Jefferies says these stocks are poised to return if inflation peaks
There may be a slowdown on the horizon, and further earnings declines are expected in the future. If inflation peaks, as some analysts expect, Jefferies says, this combination of factors will favor one class of stock.
Jefferies has produced a screen of such stocks that investors can buy, based on a list of metrics that include high profitability, reasonable valuations and good cash flow. Professional subscribers can read the story here.
– Weezin Tan
PayPal soars on earnings and stock buyback announcement
PayPal shares rose more than 11% after hours. Payments company Beat analyst earnings and revenue estimates for the second quarter and issued optimistic guidance for the full year. PayPal also announced a $15 billion share buyback program.
Share buybacks provide a way for companies to increase their earnings per share and enhance the value of their shares, Especially while the market in all areas suffers from sharp drops in prices this year. The company started a $10 billion program four years ago.
Elliott Management said it has a $2 billion stake in the payments giant. PayPal announced that it has entered into an agreement to share information on value creation with the activist investor.
– Tanaya Michel
Despite Fed Talk About Fighting Inflation, ‘Easing Cycle’ Is Emerging, Says Jim Poulsen of Leuthold
Leuthold Group chief investment analyst Jim Poulsen said that despite the Fed’s “continuous rants toward fighting inflation” through monetary tightening, there are several factors that suggest the market may be entering an “emerging easing cycle”.
He said in a note to investors late Tuesday that bond yields have made a significant cut in interest rates, the dollar is finally rolling in and unwanted spreads have eased.
“The media, policy officials and investors are primarily focused on the fight against inflation and how aggressively the Fed will need to keep raising rates,” Paulsen said. “However, with real economic growth already falling to a crawl and evidence mounting that inflation is abating, the case for further Fed tightening at its September meeting is rapidly collapsing.”
“Investors should put appropriate weight on the pioneering nature of economic policies,” he added. “Tightening today means lower real and nominal growth tomorrow.”
– Tanaya Michel
MatchGroup shares falter after hours
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