Since President Trump was released from the hospital, following his bout with the coronavirus, the headlines have turned towards the possibility of a new economic stimulus package. On both sides of the aisle, there’s a perception that the public needs this – support for unemployment benefits, support for small businesses, more cash injected into the system – as a new wave of COVID cases starts ramping up.
The stumbling block is partisan politics. House Democrats put together a $2.2 trillion proposal, but it was loaded down with the traditional Congressional pork: plenty of funds for majority party pet projects, that would not likely get funded otherwise. Trump, with support from Congressional Republicans, refused to accept it. The Democrats refused to back down. Both sides are now refusing to negotiate. The media wisdom is, this is a political defeat for the President in the run-up to the election.
But, however the political optics work out, the economy may survive without this life support, according to equity strategist Mike Wilson of Morgan Stanley.
“I don’t think we need stimulus in the next 30 days for the economy to stay afloat. There is no risk of a double dip recession in the next 30 days if we don’t get the stimulus done,” Wilson wrote.
In the longer run, Wilson is optimistic that a stimulus package will happen. He notes that it is in the interests of both political parties to pass it, and adds, “We still think stimulus is coming. It is now just a timing question before or after the election. Our best guess is probably after the election.”
Following Wilson’s lead, Morgan Stanley analysts are pounding the table on two stocks that look especially compelling. According to these analysts, each name is poised to surge at least 40% over the 12
For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Synaptics (SYNA) one of those stocks right now? A quick glance at the company’s year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.
Synaptics is one of 601 companies in the Computer and Technology group. The Computer and Technology group currently sits at #11 within the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. SYNA is currently sporting a Zacks Rank of #1 (Strong Buy).
Within the past quarter, the Zacks Consensus Estimate for SYNA’s full-year earnings has moved 62.37% higher. This shows that analyst sentiment has improved and the company’s earnings outlook is stronger.
Based on the most recent data, SYNA has returned 23.25% so far this year. Meanwhile, stocks in the Computer and Technology group have gained about 22.58% on average. This means that Synaptics is outperforming the sector as a whole this year.
Breaking things down more, SYNA is a member of the Electronics – Semiconductors industry, which includes 35 individual companies and currently sits at #64 in the Zacks Industry Rank. This group has gained an average of 29.54% so far this year, so SYNA is slightly underperforming its industry in this area.
SYNA will likely be looking to continue its
(Bloomberg) — An expected surge in election-related volatility in the U.S. stock market is paving the way for Asian shares to make a run at besting their American peers.
Since hitting an all-time low relative to the S&P 500 on Sept. 2, the MSCI Asia Pacific Index has outperformed the U.S. benchmark by almost five percentage points. That nascent trend is expected to persist at least through the November poll and potentially beyond, according to strategists.
“There is a better than average chance that Asian stocks will outperform U.S. stocks over the course of the next month,” said Eoin Murray, head of investment for international business at Federated Hermes. “The volatility rise will be more pronounced in U.S. risk assets, and will pervade more globally but with less strength.”
Fears about a contested election result and President Donald Trump’s decision not to push for further stimulus ahead of the vote have helped contribute to the recent weakness in U.S. equities. Meanwhile, a growing belief in a Joe Biden victory and Democrats winning control of both houses of Congress is seen benefiting Asian stocks by reviving the U.S. economy and trade flows.
Biden has a 12 point lead over Trump, according to a national poll of likely voters released Sunday, a little more than three weeks before the vote. The Washington Post/ABC News poll was conducted Oct. 6-9.
“The probability of Asian equities’ outperformance will be higher under a Democratic landslide win,” said Nader Naeimi, head of dynamic markets with AMP Capital. “I firmly believe that trend will continue, Asia is under-owned and the U.S. is over-owned.”
Asia will also benefit from China’s strong economic recovery, a weakening dollar that has likely seen an end
For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Maxar Technologies (MAXR) been one of those stocks this year? Let’s take a closer look at the stock’s year-to-date performance to find out.
Maxar Technologies is one of 614 companies in the Computer and Technology group. The Computer and Technology group currently sits at #11 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. MAXR is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for MAXR’s full-year earnings has moved 41.36% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Based on the most recent data, MAXR has returned 59.16% so far this year. At the same time, Computer and Technology stocks have gained an average of 23.36%. This means that Maxar Technologies is outperforming the sector as a whole this year.
To break things down more, MAXR belongs to the Satellite and Communication industry, a group that includes 10 individual companies and currently sits at #110 in the Zacks Industry Rank. On average, stocks in this group have lost 27.04% this year, meaning that MAXR is performing better in terms of year-to-date returns.
Investors with an interest in Computer and Technology stocks should continue to track MAXR. The stock will be looking to continue its solid
This is an update to the article “Playing Defense with Cloud Software Stocks” published on May 27th, 2020
Rebound numbers from Q3 will look spectacular following the paralyzing effects of strict shelter-in-place orders in Q2. The economy is officially in a recession after posting two negative quarters of GDP growth at (5%) in Q1 and (32%) GDP in Q2. The latest estimate from Atlanta’s Fed GDPNow for Q3 2020 is showing a record rebound of 35.3%.
This represents an increase of 7.9% quarter-over-quarter and 3.1% below the pre-recession high. For comparison purposes, the Financial Crisis of 2008 bottomed at 4.0% below its pre-recession during the third and fourth quarters of its recession.
The chart above shows the projected Q3 rebound of 35.3% from the Atlanta Fed’s GDP Now released on October 6th, 2020.
Cloud and IT Budgets: Staying Objective
Some will argue the market is not the economy (which is true), however, cloud software can’t stop the spiraling effects of lower IT/cloud spending and tighter budgets that follow a weaker economy. One area that companies might reduce costs is to trim down on the number of cloud software and tools they use. Unemployment could exacerbate this if the subscriptions are paid per employee.
Spiceworks recently released a survey that shows 80% of IT-decision makers expect IT budgets to grow or stay steady over the next 12 months. This supports the notion that even during periods of uncertainty, IT and cloud are central and critical to operations.
With that said, the decision-makers polled stated the primary drivers in IT budgets are noted to decrease year-over-year except covid-related budget allocations. In the past, drivers such as employee growth, security concerns, and the