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AcelRx Pharmaceuticals (ACRX) Upgraded to Buy: Here’s Why

AcelRx Pharmaceuticals (ACRX) Upgraded to Buy: Here’s Why

AcelRx Pharmaceuticals (ACRX) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates — one of the most powerful forces impacting stock prices.

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The Zacks rating relies solely on a company’s changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure — the Zacks Consensus Estimate.

The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.

Therefore, the Zacks rating upgrade for AcelRx Pharmaceuticals basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock Prices

The change in a company’s future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That’s partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

For AcelRx Pharmaceuticals, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company’s underlying business. And investors’ appreciation of this improving business trend should push the stock higher.

Harnessing

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Here’s what happened to the stock market on Monday

Here’s what happened to the stock market on Monday



a close up of a statue: Charging Bull Statue is seen at the Financial District in New York City, United States on March 29, 2020.


© Provided by CNBC
Charging Bull Statue is seen at the Financial District in New York City, United States on March 29, 2020.

Dow Jones Industrial Average surges 250 points

The Dow rallied 250.62 points, or 0.9%, to close at 28,837.52. The S&P 500 jumped 1.6% to 3,534.22. The Nasdaq Composite advanced 2.6% to 11,876.26 for its best day since September. Tech shares rallied on Monday to lead the broader market higher.

Apple pops ahead of iPhone launch

Apple jumped 6.4% as investors looked ahead to a key event for the company. On Tuesday, Apple is expected to unveil its first 5G iPhone. History shows Apple shares usually outperform the broader market after an iPhone launch. Facebook and Amazon advanced 4% each.

Video: Jim Cramer says the stock market does not reflect Americans’ need for more coronavirus stimulus (CNBC)

Jim Cramer says the stock market does not reflect Americans’ need for more coronavirus stimulus

UP NEXT

UP NEXT

Stimulus talks continue

Monday’s rally came even as chances for another round of stimulus before the election appeared to dim over the weekend. Both House Speaker Nancy Pelosi, D-Calif., and Senate Republicans pushed back on a $1.8 trillion offer from the White House. Despite the impasse, Morgan Stanley’s Mike Wilson thinks “there’s enough stimulus in the pipeline for now to kind of get us through year-end.”

What happens next?

The corporate earnings season is set to kick off on Tuesday as JPMorgan Chase, Citigroup and Delta Airlines release their latest quarterly results.

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Here’s what 710 years’ worth of Italian bond market data is showing about central banks ‘crushing rates’

Here’s what 710 years’ worth of Italian bond market data is showing about central banks ‘crushing rates’

The yield on Italian 10-year
TMBMKIT-10Y,
0.680%

and 30-year
TMBMKIT-30Y,
1.529%

debt fell to record lows on Monday.

As this chart from Deutsche Bank shows, the yield on the Italian 10-year is lower than it was even before Italy became a country. Deutsche Bank strategist Jim Reid attached proxies for Italian debt, such as from Naples, to chart pre-1861 data. (There is also a gap in the data series for the 1700s.)

He also charted debt-to-gross-domestic-product, which shows the Italian economy with an all-time low capability to service that debt.

The move on Monday came after the European Central Bank’s chief economist gave an interview suggesting the central bank may take further action. Among the ECB’s actions stimulus so far is the purchase of government debt from countries including Italy, through what’s called the pandemic emergency purchase program.

“Has the ECB permanently suppressed yields and spreads or are there many more twists and turns to this story over the years ahead? I would lean towards the latter but for now Italian politics and their control of the second wave are acting as strengths and not weaknesses,” Reid said.

David Stockman, the former Reagan-era budget director and acerbic critic, looked at the same chart and issued this brief but withering analysis: “when central banks crush rates, politicians bury their governments in debts.”

The current explosion in debt-to-GDP has been because the latter dropped, precipitously. The Italian economy shrank by 18% year-over-year in the second quarter.

Italy also has been issuing more debt. According to Italian bank Intesa Sanpaolo, Italy is forecast to issue a net €177 billion in new debt in 2020, compared with €54 billion in 2019.

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Here’s why the market narrative on a November blue wave flipped in just 2 weeks, and what it now means for stocks, according to UBS

Here’s why the market narrative on a November blue wave flipped in just 2 weeks, and what it now means for stocks, according to UBS

joe biden
  • The market narrative on what a potential November blue wave could mean for stocks has flipped over the past two weeks, UBS said in a note on Monday.
  • The prevailing market narrative over the past few months that a blue wave election outcome would hurt stocks due to higher taxes is now dead, according to UBS.
  • Instead, expect stocks to move higher if there is a blue wave this November, and don’t be surprised for the potential of investors being disappointed if a blue wave doesn’t happen, UBS said.
  • Visit Business Insider’s homepage for more stories.

Throughout 2020, the consensus view has been that a Joe Biden victory, and a potential “blue wave” in November, would be bad for the stock market because of the potential for higher corporate taxes and more regulation.

But that market narrative has been flipped on its head in the past two weeks, UBS said in a note on Monday.

Now, investors expect a Biden victory and Democratic sweep of Congress this November to serve as a the catalyst for a reflation trade, in which cyclical and value stocks trade higher, and the US dollar weakens, further helping US stock prices.

The impetus for a change of heart among investors regarding a blue wave and its impact on stocks is three-fold, according to UBS:

1. “The inability to pass a major fiscal package prior to the election means that it’s increasingly likely to be the Democrats’ top priority after a Blue Wave outcome,” UBS said.

2. Higher taxes will be a 2022 problem for investors, not a 2021 problem, according to UBS.

3. “Biden’s widening lead in the polls and prediction markets, and along with it the likelihood of a Blue Wave, is reducing election uncertainty,” UBS said, adding that a delayed or

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Here’s why risk-taking has worked well for Star Health Insurance

Here’s why risk-taking has worked well for Star Health Insurance



a man wearing glasses and a suit and tie: Here’s why risk-taking has worked well for Star Health Insurance


© M Saraswathy
Here’s why risk-taking has worked well for Star Health Insurance

The Covid-19 outbreak and subsequent lockdown led to many general insurers’ business stagnating. Core segments such as motor insurance have been pushed into the background as vehicle sales plummeted.

Amidst this pandemic, however, there is one general insurer that has not only seen a substantial improvement in its market share in 2020 compared to the previous year, but has also set ambitious targets for FY21.

Star Health Insurance, the country’s largest standalone health insurer (with 52 percent market share), is now the country’s fourth-largest private insurer in the non-life space. It had a market share of 4.36 percent as of August 2020.

A year ago, it was the sixth-largest insurer but the Covid pandemic and the resultant scramble to purchase health insurance has pushed it up two slots since then. Anand Roy, Managing Director of Star Health Insurance, told Moneycontrol in an interview that the company is targeting a premium of Rs 10,000 crore by the end of FY21.

The insurer is targeting 6 percent market share by the close of this fiscal year, added Roy. In the total business, 10 percent will be group business while the rest would be retail.

That is 46 percent YoY growth in premium collection. The non-life industry, as a whole, has seen only 4 percent growth in premium collection so far. Standalone health insurers have seen 26 percent YoY growth (as of August 2020).

So far, Star Health has 30 percent market share in retail health and is bigger than even the state-owned general insurers.

“Awareness about health insurance rose after the Covid-19 outbreak. Younger people are keener to buy health insurance now. The standard Covid-19 product has also been popular. Our growth is a combination of all these factors,”

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