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The Zacks Analyst Blog Highlights Apple, FedEx, Marathon Petroleum and Stellantis

For Immediate Release

Chicago, IL – May 2, 2023 – 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: Apple AAPL, FedEx FDX, Marathon Petroleum MPC and Stellantis STLA.

Here are highlights from Monday’s Analyst Blog:

Is This the 'Terminal' Fed Hike? Global Week Ahead

In the Global Week Ahead, regular monetary policy meetings held by:

  • The U.S. Fed

  • The European Central Bank (ECB), and

  • Australia's central bank (the RBA) top the agenda

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The mega-cap tech company Apple Inc. brings the U.S. Q1 earnings season mostly to an end.

All of this happens as financial markets work through fresh regional banking tremors, brought on by First Republic Bank in San Francisco, CA.

Next are Reuters’ five world market themes, reordered for equity traders—

(1) On Wednesday, One More 25bps Policy Rate Hike from the FOMC?

The Fed is expected to deliver another 25-basis point interest rate increase on Wednesday and signal a pause in its most aggressive rate-hiking cycle since the 1980s.

Policymakers and markets remain at odds over the rates trajectory: The world's top central bank projects borrowing costs to remain at around current levels through 2023, investors are betting on cuts after the summer.

Signs the Fed may be coming around to the market’s view could push Treasury yields lower - in theory benefiting the big mega-cap stocks that led markets higher this year.

Futures markets show investors pricing a nearly 90% chance of a rate increase. But confidence in a 25-basis point rate hike has wavered in recent days after problems at lender First Republic (FRC) reignited concerns over the U.S. banking sector.

(2) On Thursday, Mega-cap Apple Reports Q1 Earnings

The U.S. corporate earnings season reaches a crescendo on Thursday with results from Apple, the largest U.S. company by market value, at $2.6 trillion.

Along with other mega-cap stocks, Apple has led the S&P 500's rally in 2023, giving the company even more heft in indexes.

Apple's over-7% weight in the S&P500 is bigger than the entire energy sector and nearly matches the consumer staples group.

The iPhone maker is expected to post $93 billion in revenue for its fiscal second quarter - a 4.4% drop year-on-year, Refinitiv data shows. Analysts expect a nearly -6% drop in earnings per share to $1.43.

The report from Apple, whose widely used products and services include MacBooks and iPads but also banking, is a gauge for global consumer demand, and its results stand to ripple through markets given its importance to a number of industries.

(3) On Thursday, European Central Bank (ECB) Follows FOMC with Policy Rate Hike

The ECB will likely lift rates for a seventh straight time on May 4th and policymakers appear to be converging on a 25-basis point hike rather than a larger 50-bp increase.

Yet key inflation and bank lending data releases in the days ahead could sway that outcome.

With some stability returning to the banking sector after the March rout, hawks may feel confident pushing for a large hike.

Tuesday's flash April inflation data is likely to confirm underlying price pressures — running above 5% — remains uncomfortably high. Some 2.5 million employees in Germany's public sector will get a 5.5% permanent increase next year, a sign that wage pressures are picking up.

But if bank lending data, also out Tuesday, shows credit conditions have tightened substantially, doves could feel emboldened to push back.

(4) On Tuesday, Reserve Bank of Australia (RBA) Offers Policy Settings

Bets for a return to policy tightening by the Reserve Bank of Australia on Tuesday have fizzled out, after a soft reading of consumer prices added to evidence that inflation peaked at the end of last year.

That has put the Aussie dollar under pressure, keeping it pinned near the closely watched $0.66-mark, even when the greenback wilted against other major peers.

RBA governor Philip Lowe has stressed a pause at the April meeting did not necessarily mean the tightening cycle is over, and minutes showed a hike was hotly debated.

Whether Lowe, whose term ends in September, will be around to oversee further moves is another question.

Speculation is rife that, unlike his two predecessors, he won't be asked to stay on.

(5) U.K. Macro Data Updates on Struggling Economy

The U.K.'s 1970s-style inflation and near-zero growth isn't a good look.

There isn't a credit crunch — yet — according to a recent Bank of England survey. But lenders expect rising defaults on consumer credit, mortgages and corporate loans.

Data on Tuesday will show whether house prices are indeed moderating, and if the decline in mortgage lending is stabilizing. New car sales, which in March hit 18-month highs, will also be under scrutiny.

Brits loaded up on credit card debt at the fastest pace in a 24-month period since early 2006 in February and data from the BoE on Thursday will show how that trend is evolving.

This kind of borrowing isn't cheap. BoE stats show the average interest rate on a UK credit card is 22.5% — its highest since the mid-1990's. And with more rate rises in the pipeline, the pressure is only likely to intensify.

Meanwhile Prime Minister Rishi Sunak faces his first big electoral test on May 4 in local polls where the opposition Labor Party hopes to capitalize on a year of chaos for the governing Conservatives.

Zacks #1 Rank (STRONG BUY) Stocks

Here are three large-cap tech stocks, with Zacks B rating for growth.

(1) FedEx: This is a $226 stock in the Transportation- Air Freight and Cargo space.

It has a market cap of $56.8B. I see a Zacks Value score of B, a Zacks Growth score of D, and a Zacks Momentum score of A.

FedEx Corp. is the leader in global express delivery services.

The company, founded in 1971, provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand.

The company is currently reporting, primarily through the FedEx Express, FedEx Ground, and FedEx Freight segments. These segments contributed 49%, 35.5% and 10.2%, respectively, to the company’s total revenues in fiscal 2022.

FedEx is based in Memphis, TN.

(2) Marathon Petroleum: This is a $121 stock. It is found in the Oil and Gas Refining industry.

It has a market cap of $54.1B. I see a Zacks Value score of A, a Zacks Growth score of A, and a Zacks Momentum score of B.

Marathon Petroleum Corp. is a leading independent refiner, transporter and marketer of petroleum products.

The company, in its current form, came into existence following the 2011 spin-off of Houston, TX-based Marathon Oil’s refining/sales business into a separate, independent and publicly-traded entity.

In October 2018, Marathon Oil completed the acquisition of its rival Andeavor in a $23.3 billion deal, thereby becoming the nationwide largest refining company by market capitalization. The deal also made the company the largest U.S. refiner and the fifth largest in the world by capacity.

Marathon is based in Findlay, OH.

(3) Stellantis: This is a $16 stock in the Foreign-Auto space.

It has a market cap of $51.4B. I see a Zacks Value score of A, a Zacks Growth score of B, and a Zacks Momentum score of A.

Stellantis N.V. is an automaker and a mobility provider.

Stellantis N.V., formerly known as Fiat Chrysler Automobiles N.V., is based in Lijnden, Netherlands.

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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.

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Apple Inc. (AAPL) : Free Stock Analysis Report

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Stellantis N.V. (STLA) : Free Stock Analysis Report

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