Tuesday, April 23, 2024
As the first quarter earnings season approaches, the outlook for the market looks brighter. First, there have been no reports of tragic, egregious mistakes by companies yet. In fact, I’ve been pleasantly surprised by the results for big Wall Street banks, big manufacturers, and others. Companies in the technology industry are just starting to release their calendar first-quarter reports, and even there “so far, so good.” At this hour, the Dow is +110 points, the S&P 500 is +20, and the Nasdaq is +75 points. This follows a generally steady day in the green.
Economic printed materials are slowly arriving this week. S&P preliminary PMI results for both services and manufacturing for April will be released after trading opens today. Both estimates now stand at 52.0, up slightly from 51.7 for services and 51.9 for manufacturing a month ago. And importantly, these numbers still do not exceed the 50 threshold, which is the dividing point between profit and loss. Elsewhere, you can find new home sales for March. It is expected to be 669,000, up from 662,000 in the previous month.
This week’s important economic report will be released on Friday. This will be his personal consumption expenditures (PCE) report for March, which is expected to be in line with the previous month, with a slight increase year-over-year and a slight decrease on core year-over-year. When the Fed says it’s not satisfied that its inflation measures are being properly derived from the economy at this point, it’s PCE that it’s most clearly referring to. Fed Chairman Jerome Powell himself did not mention PCE data by name during the question-and-answer period after the Fed meeting.
Prior to today’s opening, general motors (GM – Free report) announced the first quarter results. The “Big 3” automaker posted a 26% increase in earnings compared to expected earnings of $2.08 (versus $2.21 a year ago), with earnings per share of $2.62 and a top profit of +4.2% to 430. $100 million (significantly higher than $39.99 billion a year ago). Additionally, manufacturers including Chevrolet, Cadillac and Buick raised their forward guidance, citing mixed outlooks for their EV products. Since this release, the stock has increased +4%, adding +20% year-to-date. For more information on GM’s earnings, click here.
Major delivery/logistics company united parcel service (UPS – (Free Report) announced mixed results for the first quarter this morning. The company has a solid estimate of earnings of $1.43 per share, which falls just short of the top line at the Zacks Consensus Estimate of $21.91 billion. The company laid off 12,000 employees during the quarter due to weak results. Competitor FedEx reported similar results in its latest earnings report. UPS, which has had just one missed report in the past five years, has seen its stock decline by -1.2%, adding to its -8% year-to-date.
pepsico (pep – (Free Report), another survey on consumer appetite recorded strength on both the top and bottom lines before today’s opening bell. Earnings per share were $1.61, 5.9% above expectations of $1.52 (and his $1.50 per share reported a year ago). Meanwhile, revenue came in at $18.25 billion, slightly beating the Zacks Consensus by +0.62%. Over the past four quarters, profits have exceeded sales for the fourth consecutive quarter, and for the third time. The stock is down -0.3% today even though its China business is improving. Click here to learn more about PEP earnings.
spotify (spot – (Free Report) this morning exceeded expectations on both sales and bottom line. Earnings of $1.05 per ADR (Spotify is headquartered in Stockholm, Sweden) easily beat expectations of 63 cents and finally turned profitable after years of negative profits. This represents a positive surprise of +66.67% on sales of $3.95 billion, +2.05% from the Zacks Consensus and notable from his reported $3.26 billion a year ago. improved. The stock is up another +7% pre-market, +45% year-to-date, and +107% over the past year. Click here to learn more about SPOT’s earnings.
After closing today, tesla (TSLA – Free Report) will be released along with first quarter earnings. As market participants brace for one of the worst quarters from an EV leader in recent memory, the stock continues to maintain a Zacks Rank #5 (Strong Sell) and Value Growth Momentum Score of F. visa (V – free report) and texas instruments (texas – Free Report) on earnings after the bell rings this afternoon.
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