We’re entering a new month, and March will almost certainly bring a new interest rate hike from the US Federal Reserve. Although this has spooked investors, it could ultimately have a positive effect on the highly volatile market. History shows that stocks perform perfectly well when policymakers embark on a “tightening” cycle of monetary policy, according to MarketWatch reporter Williams Watts.
At the same time, the Russian invasion of Ukraine continues to make investors nervous. European and American stock markets are showing a strong downward trend.
With all this in mind, let’s take a look at the stock market.
Are fashion stocks still on trend?
The clothing industry has seen a lot of change in the last two years, with many physical stores closed due to lockdowns and a boom in online sales. At the same time, there’s been a backlash towards fast-fashion, including pollution from factories, exploitation of workers and lack of diversity in designs. Major retailers are now rethinking their entire production process. In short: adaptation is now key in ready-to-wear!
Three apparel companies are in the spotlight this week to share their quarterly figures:
- Abercrombie will publish its results on Tuesday March 1st. Analysts are expecting earnings per share to increase by 5.28%. In addition, Abercrombie’s revenue could rise to $1.18 billion, representing 5.24% year-over-year growth.
- Victoria’s Secret will hold a meeting with its investors on Wednesday March 2nd. The group recently made headlines by employing a model with Down’s syndrome, and by creating a new line “Love Cloud.” The new branding flips the company’s sexy image towards comfortable underwear for all body types. Bank of America analysts believe this strategy will be highly profitable, and they are confident in the company’s future if it continues down this path.
- Gap is the final name in the fashion industry to share its results on Thursday March 3rd. But the company is not in good shape. Recent reports have come in below expectations due to supply chain issues. For this quarter, analysts expect the company to post earnings of -$0.12 per share, a year-over-year decline of 142.86%.
Which Spanish company should you follow?
Do you know who is the largest rice producer and the second largest pasta producer in the world? The Spanish company Ebro Foods! You might not recognise the name, but you should know that this group is a very important player in the food industry: it owns part of Lustucru, Olivieri and Panzani.
This food industry giant will release its quarterly results on Thursday March 3rd. The group has seen profits soar during the pandemic, and despite the ‘return to normal’, revenue could show further growth.
Secondly, Ebro Foods is known for offering one of the strongest dividends on the Spanish stock market. It currently offers a 0.19 euro payout that will be effective on the first of April, giving a yield of 1.2%. So if you’re looking for dividends to boost your earnings, you might want to keep an eye on this stock. With BUX Zero, you can also invest in ETFs that feature companies with a history of high dividend payments such as the All World Dividend ETF (Vanguard) and the Europe Dividend ETF (SPDR).
Economic and results calendar
Tuesday – Austrian unemployment rate (February). Manufacturing PMI in France, Germany, the euro area and the US (February). New car registrations in France and Italy (February). Inflation rate in Germany (February). Quarterly figures for Salesforce, Target, Bayer, Beiersdorf, Zoom, Zalando, Abercrombie.
Wednesday – German unemployment rate (January). Budget balance in France (January). Austria and euro area inflation rate (February). Irish unemployment rate (February). US Federal Reserve’s Beige Book. OPEC+ meeting. Quarterly figures for Best Buy, Splunk, Veeva Systems, Victoria’s Secret.
Thursday – Services PMI in Spain, France, Germany, the United States and the euro area (February). Euro area unemployment rate (January). New car registrations in Germany (February). Quarterly figures from Broadcom, Costco, Merck, Snowflake, Thales, Gap, Ebro Foods.
The BUX Breakdown was written by Clémentine Pougnet.
All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.