Market Review 02-08

Market Review 02-08

Upbeat New Zealand Employment Report to Curb NZD/USD Losses

 

By David Song

 

Updates to New Zealand’s Employment report may spur a rebound in NZD/USD as job growth is expected to increase 3.6% per annum in the second-quarter of 2018 versus the 3.1% expansion during the first three-months of the year.

 

Signs of a stronger labor market may put pressure on the Reserve Bank of New Zealand (RBNZ)to alter the forward-guidance for monetary policy at the next meeting on August 8, and Governor Adrian Orr & Co. may start to change their tune later this year as ‘ongoing spending and investment, by both households and government, is expected to support growth.’

 

In turn, a positive development may spark a bullish reaction in the New Zealand dollar as it encourages the RBNZ to lift the official cash rate (OCR) off of the record-low, but a set of below-forecast prints may fuel the recent weakness in NZD/USD as it casts a weakened outlook for the economy.

 

https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/trading_news_reports/2018/07/31/Upbeat-New-Zealand-Employment-Report-to-Curb-NZDUSD-Losses.html

 

 

Amazon Stock Seen Rising 17% on Glowing Forecasts

 

By Michael Kramer

 

Amazon.com Inc. (AMZN) has already risen by over 75% in the past year, and now analysts are looking for shares to increase by another 17%. Profits for the e-commerce company are expected to soar by more than six times in the coming third quarter, leading to the bullish outlook.

 

The company blew out its second-quarter results, nearly double analysts’ estimates. Amazon reported earnings per share of $5.07, versus estimates of just $2.54. Revenue was a different story, falling shy of forecasts by nearly 1% at $52.9 billion. The strong beat for Amazon’s soaring profits was on the success of the company’s web services unit (AWS) and advertising.

 

The bullish earnings outlook is resulting in analysts upping their price targets on the stock, with the average price target now at $2,095, an increase of about 17% from the shares’ current price of $1,785. Since the end of June, the average price target on the stock has increased by almost 11%.

 

https://www.investopedia.com/news/amazon-stock-seen-rising-17-glowing-forecasts/

 

 

AIG to Report Q2 Earnings: Is Disappointment in Store?

 

By Zacks Equity Research

 

American International Group Inc.’s (AIG) second-quarter 2018 results scheduled on Aug 2 after market close. Are expected to witness catastrophe loss, which occurred in and around the United States, in its General Insurance business. Premium in the North America business should be affected by the net impact of its reinsurance program and the strategic portfolio actions in U.S. Casualty and Property.

 

We, however, expect to see an underwriting loss in the to-be reported quarter as the company continues to take decisive actions and make investments to position itself for long-term profitable growth. In the last quarter, the company announced that it does not expect to see an underwriting profit through 2018.

 

The company doesn’t have an attractive earnings surprise history. It missed estimates in three of the last four reported quarters, with an average negative surprise of 15.6%.

 

https://www.zacks.com/stock/news/314534/aig-to-report-q2-earnings-is-disappointment-in-store

 

 

 

Toyota in Spotlight After Earnings Carnage at Global Auto Rivals

 

By Kevin Buckland and Nao Sano

 

While the world’s most valuable automaker will likely report modest sales and earnings growth for the most recent quarter on August 3, Chief Executive Officer Akio Toyoda faces a fight on every front.

 

Here are four charts that illustrate Toyota’s challenges:

 

1. Tariff Threat
Toyota isn’t alone in worrying about a potential U.S. tariff of as much as 25 percent on imported autos and parts, but it may have more at stake than many: Among its best-selling vehicles, almost half come from outside the U.S. All RAV4s — its most popular model — are imported into the country

 

2. Chasing China
After watching the chasm with China’s sales leaders Volkswagen AG and General Motors Co. widen to nearly 3 million vehicles last year from about half that in 2010, Toyota is taking new steps to catch up.

 

3. Prius Problems
For the first time in years, Toyota doesn’t make Japan’s top-selling car. That title now belongs to Nissan’s Note.

 

4. Whither the Yen?
The currency is always the elephant in the briefing room. Despite years spent localizing production to make more cars where they are sold, a one yen move against the dollar still adds or subtracts 40 billion yen from Toyota’s annual operating profit.

 

https://www.bloomberg.com/news/articles/2018-07-31/toyota-in-spotlight-after-earnings-carnage-at-global-auto-rivals

 

 

Facebook Seen Trouncing Bears by Rising 30%

 

By Matthew Johnston

 

Despite inciting bearish worries, Facebook Inc.’s (FB) big tumble that led to the largest single-day loss in market value by a single company in stock market history could be a huge buying opportunity.

 

The upside for Facebook is supported by expectations that revenues will still grow by at least 25% next year, even though that estimate is below the 35% revenue increase projected for this year. A growth rate that high would be one of the highest organic growth rates for companies with market capitalizations equal to or in excess of $100 billion.

 

https://www.investopedia.com/news/facebook-seen-trouncing-bears-rising-30/

 

 

Nikkei advances on strong corporate earnings, weaker yen

 

By Reuters Staff

 

Japan’s Nikkei share average rose on Wednesday, brushing a 12-day high, buoyed by strong earnings for blue chips such as Sony and Sharp and the yen’s slide to near two-week lows against the dollar.

 

“The gains by U.S. shares and the yen’s depreciation are supportive for the Nikkei. It has become easier for the market to focus on such supportive factors with the Bank of Japan’s policy meeting over,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

 

Reports that the Trump administration plans to propose slapping tariffs of 25 percent on $200 billion of Chinese imports, after initially setting them at 10 percent, were taken in stride for now.

 

Apple-linked shares also advanced after the iPhone maker posted quarterly results that topped Wall Street targets and forecast above-expected revenue in the current quarter.

 

https://www.reuters.com/article/japan-stocks-close/nikkei-advances-on-strong-corporate-earnings-weaker-yen-idUSL4N1US2O4

 

 

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