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☆ History says stocks could rise 22% in the next year as the market rally builds momentum — and investors can profit by buying these 11 stocks, according to BMO Capital Markets
▼ + stars: | 2023-06-03 | by ( James Faris | ) www.businessinsider.com time to read: +3 min

But leading strategists at BMO don't see that narrow breadth as a serious concern. Investors shouldn't be too unsettled by the bad breadth in the stock market this year, according to top strategists at BMO Capital Markets. BMO Capital MarketsThose tech giants have beaten the broader market each of the first five months of 2023 and have crushed the S&P 500 overall. BMO Capital Markets"We found that narrow market breadth in general does not represent a bad omen for S&P 500 performance despite the contrary narrative being pushed by many investors," Belski wrote. Such scenarios have put the S&P 500 in positive territory 100% of the time in the following three and six months, with returns of at least 6%, Belski noted.

Persons: Brian Belski, Belski Organizations: BMO, BMO Capital Markets, Microsoft, Nvidia, BMO Capital

☆ US employers boost hiring in May; unemployment rate jumps to 3.7%
▼ + stars: | 2023-06-02 | by ( Lucia Mutikani | ) www.reuters.com time to read: +5 min

The increase in the unemployment rate from a 53-year low of 3.4% in April reported by the Labor Department on Friday was mostly driven by Blacks. The backfilling of these retirements and increased demand for services are some of the factors driving job growth. Most economists expect overall payrolls growth to continue at least through the end of the year. The drop in household employment combined with a 130,000 increase in the labor force to boost the unemployment rate. The unemployment rate for blacks jumped to 5.6% from 4.7% in April.

Persons: payrolls, Sal Guatieri, Nick Bunker, Lucia Mutikani, Chizu Nomiyama, Andrea Ricci Organizations: Labor Department, Blacks, BMO Capital Markets, Fed, Reuters, Treasury, Reuters Graphics Reuters, Leisure, Writers Guild of America, Labor Department's Bureau of Labor Statistics, Thomson Locations: WASHINGTON, U.S, Toronto, joblessness

☆ US employers boost hiring in May, but labor market losing steam
▼ + stars: | 2023-06-02 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

Outside the COVID-19 pandemic, it was the biggest jump since 2010, reflecting a drop in household employment and a rise in the workforce. "However, the other areas of softness in this report suggests that the labor market is losing steam. The backfilling of these retirements and increased demand for services are some of the factors driving job growth. While not dismissing the household survey, economists said the establishment survey was the more reliable of the two. The fall in household employment combined with a rise of 130,000 in the labor force to boost the unemployment rate.

Persons: payrolls, Sal Guatieri, Nonfarm, Mike Blake, Gus Faucher, Conrad DeQuadros, DeQuadros, Daniel Zhao, Lucia Mutikani, Chizu Nomiyama, Andrea Ricci, Paul Simao Organizations: Labor Department, BMO Capital Markets, Fed, Reuters, Leisure, Treasury, REUTERS, Reuters Graphics Reuters, Financial, Writers Guild of America, Labor Department's Bureau of Labor Statistics, PNC Financial, Brean, Thomson Locations: WASHINGTON, U.S, Toronto, Oceanside , California, Pittsburgh , Pennsylvania, New York

☆ If there's no dramatic market change, retail will have repricing opportunities: BMO's Simeon Siegel
▼ + stars: | 2023-06-02 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailIf there's no dramatic market change, retail will have repricing opportunities: BMO's Simeon SiegelSimeon Siegel, senior analyst at BMO Capital Markets, joins 'Closing Bell' to discuss Lululemon seeing a surge in its stock after a Q1 earnings sales beat.

Persons: BMO's Simeon Siegel Simeon Siegel Organizations: BMO Capital Markets

Macy's also slashed its full-year earnings and sales guidance, after "demand trends weakened" for discretionary items in March. Dollar General — Shares tumbled 9% after the company reported an earnings and revenue miss for the first quarter. The lingerie retailer reduced its full-year revenue guidance in the low-single digits range from the prior mid-single digit range estimates. Veeva also raised its full-year earnings per share guidance by 26 cents. The company's full-year revenue guidance also topped analysts' estimates.

Persons: Nordstrom, Nordstrom's, Salesforce, Okta, Okta's, Macy's, CrowdStrike's, Refinitiv, Veeva, Macheel, Samantha Subin, Jesse Pound, Michelle Fox Organizations: BMO Capital, Saudi Arabia's Public Investment Fund, Chewy, —, JPMorgan, CSX, UBS, Systems Locations: New York City, Canada

☆ US labor market still tight as job openings rise, layoffs fall
▼ + stars: | 2023-05-31 | by ( Lucia Mutikani | ) www.reuters.com time to read: +5 min

The Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Wednesday also showed layoffs declining significantly last month. There were 1.8 job openings for every unemployed person in April, up from 1.7 in March. Data for March was revised higher to show 9.75 million job openings instead of the previously reported 9.59 million. There were 185,000 more job openings in healthcare and social assistance, while vacancies jumped by 154,000 in the transportation, warehousing, and utilities. But Walker also acknowledged that some of the alternative measures of job openings could be downwardly biased, as their sample could be skewed toward companies which are more likely to have an online presence and have cut job openings sharply.

Persons: Priscilla Thiagamoorthy, Goldman Sachs, Ronnie Walker, Walker, JOLTS, Julia Pollak, Lucia Mutikani, Paul Simao, Andrea Ricci Organizations: Federal Reserve, Labor, Survey, Labor Department, Fed, BMO Capital Markets, Reuters, Treasury, ZipRecruiter, Thomson Locations: WASHINGTON, U.S, Toronto

☆ Nvidia pulls back after recent surge. Here's what the pros have to say
▼ + stars: | 2023-05-31 | by ( Christina Falso | ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailNvidia pulls back after recent surge. Here's what the pros have to sayJim Cramer, Brian Belski of BMO Capital Markets and Joe Terranova of Virtus Investment Partners on what they think about Nvidia after the stock fell Wednesday.

Persons: Jim Cramer, Brian Belski, Joe Terranova Organizations: Nvidia, BMO Capital Markets, Virtus Investment Partners

☆ The 5 largest mega-cap stocks are responsible for most of the rally in the S&P 500 this year - but the market can still gain if Big Tech fades
▼ + stars: | 2023-05-31 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Apple, Nvidia, Alphabet, Microsoft and Amazon have fronted the S&P 500's advance so far in 2023. But if the rally in those mega-caps fades, the market can still post gains, said BMO Capital MarketsAlso, narrow market breadth generally "does not represent a bad omen for S&P 500 performance." In the 12 months afterward, the S&P 500 climbed an average of 22.2%. Six months out, the S&P 500 was up more than 12%, and 12 months out, it had tacked on 43.6%. "Our work shows that the S&P 500 index recorded a 13.2% annualized price return during these periods of narrowing market breadth with the only loss coming in 2001-2003," he wrote.

Persons: —, peters, ChatGPT, Brian Belski, Belski Organizations: Apple, Nvidia, Microsoft, BMO Capital Markets, Service, Amazon, BMO

Average house prices as measured by the S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas were forecast to stagnate next year. "Looking ahead, we think there is scope for prices to fall a little further. "Given supply is likely to stay tight, there is a risk house prices may not fall as much as we previously expected." The 30-year fixed mortgage rate, currently around 6.7%, was expected to average 6.2% in 2023. Those high mortgage rates are restricting housing supply, which puts upward pressure on prices, as well as demand.

Persons: Sam Hall, haven't, Sal Guatieri, Indradip Ghosh, Prerana Bhat, Aditi Verma, Maneesh Kumar, Jonathan Cable, Ross Finley, Sharon Singleton Organizations: stagnating, Reuters, U.S . Federal Reserve, Capital Economics, BMO Capital Markets, Thomson Locations: BENGALURU

Reflecting investor optimism about passage, the cost of insuring exposure to a U.S. debt default dropped on Tuesday, but some concerns remained because of the tight timeline and opposition from some lawmakers. Last week, credit rating agency Fitch placed its "AAA" rating of U.S. sovereign debt on watch for a possible downgrade, citing downside risks including political brinkmanship and a growing debt burden. In a previous debt ceiling crisis in 2011 rating agency Standard & Poor's cut the U.S. top 'AAA' rating by one notch a few days after a debt ceiling deal, citing political polarization and insufficient steps to right the nation's fiscal outlook. "Even if a U.S. default is averted, a ratings downgrade could still happen," Vishwanath Tirupattur, a strategist at Morgan Stanley, said in a research note on Sunday. Some also fear a debt ceiling resolution could only provide short-term relief to markets because the U.S. Treasury is expected to quickly refill its account with bond sales, sucking out hundreds of billions of dollars of cash from the market.

Persons: Joe Biden, Kevin McCarthy, Fitch, Raymond James, Ed Mills, Alex Anderson, Vishwanath Tirupattur, Morgan Stanley, Spokespeople, Blair Shwedo, Davide Barbuscia, Shankar Ramakrishnan, Pete Schroeder, Megan Davies, David Gregorio Our Organizations: YORK, Democratic, Republican, U.S . Treasury Department, BMO Capital Markets, AAA, Moody's, U.S . Treasury, Thomson Locations: U.S

☆ Alberta heads to the polls with Canada's green agenda in balance
▼ + stars: | 2023-05-29 | by ( Nia Williams | ) www.reuters.com time to read: +4 min

[1/2] Alberta Premier Danielle Smith speaks during the Canada Strong and Free Networking Conference in Ottawa, Ontario, Canada March 23, 2023. The battle between populist Premier Danielle Smith's United Conservative Party (UCP), which is seeking a second consecutive term, and Rachel Notley's left-leaning New Democratic Party (NDP) is expected to be extremely close, pollsters say, even though Alberta is traditionally a conservative bastion. Alberta is Canada's highest-emitting province, largely due to vast oil sands operations in the northern boreal forest and produces 80% of the country's 4.9 million barrels per day of crude oil. She held another major rally in NDP stronghold and Alberta capital Edmonton on Sunday. Polls are open from 9 a.m. to 8 p.m. local time and the result is expected to be called late Monday night.

May 28 (Reuters) - Good news of a tentative deal for the U.S. debt ceiling impasse may quickly turn out to be bad news for financial markets. "That's where the debt ceiling matters." In that case, "the impact on broader financial markets would likely be relatively muted," Daniel Krieter, director of fixed income strategy, BMO Capital Markets, said in a report. Some bankers said they fear financial markets may not have accounted for the risk of a liquidity drain from banks' reserves. Bankers put it to hope that the debt ceiling impasse would be resolved without significant dislocation to markets, but warn that's a risky strategy.

☆ Dynatrace will become a leader in A.I. space, says BMO Capital's Keith Bachman
▼ + stars: | 2023-05-22 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailDynatrace will become a leader in A.I. space, says BMO Capital's Keith BachmanBMO Capital Markets' Keith Bachman joins 'The Exchange' to discuss how Dynatrace uses A.I. to support a company's operations, and the case for Dynatrace's success in application security and business analytics.

☆ The AI play you haven't heard of yet
▼ + stars: | 2023-05-19 | by ( Samantha Subin | ) www.cnbc.com time to read: +2 min

This under-the-radar software stock could be the next big artificial intelligence winner investors are ignoring, according to some Wall Street analysts. Dynatrace , a Massachusetts-based software company that harnesses artificial intelligence for a host of use cases, including business analytics and application security, could win big in the latest AI arms race. DT YTD mountain Dynatrace shares in 2023 BMO Capital Markets' Keith Bachman called the stock a "clear leader" within AI in a Wednesday note to clients. He views compelling growth and margin opportunities for Dynatrace through its Grail analytics tool that uses AI to help users better understand their data. Given his conviction in Dynatrace's AI potential, Bachman raised his price target to $55 from $50 a share reflecting about 12% upside from Thursday's close.

☆ Bath and Body Works' stock surges after it raises guidance, beats on earnings
▼ + stars: | 2023-05-18 | by ( Gabrielle Fonrouge | In Gabrielle-Fonrouge | ) www.cnbc.com time to read: +2 min

Bath and Body Works ' stock jumped more than 10% in premarket trading Thursday after it beat fiscal first quarter earnings expectations and raised its guidance. It expects adjusted earnings per share to be between $2.68 and $3.08 for the year. The retailer expects earnings per share of 27 to 32 cents in the next quarter, compared to an estimate of 32 cents a share. It reaffirmed its full year sales forecast of flat net sales to a mid-single digit decline. As consumers become more cautious and retail discounts and promotions tick up against a tough macroeconomic backdrop, Bath and Body Works margins dropped.

"Put simply, inflation is more than double the Fed's target rate and the unemployment rate is below every FOMC participant's estimate of the natural rate. "In our view, rather than lean against a mild recession, the Fed would view it as an acceptable price for bringing inflation back down to target." A slight majority, 22 of 41 respondents, said the risk of a default was higher this time compared to prior episodes of debt ceiling brinkmanship. Elevated worries about a default will push U.S. Treasury yields higher over the coming weeks, a separate Reuters poll showed. The macroeconomic consequences of a short default would be somewhat more severe."

☆ US consumer spending appears solid early in second quarter
▼ + stars: | 2023-05-16 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

Retail sales excluding automobiles, gasoline, building materials and food services rebounded 0.7% last month, the Commerce Department said. Data for March was revised slightly down to show these so-called core retail sales slipping 0.4% instead of 0.3% as previously reported. Core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists estimated that core retail sales adjusted for inflation rose by about 0.6% in April. Sales at food services and drinking places, the only services category in the retail sales report, rose 0.6%.

BMO Capital Markets says Gilead Sciences is a "best-in-class" therapy franchise that could soon see multiple expansion. The firm upgraded shares to outperform from market perform and raised its price target to $100 from $90. The new price target implies shares rallying 27.5% from Monday's close. Analyst Evan David Seigerman said that, in addition to Gilead's strong therapy franchise, its improving solid tumor oncology business and durable-growth anchored by its HIV/virology division could lead to strong growth. "While we note that Gilead currently trades at a discount to large-cap peers, continued de-risking of its oncology franchise could drive multiple expansion."

☆ TSX tumbles after hotter-than-expected inflation data
▼ + stars: | 2023-05-16 | by ( Johann M Cherian | ) www.reuters.com time to read: +2 min

A report by Statistics Canada showed that April annual consumer inflation had surprisingly ticked up, fueled by higher rental and mortgage interest costs. "Underlying core inflation is settling in around 4%, which is clearly still too high for the BoC's comfort." ET (14:14 GMT), the Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) was down 235.32 points, or 1.15%, at 20,304.65. The materials sector (.GSPTTMT) tumbled 1.4% and was the biggest drag on the TSX, tracking weak base- and precious-metal prices. Reporting by Johann M Cherian and Vansh Agarwal in Bengaluru; Editing by Pooja DesaiOur Standards: The Thomson Reuters Trust Principles.

☆ Canada housing market upturn could delay shift to BoC rate cuts
▼ + stars: | 2023-05-14 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

The housing market's upturn comes after the Bank of Canada paused its interest rate hiking campaign last month, leaving the benchmark rate at a 15-year high of 4.50% since January. A rebound in the housing market could boost activity and contribute directly to price pressures. "The Bank of Canada at the end of the day is probably not going to be too thrilled if the housing market really starts to ramp up," said Robert Kavcic, a senior economist at BMO Capital Markets. In addition, variable-rate borrowers have been sheltered from higher interest rates after lenders temporarily extended the period over which their debt is amortized, keeping their payments the same. But there are also tailwinds to support a recovery, including supply shortfalls, record immigration and labor market strength, analysts said.

☆ As shoppers look for savings, Nordstrom hopes Rack stores can fuel its revival
▼ + stars: | 2023-05-12 | by ( Melissa Repko | In Melissa-Repko | ) www.cnbc.com time to read: +9 min

The success or failure of the Nordstrom Rack turnaround effort could shape the company's future. Those chains such as T.J.Maxx , Ross Stores and Burlington Stores , have opened more stores and wooed new customers, driving higher foot traffic than Nordstrom Rack has seen. Nordstrom Rack stores outnumber the company's namesake stores, with 241 locations across the country, according to company filings. Nordstrom Rack stores accounted for more than 40% of new customers in 2022, CEO Erik Nordstrom said on the March earnings call. As it pins its growth hopes on the off-price locations, Nordstrom has turned Rack stores into e-commerce hubs, too.

☆ Starbucks, Estée Lauder, Qualcomm: Global companies warn of slower-than-expected recovery in China
▼ + stars: | 2023-05-11 | by ( Michelle Toh | ) edition.cnn.com time to read: +6 min

Starbucks (SBUX) and Qualcomm (QCOM) have also flagged uncertainties related to the country, which is a top market for both. Beijing abandoned its zero-Covid policy in December and scrapped longstanding quarantine requirements for international arrivals in January, ending restrictions that had isolated its economy. The welcomed, if abrupt, policy U-turn led to hopes that China could help propel global growth as it had before the pandemic. The idea was that as soon as the zero-Covid policy would be over, the Chinese households and consumers would just go berserk. Starbucks warned last Tuesday that sales growth in China was starting to cool — and likely would continue that trajectory over the next six months.

There are "more questions than answers" surrounding Skyworks Solutions , BMO Capital Markets said in its downgrade of the company. "Semi stocks typically do not do well with [general margins] headwinds, especially when they are longer in duration," he added. The analyst noted that Skyworks has not had general margins below 50% since 2015. He added that while general margins in the second fiscal quarter were in line, outlook for the next two quarters is flat. Furthermore, Skyworks' recovery in China has been slower than anticipated, leading to underutilization of its factory network, according to Srivastava.

☆ Under Armour sends potential warning sign about retailers' profits
▼ + stars: | 2023-05-09 | by ( Melissa Repko | In Melissa-Repko | ) www.cnbc.com time to read: +4 min

The company drove higher sales, in part, by offering lower prices. The company's Chief Financial Officer David Bergman chalked up the margin decline to higher promotions as Under Armour marked down merchandise from prior seasons and sold it through off-price retail. The company said it expects margins will still be under pressure as higher promotions outweigh lower freight costs. Simeon Siegel, a retail analyst for BMO Capital Markets, said the pandemic gave retailers a chance to press the reset button. As of the end of the quarter, Under Armour had nearly $1.2 billion in inventory, up 44% year over year.

☆ BMO's Simeon Siegel on upgrading Peloton to market perform
▼ + stars: | 2023-05-08 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBMO's Simeon Siegel on upgrading Peloton to market performSimeon Siegel, BMO Capital Markets, joins 'Power Lunch' to discuss BMO upgrading Peloton to market perform from underperform.

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