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Retail Sales Hotter at +0.7%; JNJ, BAC, GS All Beat in Q3
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This morning we see new Retail Sales numbers for September, and they have come in hotter than expected: headline +0.7% month over month is 50 basis points (bps) higher than expected, though down 10 bps from the upwardly revised +0.8% in August. Previous near-term highs had been +0.7% back in May, though going back to January of 2023 we saw +2.8%. So Retail Sales were warm, but not scalding hot.
Subtract big-ticket auto items and this figure slips only a tad to +0.6% — double what analysts were expecting. The revision to the previous month jumps up to +0.9%. Ex-autos & gas, we’re still high: +0.6%, much hotter than the +0.2% in the consensus estimate. The Control number, which finds its way into other monthly economic prints, was also +0.6% for September. This infers a consumer willing to spend, and the outlook for Q3 GDP is likely up somewhat on this news.
As a result, we’re also seeing bond yields creeping up again, with the 10-year climbing back toward 4.8% again and the 2-year back up over 5.1%. Aside from the competition this creates for investor dollars, pulling away from equities markets, it’s another sign that economic growth is simply more robust than most economists had been expecting. Indeed, many had thought we’d be in a recession right now; these are the same analysts who think the recession is still coming sometime next year.
Johnson & Johnson (JNJ - Free Report) outperformed expectations on both top and bottom lines in its Q3 report out before today’s opening bell: earnings of $2.66 per share easily outshone the $2.52 expected and the $2.55 per share posted in the year-ago quarter. Revenues of $21.35 billion surpassed the Zacks consensus by +1.67% in the quarter, though below the $23.79 billion from a year ago. The company also raised forward guidance, and although we saw a jump in pre-market trading on the news, J&J looks to open slightly lower this morning. For more on JNJ’s earnings, click here.
Bank of America (BAC - Free Report) continues the parade of Q3 earnings from the Big Banks, and it beat estimates on its bottom line by a solid dime, to 90 cents per share. Revenues of $25.17 billion is up +3% year over year and slightly above the estimated $25.08 billion. Credit quality, as we’ve seen at other banks, was down from previous quarters, but BofA’s capital position is stronger than it was a year ago. Shares are up slightly on the news, but still down -19% year to date. For more on BAC’s earnings, click here.
Goldman Sachs (GS - Free Report) also put up Q3 numbers this morning, with earnings of $5.47 per share posting a solid +2.8% beat from $2.32 expected — though these umbers are much lower than the $8.25 per share reported in the year-ago quarter. This is only the second positive earnings surprise in the past four quarters for the investment banking major. Revenues of $11.82 billion, on the other hand, brought forth a very nice +7.42% upward surprise. Pre-market trading is flat on the news; Goldman is -8% year to date. For more on GS’ earnings, click here.
Image: Bigstock
Retail Sales Hotter at +0.7%; JNJ, BAC, GS All Beat in Q3
This morning we see new Retail Sales numbers for September, and they have come in hotter than expected: headline +0.7% month over month is 50 basis points (bps) higher than expected, though down 10 bps from the upwardly revised +0.8% in August. Previous near-term highs had been +0.7% back in May, though going back to January of 2023 we saw +2.8%. So Retail Sales were warm, but not scalding hot.
Subtract big-ticket auto items and this figure slips only a tad to +0.6% — double what analysts were expecting. The revision to the previous month jumps up to +0.9%. Ex-autos & gas, we’re still high: +0.6%, much hotter than the +0.2% in the consensus estimate. The Control number, which finds its way into other monthly economic prints, was also +0.6% for September. This infers a consumer willing to spend, and the outlook for Q3 GDP is likely up somewhat on this news.
As a result, we’re also seeing bond yields creeping up again, with the 10-year climbing back toward 4.8% again and the 2-year back up over 5.1%. Aside from the competition this creates for investor dollars, pulling away from equities markets, it’s another sign that economic growth is simply more robust than most economists had been expecting. Indeed, many had thought we’d be in a recession right now; these are the same analysts who think the recession is still coming sometime next year.
Johnson & Johnson (JNJ - Free Report) outperformed expectations on both top and bottom lines in its Q3 report out before today’s opening bell: earnings of $2.66 per share easily outshone the $2.52 expected and the $2.55 per share posted in the year-ago quarter. Revenues of $21.35 billion surpassed the Zacks consensus by +1.67% in the quarter, though below the $23.79 billion from a year ago. The company also raised forward guidance, and although we saw a jump in pre-market trading on the news, J&J looks to open slightly lower this morning. For more on JNJ’s earnings, click here.
Bank of America (BAC - Free Report) continues the parade of Q3 earnings from the Big Banks, and it beat estimates on its bottom line by a solid dime, to 90 cents per share. Revenues of $25.17 billion is up +3% year over year and slightly above the estimated $25.08 billion. Credit quality, as we’ve seen at other banks, was down from previous quarters, but BofA’s capital position is stronger than it was a year ago. Shares are up slightly on the news, but still down -19% year to date. For more on BAC’s earnings, click here.
Goldman Sachs (GS - Free Report) also put up Q3 numbers this morning, with earnings of $5.47 per share posting a solid +2.8% beat from $2.32 expected — though these umbers are much lower than the $8.25 per share reported in the year-ago quarter. This is only the second positive earnings surprise in the past four quarters for the investment banking major. Revenues of $11.82 billion, on the other hand, brought forth a very nice +7.42% upward surprise. Pre-market trading is flat on the news; Goldman is -8% year to date. For more on GS’ earnings, click here.
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