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Pre-market futures are down at this hour, but much better than earlier. Last night, reports that Israel’s military had retaliated against Iran’s thwarted missile attack — an unprecedented event, by the way: never before had Iran launched an offensive on its long-time regional rival Israel — in a move many domestic news pundits are worried may foment greater aggression in the region, and opposed to the wishes of the White House. The retaliation now appears to have been narrow and contained, so this morning we don’t foresee the start of a new world war.
Thank goodness for that, of course. The pre-markets, which had seen levels of -300 points on the Dow earlier this morning, are currently down to -21 points, while the S&P 500 is -27 points and the Nasdaq — stemming the red tide a bit — is down -1.6 points. That said, the S&P 500 looks to register its worst weekly performance since the last week of October last year, when indices struck 52-week lows. We’re not back there at this point, but another bad week or two may shift that perspective.
Procter & GamblePG has released fiscal Q3 earnings ahead of today’s opening bell, posting a +7% earnings beat to $1.52 per share (from $1.42 in the Zacks consensus) but missing on the top line by -1.4% — to $20.2 billion actual from $20.48 billion anticipated. Shares are down -2% in today’s early trading, even as earnings guidance for next quarter was increased. Lower price points for retail goods may be a headwind for P&G, but a weaker economy does help the interest-rate cut outlook. For more on PG’s earnings, click here.
American ExpressAXP posted beats on both top and bottom lines in its Q1 report ahead of today’s open. Earnings of $3.33 per share easily surpassed the $2.97 in the Zacks consensus, by a margin of +12%. Revenues for the quarter reached $15.8 billion, +0.28% better than the $15.76 billion expected. Strong credit quality (especially relative to other credit card services) has helped push AmEx business past pre-Covid levels, although in-line guidance appears conservative. Shares had been trading lower, but are now breakeven. For more on AXP’s earnings, click here.
Regional bank major Fifth Third Bank FITB also reported Q1 results this morning. Earnings of 76 cents per share outperformed by a nickel from expectations, while $2.1 billion in revenues notched a +0.75% beat on the top line. This is the company’s fourth-straight earnings beat, but shares are still down at this hour. Regional banks in particular have been taking it on the chin as of late, though FITB shares are off -2% year to date, including this morning’s “sell the news” action. For more on FITB’s earnings, click here.
There are plenty of near-term headwinds in this market. The good news, however, is that valuations for stocks that had spun out into another orbit as of late March have come back to more reasonable levels in the past 2+ weeks. Q1 earnings season picks up the pace as of Monday, with a big PCE report expected a week from today. These results — and Q1 earnings are performing well thus far, overall — will give us a more defined picture on the economy and the Fed’s potential moves on interest rates.
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Focus on improving the siding business segment, strategic investments and cost-reduction across all businesses as well as enhancing its shareholders’ return bodes well.
Transition toward multi-cloud environments, rising demand for application security, acquisitions and partnerships are aiding F5’s growth. Ample liquidity and an aggressive shareholder return policy are other positives.
Tractor Supply has been witnessing strength in its Life Out Here Strategy. The company’s e-commerce business and Neighbor's Club loyalty program are impressive.
International Paper will gain from strategic initiatives and ongoing investments in boosting capacity and in acquisitions. Efforts to reduce the debt level will also boost the company’s results.
O’Reilly has been generating record revenues since 31 consecutive years on the back of growth in the auto parts market and expansion of the store base.
Agricultural market conditions remain weak. Higher raw material costs are also hurting margins in the Infrastructure segment. Elevated levels of capital expenditure are added concerns.
The rising cost of sales has been a cause of concern for Dolby over the past few quarters, primarily on account of increased product cost and higher licensing expenses.
Annaly Capital Management (NLY)Downgraded: 04/13/24
Annaly's growth momentum might be curtailed in the near term amid spread widening and interest rate volatility. Robust returns are likely to remain elusive, as risk management is prioritized.
Sun Life faces earnings pressure due to volatility in equity markets and interest rates, increased expenses weighing on margin expansion and regulatory uncertainties are concerns.
Lindsay is witnessing supply-chain constraints, most notably in electronics, which will continue to impact results. The recent decline in corn prices is also concerning.
Google has shown good execution to date. Its dominant search market share is a positive. Its expanding cloud footprint and strengthening presence in the smart home market remain noteworthy.
Netflix’s growing subscriber base, driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos are key drivers.
Kroger is making investments to enhance product freshness and quality, and expand digital capabilities. Impressively, it has been introducing new items under its ‘Our Brands’ portfolio.
