We are now more than halfway through earnings season, with last week’s action dominated by big tech: Amazon shares were marked up by 3.7% after the company posted revenues and earnings that easily exceeded market expectations; Apple shareholders enjoyed the fruits of their ownership with the stock jumping over 10% after their beat on both the top and bottom lines; Facebook’s report was liked by the stock market, with shares rising over 8% after their earnings per share and revenues were both ahead of estimates as well. Breaking the pattern was Alphabet, whose shares declined by about 3%, even though they surpassed expectations as well, but posted their first ever quarterly revenue decline in company history.
Away from technology: Procter & Gamble rose over 2% with the companies clean report, shares of United Parcel Service gained over 14% after the company delivered a beat on earnings and revenues; Sherwin-Williams stock closed higher after their earnings report painted a positive picture by beating on earnings and raising guidance (one of the few companies to do so), and McDonalds shares cooled off a bit after the company missed expectations and announced restaurant closures.
Looking at the aggregate numbers so far – with 63% of the companies in the Standard & Poor’s 500 Index having already reported results for the second quarter of 2020 – 84% have reported Earnings Per Share above estimates and 69% have reported sales above estimates, both of which are above the five-year averages, according to data from FactSet. During the week ahead, 129 S&P 500 companies are scheduled to report results.
Notable companies reporting include Clorox, Global Payments, Walt Disney, Tyson Foods, CVS Health, Booking Holdings, Bristol-Myers Squibb, Western Digital, Motorola Solutions, and Toyota Motor. Onto macroeconomic data, the Department of Labor is due out with the July Jobs Report on Friday, where consensus estimates are for nonfarm payrolls to increase by about 2 million and for the unemployment rate to come in at 10.5%. Other news we’ll be tracking includes developments with the next fiscal stimulus package, the path of the coronavirus pandemic, and tensions with China – so we are expecting another very eventful week!
As always, don’t hesitate to call us if you have any questions, if you need anything, or would like to set up a meeting. Also, remember to notify us if any of your goals/objectives/risk tolerance or cash flow has changed. Portfolio management and financial planning is a dynamic, rather than a static process!
All the best – Southport Station Financial Management, LLC