Looking at some highlights from earnings season so far and stocks that moved after their reports: Harley-Davidson and Tesla shares both drove higher after the companies posted better-than-expected earnings; Procter & Gamble shares were looking good after an earnings and revenues beat, in part due to increased sales from their beauty segment; Sherwin-Williams painted a pretty picture with their earnings beat; McDonald’s shares cooled after earnings missed expectations; Twitter shares flew lower after missing on both the top and bottom lines; Hasbro shareholders were not in a playful mood after the play and entertainment company missed consensus earnings estimates on both earnings per share and revenues.
Away from some of the individual earnings reports that grabbed headlines, and looking at the total results so far – with 40% of the companies in the Standard & Poor’s 500 Index having already reported actual results for the third quarter of 2019, 80% of the companies in the S&P 500 have reported a positive EPS (earnings per share) surprise – which is above the 5-year average of 72%, according to data from FactSet.
Looking to the week ahead we’ll get another large batch of earnings reports. Companies scheduled to report this week include Alphabet, Merck, Pfizer, Mastercard, General Motors, Facebook, Apple, Starbucks, Bristol-Myers Squibb, Kraft Heinz, Colgate-Palmolive, Chevron, and ExxonMobil. Away from earnings, the Federal Open Market Committee reports its monetary-decision Wednesday afternoon. According to the CME FedWatch Tool, there is a 94% probability the Fed will cut interest rates by ¼ point. With positive earnings surprises so far, along with expectations for a rate cut, and throw in reported progress on trade issues with China – the Standard & Poor’s 500 Index is trading at a record high this morning – enjoy the day!
All the best – Southport Station Financial Management, LLC