Earnings Update & Fed Ahead! – Monday Morning Market Memo – July 29, 2019

Earnings Update & Fed Ahead! – Monday Morning Market Memo – July 29, 2019

Good morning,

We are in the heart of earnings season, and some specific stock action that stood out so far includes: Alphabet posted better-than-expected earnings and announced a share repurchase program, spelling out good news for the shares, with the stock rising almost 10%; Twitter shares flew higher after the company reporting an earnings beat and an increase in monetizable daily active users; Starbucks shares got a jolt after the coffee chain raised its earnings forecast and reported U.S. same-store-sales grew by 7%; United Parcel Service delivered better-than-expected profits and the shares drove higher; Align Technology shareholders were not smiling when the stock dropped after the company warned of a slowdown in China.

Looking at the scoreboard in total: for the second quarter of 2019, with 44% of the companies in the S&P 500 reporting actual results, 77% have reported earnings above estimates (which is above the 5-year average). In the week ahead, 168 S&P 500 companies (including 7 Dow components) are scheduled to report – according to data from FactSet. Notable companies set to report include Procter & Gamble, MasterCard, Merck, Apple, General Electric, Verizon, Chevron, and ExxonMobil.

Also in the upcoming week, get ready for some Fed action. The Federal Reserve concludes its two-day policy meeting on Wednesday and announces its decision on interest rates. This is the most telegraphed and expected rate cut we can remember, with the CME FedWatch Tool assigning a 100% chance of a cut in interest rates!

All the best – Southport Station Financial Management, LLC