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The Zacks Analyst Blog Highlights Deutsche Telekom, BYD and AirBnB

For Immediate Release

Chicago, IL – September 27, 2022 – 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: Deutsche Telekom DTEGY, BYD Company BYDDY and AirBnB ABNB.

Here are highlights from Monday’s Analyst Blog:

Q3 Offers +1.1% EPS Growth: Global Week Ahead

In the Global Week Ahead, a weak Japanese yen could get to the market spotlight. Last week, the Bank of Japan (BoJ) intervened to buy yen — for the first time since 1998.

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Global stock traders also remain on watch, regarding ratcheting-up tensions between Putin's Russia and the West.

Italian election results, the latest Euro area consumer price inflation (CPI) numbers, and U.S. and Chinese macro data also supply equity trader insights this week.

Increasing headwinds have impacted the S&P500's EPS growth expected for Q3. That is now down to a paltry +1.1% rate.

Ex-Energy? Q3 EPS is down to -5.6%.

Here are Reuters' five world market themes, reordered for equity traders—

(1) Can the U.S. Consumer Keep Spending?

Can the U.S. consumer defy sizzling inflation and rising borrowing costs?

Tuesday's Consumer Confidence measure will indicate how this key pillar of the economy is holding up.

Last month, the Conference Board's overall Consumer Confidence index rebounded to 103.2, ending three straight monthly declines. This month's index is expected to come in at 104, a Reuters poll suggests.

In one positive sign, data earlier this month showed U.S. retail sales unexpectedly rebounded in August as Americans ramped up purchases of motor vehicles and dined out more thanks to lower gasoline prices.

But with stock markets faltering and bond yields climbing, whether consumers remain upbeat is yet to be seen — especially given a Fed intent on bringing inflation down even at the expense of a sharp slowdown in growth.

(2) The Strong U.S. Dollar

Japan's authorities finally had enough of a weak yen and intervened to stem a sharp decline against the dollar.

But will it work?

The runaway greenback is up more than +20% on the yen this year, and some doubt it's got much left in the tank. But as U.S. rates rise, Japan's are stuck just below 0% and unlikely to budge.

So, the case for a strong dollar remains.

Japan, alongside neighbors China and Korea also pushing back on the dollar, may find itself fighting fundamentals, the market and the Fed.

Dealers in Seoul suspect authorities have already been selling dollars, but the won keeps sliding.

Likewise, China's yuan has forged new lows although the central bank has pushed back via the trading band. Friday's China PMI readings, if disappointing, could add to the bear case.

(3) On Friday, Euro Area Consumer Price Inflation Comes Out

The "flash" estimate of September Euro area consumer price data is out on Friday and should show inflation at a fresh record high above +9%.

Investors have already ramped up expectations for another 75 bps ECB rate hike in October, so the data shouldn't change the near-term rate outlook.

Yet any signs that underlying price pressures are broadening out, could further push up expectations for where rates in the bloc end up.

The ECB is increasingly hawkish in its rhetoric and some ECB watchers say a mega 100 bps rate hike cannot be ruled out in coming months.

Indeed, that's what Sweden's Riksbank just did, as did the Bank of Canada in July.

(4) Putin's Desperate Military Mobilization

Russian President Vladimir Putin's military mobilization order, threats to use nuclear weapons and a push to annex swaths of Ukrainian territory mark a new stage in the seven-month-old conflict.

The announcements — coinciding with the diplomatic highlight of the year that is the UN General Assembly meeting — were condemned globally and triggered fresh protests in Russia, where draft-age Russians headed abroad to escape Moscow's biggest conscription drive since World War II.

The latest escalation has reverberated across markets: oil prices are sharply higher, raising the specter of more pain on the energy front for Europe.

Meanwhile, European Union foreign ministers are readying another package of sanctions — their eighth one — which could be formalized in mid-October.

(5) The Italian Election

When Italy last went to the polls in 2018, markets were rattled by anti-euro rhetoric from populist parties.

After last Sunday's vote, a right-wing alliance led by Giorgia Meloni's Brothers of Italy party was on course for a clear majority in the next parliament, giving the country its most right-wing government since World War II.

Meloni, as leader of the largest coalition party, was also likely to become Italy's first woman prime minister.

Her Brothers of Italy party traces its roots to a post-fascist movement. But Meloni, a favorite to succeed Mario Draghi and become Italy's first female PM, has embraced an EU-friendly face, reassuring investors.

Italy's 10-year bond yield gap over Germany has widened from the post-pandemic lows but is far from levels seen in 2018. Still, the size of Meloni's grip on parliament will be watched closely.

Investors may welcome a solid majority that falls short of the two-thirds needed to change the constitution, which could cause instability.

How a new government navigates an energy crunch that is pushing highly-indebted Italy into recession will also be under scrutiny.

Zacks #1 Rank (STRONG BUY) Stocks

I found three interesting globally-related names to look into this week.

(1) Deutsche Telekom : This is a $18.40 a share Diversified Telecom industry stock, with a market cap of $87B. I see a Zacks Value score of A, a Zacks Growth score of B and a Zacks Momentum score of C.

(2) BYD Company : This is a $54 a share Mainland China Electric Vehicle industry stock, with a market cap of $74B. I see a Zacks Value score of D, a Zacks Growth score of C and a Zacks Momentum score of D.

(3) AirBnB : This is a $103 a share Internet Home Rental industry stock, with a market cap of $74.0B. I see a Zacks Value score of F, a Zacks Growth score of A and a Zacks Momentum score of A.

Amidst the rates-driven and geopolitical turmoil, there are positive earnings dynamics happening.

They are being picked up by covering analysts.

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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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Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report
 
Byd Co., Ltd. (BYDDY) : Free Stock Analysis Report
 
Airbnb, Inc. (ABNB) : Free Stock Analysis Report
 
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