Chicago, IL – November 5, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: DBS Group DBSDY, Moody's MCO and Amphenol APH.
With 75 million votes already cast (perhaps 50% of the estimated total) remaining voters across the U.S. head to physical polls on Tuesday.
Americans are about to pick a President and set up a new Congress.
Who is to govern the world's biggest economy? This has wide-ranging consequences for financial markets.
Monetary policy matters this week too.
Policy-rate setting meetings happen for the U.S. FOMC, as well as for their U.K., Australia and Brazil peers.
Finally, global trade from China and Europe is a macro data focus.
The U.S. election cycle that has already rattled asset prices finally comes to a head.
Recent gains in Treasury yields and the dollar are seen by some traders as the market anticipating a win for Trump. But polls suggest a very close race with Harris, meaning that a victory by the Democrat could spark a rash of trading unwinds.
Investors may just be rooting for a clear result, fearing a potentially contested election and lengthy period of uncertainty about the government makeup as a significant risk to markets.
Meanwhile, Bitcoin — the ultimate Trump trade — is nearing an all-time high again.
The day after the U.S. election, the Fed kicks off its meeting on interest rates.
The elephant in the monetary policy room is how the decisions by the next U.S. president will impact growth and inflation dynamics.
For now, recent data shows a stronger-than-expected U.S. economy has led some investors to question whether the Fed miscalculated when it kicked off the current easing cycle with a jumbo-sized 50-basis point rate cut in September.
A more modest 25-basis point reduction is expected on Thursday.
Investors hope the Fed's statement and Chairman Jerome Powell's news conference will show whether policy makers believe economic resilience will continue — and if they might cut rates less than expected as a consequence.
Futures linked to the Fed's policy rate showed investors pricing in about 120 basis points of cuts by year-end.
(3) How will other major central banks move on monetary policy?
Where the Fed goes, other central banks often follow.
But the outcome of the U.S. election could skew this dynamic.
A Trump victory — and potential tit-for-tat trade war — would weigh on export-reliant economies.
The resulting rise in U.S. inflation and a stronger dollar might force the Fed to cut rates more slowly, while other central banks are left to grapple with a hit to growth from those extra duties.
For now, it's business as usual.
The Bank of England is expected to cut rates by 25 bps on Thursday.
Possible inflationary effects of the Labour government's new budget might mean fewer cuts in 2025, no matter what happens in the U.S.
Down under, sticky inflation means there is virtually no chance of a cut from the Reserve Bank of Australia on Tuesday until next year.
(4) On Thursday, Mainland China announces trade figures.
China announces October trade figures on Thursday. Some fear this might be one of the last times investors can expect upbeat export numbers, depending on who takes the White House.
Trump's threat of 60% tariffs on China has rattled the country's industrial complex, which sells goods worth more than $400 billion annually to the United States.
With export momentum having been the lone bright spot for China's struggling economy, a Trump victory would likely have huge ramifications.
October inflation data due on Nov. 9th — the first full-month reading since Chinese authorities unveiled the September raft of stimulus measures to pull the economy out of its deflationary funk.
(5) Emerging market outflows at a 2-year high.
Mexico, jointly with China, is a weather vane for U.S.-emerging market relations and has seen the peso touch a two-year low, with concerns over the election amplifying domestic woes.
Emerging market outflows have, by some measures, scaled two-year highs, fueled by a mix of a strong dollar, high U.S. yields and a general de-risking desire.
That will raise pressures on emerging market central banks near and far.
Brazil's central bank, which has been front-running the Fed, has already returned to a hiking cycle.
Policy makers are expected to lift interest rates by 50 bps on Wednesday, following a 25-bps increase in September to 10.75%. Economists now see inflation ending the year slightly above the 4.5% upper end of the official target range.
Policy makers in emerging Europe might be in line for more pressure as well.
Poland's central bank, which has held rates for a just over a year now, releases its decision on Wednesday and the Czech Republic is expected to deliver another rate cut on Thursday.
Zacks #1 Rank (STRONG BUY) Stocks
(1) DBS Group: This is a $117 a share stock, identified as a Foreign Bank, with a market cap of $83B. I see a Zacks Value score of F, a Zacks Growth score of F and a Zacks Momentum score of D.
DBS Group Holdings Ltd. is the holding company of DBS Bank, one of the largest companies in terms of market capitalization. Shares are listed on the Singapore Exchange.
DBS Group Holdings Ltd. and its subsidiaries form one of the largest banking groups in the region, in terms of shareholders' funds, and total assets.
DBS is also a leading bank in Hong Kong.
(2) Moody's: This is a $454 a share stock, found in the Financial-Miscellaneous Services industry, with a market cap of $82.3B. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of B.
Moody's Corporation is a leading provider of credit ratings, research, data & analytical tools, software solutions & related risk management services, quantitative credit assessment services, credit training services and credit process software to banks and other financial institutions.
Moody's reports its businesses under the following two operating divisions:
Moody's Investors Service (MIS)(consisting of 48.1% of total revenues in 2023) provides credit ratings and research covering debt instruments and securities. Revenues from MIS comprise ratings revenues from Structured Finance; Corporate Finance; Financial Institutions; and Public, Project and Infrastructure Finance.
Moody's Analytics (MA)(51.9%) offers a wide array of products and solutions related to the financial and risk management activities of institutions. It has three lines of business: Decision Solutions – which provides software and workflow tools for specific use cases; Research and Insights – which provides models, scores, expert insights and commentary; and Data and Information – offering vast data sets on economies, companies, commercial properties and financial securities.
Over the years, Moody's has made several notable acquisitions including Wall Street Analytics (2006), Fermat International (2008), Copal Partners (2011), Amba Investment Services (2013), ICRA Ltd. (2014) and Equilibrium (2015). In 2016, the company acquired Korea Investors Service and GGY.
· In 2017, Moody's acquired the structured finance data and analytics business of Frankfurt-based SCDM and Netherlands-based Bureau van Dijk. In 2018, it acquired Omega Performance and Reis Inc.
· In 2019, it acquired ABS Suite and RiskFirst. In 2020, the company purchased Regulatory DataCorp, London-based RBA International, ZM Financial System and Acquire Media.
· In 2021, it acquired Catylist Inc., Cortera, RMS, Bogard AB and PassFort Limited.
· In 2022, it acquired 360kompany AG.
· In 2023, it acquired SCRiesgo.
· In July 2024, it acquired Global Credit Rating Company Limited (GCR) and took over Praedicat in September 2024.
Moody's divested the Analytics Knowledge Services business in 2019.
(3) Amphenol: This is a $67 a share stock, found in the Electronics-Connectors industry, with a market cap of $80.8B. I see a Zacks Value score of D, a Zacks Growth score of C, and a Zacks Momentum score of A.
Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable.
Amphenol's manufacturing facilities are generally vertically integrated operations from the initial design stage through final design and manufacturing. The company's manufacturing presence is in more than 30 countries.
Amphenol reported net sales of $12.55 billion in 2023 (effective Jan 1, 2022).
Amphenol aligned its businesses into three newly formed reportable business segments: (i) Harsh Environment Solutions, (ii) Communications Solutions and (iii) Interconnect and Sensor Systems.
· Harsh Environment Solutions segment designs, manufactures and markets a broad range of ruggedized interconnect products, including connectors and interconnect systems, printed circuits and printed circuit assemblies and other products.
· Communications Solutions segment designs, manufactures and markets a broad range of connector and interconnect systems, including high speed, radio frequency, power, fiber optic and other products, together with antennas.
· Interconnect and Sensor Systems segment designs, manufactures and markets a broad range of sensors, sensor-based systems, connectors and value-add interconnect systems.
Automotive, Broadband Communications, Commercial Aerospace, Industrial, Information Technology and Data Communications, Military, Mobile Devices and Mobile Networks are the primary end markets served by the company.
Amphenol's primary competitors include Carlisle, Commscope, Delphi, Sensata, TE Connectivity, 3M, among others.
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