anticipation of rate cuts,” BofA Securities said in a note on Tuesday.
“Lower rates would benefit home demand.”
Homebuilder and building product stocks have rallied since early July as 30-year mortgage rates have fallen from 7% to roughly 6.2%, boosting new home demand and spending on home improvements, BofA said.
“In our view, the stock performance has been stronger than the improvement in underlying fundamentals as investors look through near-term weakness to a 2025 recovery fueled by lower mortgage rates and pent-up demand,” the note stated.
Read Also: Homebuilder Stocks Rally To Record Highs On Rate-Cut Frenzy But Housing Sales Still Struggle
“Housing sector outperformance ahead of rate cuts is consistent with prior cycles, but the magnitude and valuations are higher this time around. Stock performance following the first cut is more mixed although usually positive for homebuilders.”
BofA noted that homebuilders outperformed the S&P 500 in the three months before three of the last five initial rate cuts, and building products outperformed in four of the last five.
In the last three months, homebuilder stocks have gone up 26% and building product shares have risen 13%, compared to the S&P 500’s 2% uptick over the same period, BofA said.
“Assuming the Fed starts to cut rates in September, homebuilder and building product stocks will be trading at a higher valuation than going into any of the last five periods when the Fed started to cut.”
BofA also pointed out that homebuilders and building products typically underperform the S&P 500 ahead of a recession but outperform it during and after a recession.
Price Action: Homebuilder stocks traded higher on Tuesday.
Building products also saw gains and losses.
The S&P 500, which is tracked by SPDR S&P 500 ETF Trust , was up 0.02% to 5,634.58.
Read Now:
Image created using artificial intelligence via Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
For Immediate Release
Chicago, IL – September 17, 2024 – Zacks Equity Research shares Sprouts Farmers Market SFM as the Bull of the Day and Tenaris TS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Berkshire Hathaway Inc.’s (BRK.B), NVR, Inc. NVR and Lennar Corp. LEN.
Here is a synopsis of all five stocks:
Bull of the Day:
Sprouts Farmers Market, a Zacks Rank #1 (Strong Buy), provides natural and organic food products primarily in the United States. Shares of the healthy grocer are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this top-ranked stock.
SFM stock is part of the Zacks Foods – Natural Foods Products industry group, which currently ranks in the top 29% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months, just as it has consistently over the past year.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Sprouts Farmers Market boasts a unique grocery model, offering a variety of fresh produce, meats, seafood, dairy, vitamins, and other supplements. Founded in 1943, the Phoenix-based grocer operates more than 400 stores in 23 states.
The company’s focus on product innovation and expansion of private label offerings bodes well for the future. The organic foods provider has witnessed a remarkable surge in e-commerce sales this year, expanding its digital footprint through key partnerships with Uber Eats, DoorDash, and Instacart.
An aggressive expansion plan to open 35 new stores in 2024 underscores its confidence in long-term growth. Sprouts has invested heavily to improve operational efficiencies, highlighted by its Fresh Item Management Technology which deploys computer-assisted ordering methods.
Earnings Trends and Future Estimates
The top-ranked company has put together an impressive earnings history, surpassing earnings estimates in each of the past twenty consecutive quarters. Back in July, Sprouts reported second-quarter earnings of $0.94/share, a 22.1% surprise over the $0.77/share consensus estimate.
The grocer has delivered a trailing four-quarter average earnings surprise of nearly 12%. Consistently beating earnings estimates is a recipe for success and bolsters the bullish case.
SFM shares received a boost as analysts covering the company have been increasing their third-quarter earnings estimates lately. For the current quarter, earnings estimates have risen 8.7% in the past 60 days. The Q3 Zacks Consensus EPS Estimate now stands at $0.75/share, reflecting a potential growth rate of 15.4% relative to the year-ago period.
Let’s Get Technical
SFM stock has advanced more than 100% this year alone. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Only stocks that are in extremely powerful uptrends are able to witness this type of price move. SFM shares broke out to a series of all-time highs back in August, even as the general market pulled back. Stocks that hold up well through periods of volatility tend to lead the next leg higher.
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been widely outperforming the major indices, indicating a prolonged period of relative strength. With both strong fundamental and technical indicators, SFM stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Sprouts Farmers Market has recently witnessed positive revisions. As long as this trend remains intact (and SFM continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
A promising combination of accelerating growth and momentum metrics bodes well for SFM shareholders, as the trend appears set to continue in the quarters ahead.
Backed by a top industry group and impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical outlook certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.
Bear of the Day:
Tenaris is a global manufacturer and supplier of steel pipe products and associated services to the oil and gas, energy, and related industries. The company produces and sells seamless and welded steel tubular products such as steel casings, which sustain the walls of oil and gas wells during and after drilling.
Based in Luxembourg, Tenaris also manufactures and distributes steel line pipes to transport crude oil and natural gas from wells to refineries, storage tanks and distribution centers. In addition, the company provides premium joints and couplings for use in high pressure or high temperature environments, as well as coiled tubing for oil drilling and subsea pipelines.
The Zacks Rundown
Tenaris, a Zacks Rank #5 (Strong Sell) stock, is a component of the Zacks Steel – Pipe and Tube industry group, which currently ranks in the bottom 26% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it throughout the year.
Candidates in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when included in a lackluster industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Along with many other steel-related stocks, TS shares have been struggling this year while the general market returned to new heights. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head deeper into the latter half of the year.
Recent Earnings Misses & Deteriorating Outlook
Tenaris has fallen short of earnings estimates in four of the past eight quarters. Back in July, the company reported second-quarter earnings of $0.59/share, missing the $0.97/share Zacks Consensus estimate by -39.2%. Consistently falling short of earnings estimates is a recipe for underperformance, and TS is no exception.
CEO Paolo Rocca stated during the Q2 earnings call that despite high levels of oil and gas production in the United States, drilling activity has decreased, resulting in “reduced overall demand for pipes.” He also touched on the company’s outlook in other regions.
“The change in the government in Mexico and the uncertainties surrounding the policy for the energy sector are limiting drilling investment in the country. In Argentina, the necessary stabilization of the macroeconomic environment is delaying investment in drilling and the development of infrastructure in Vaca Muerta. This factor will affect our sales and results in the second half, when we expect that our sales volume will be 10% to 15% below those of the first half.”
Tenaris has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -19.44% in the past 60 days. The Q3 Zacks Consensus Estimate is now $0.58/share, reflecting negative growth of -36.3% relative to the prior year.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, TS stock is in a sustained downtrend. Notice how the stock has made a series of lower lows, widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day average (red line) moving averages – another good sign for the bears.
TS stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. The stock would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. Shares have fallen nearly 17% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that TS is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of TS until the situation shows major signs of improvement.
Additional content:
Mortgage Rates Are Falling: A Boon for 2 Warren Buffett Stocks
Warren Buffett-led Berkshire Hathaway Inc.’s portfolio hasn’t fared badly against the S&P 500’s return amid a higher interest rate environment. However, Buffett hopes for interest rate cuts like several market pundits as it would jack up the share price of two of his beloved housing stocks NVR, Inc. and Lennar Corp. Here’s why –
Freddie Mac Report: U.S. Mortgage Rates Drop
According to Freddie Mac, for the week ending Sept. 12, the 30-year fixed-rate mortgage slipped to its lowest level since February 2023. The rate on the 30-year loan averaged 6.2%, down from the four-week and 52-week averages of 6.34% and 6.93%, respectively. The 30-year mortgage rate hovered around the 7% mark for most of the year, but since late July, it has begun to cool off and has fallen since then.
The 15-year fixed mortgage average rate was 5.27%, down from the four-week and 52-week averages of 5.47% and 6.21%, respectively, a positive development for aspiring homeowners, added Freddie Mac. Mortgage rates in the United States have continued to soften over the past year.
Why Are Mortgage Rates Falling?
An increase in expectations of a much-awaited interest rate cut in the Federal Reserve’s September policy meeting is pushing the yields on long-term bonds lower leading to a drop in mortgage rates.
The Fed is expected to trim interest rates as price pressures ebb toward the central bank’s 2% target. The interest rate cut would be the first one since March 2020, when the Fed slashed rates to boost economic growth derailed due to the pandemic. The interest rates have remained elevated for the past 14 months, waiting for economic conditions to improve.
According to the CME FedWatch Tool, around 59% of market participants expect the Fed to trim interest rates by 50 basis points in the upcoming policy meeting. Nearly 41% of traders are pricing in a quarter-point interest rate cut.
Drop in Mortgage Rates to Boost 2 Warren Buffett Stocks
The steady decline in mortgage rates on interest rate cut expectations should increase new home purchases, and boost homebuilders’ bottom line. Thus, two of Warren Buffett’s homebuilders, NVR and Lennar,are expected to see an increase in their stock prices.
After giving away his stake in D.R. Horton, Inc. DHI, the Oracle of Omaha hung onto these housing stocks as they would benefit from urbanization and a strong brand value. Berkshire Hathawayhas roughly $100 million of NVR shares and around $26 million of Lennar shares as of the company’s latest 13F filing, citing a CNBC article.
Key NVR Tailwinds: Increase in New Orders, Very Strong ROE
NVR’s profit margin is expected to improve as the company has witnessed an increase in new orders. In the second quarter, NVR’s new orders increased by 3% to 6,067 units from 5,905 units a year ago.
NVR has proficiently generated profits as the company’s return on equity (ROE) is 38.5%, more than the Building Products - Home Builders industry’s 18.3%. An ROE of more than 20% is usually considered very strong.
NVR’s expected earnings growth rate for the next five years is 7.6%. Its shares have gained 33.9% so far this year.
Key LEN Tailwinds: Dynamic Pricing Model, Lower Debt
Lennar is well-positioned to gain from its dynamic pricing model, which helps the company set prices based on demand trends and ever-changing market scenarios. This, in turn, aids Lennar in improving cash flow and return on inventory.
Lennar has a debt-to-equity of 8.3%, less than the industry’s 15.4%, a tell-tale sign that the company has less debt on its balance sheet than its peers, and can operate more efficiently in the long run.
LEN’s expected earnings growth rate for the next five years is 7.8%. Its shares have gained 24.7% year to date.
Fear Not, If the Fed Doesn’t Cut Rates
In the worst-cum-worst situation, if the Fed doesn’t cut interest rates, shares of NVR and Lennar would still scale upward, thanks to the presidential election in November. Kamala Harris, a Democratic nominee wants to boost construction activity and provide financial assistance to first-time home buyers.
Moreover, millennials are about to settle into a family life leading to increased demand for houses, a blessing for NVR and Lennar. Both stocks have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Investment Research
White Label
Data API
Web Plug-ins
Poster Maker
Affiliate Program
The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.
Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.