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Econ Reports, Q2 Earnings Take July Rate Cut Off the Table
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Tuesday, July 16th, 2024
We hit the ground running in this morning’s pre-market. Q2 earnings season for the next four weeks will bring us key performance numbers from all manner of publicly traded equities, while key economic data helps us interest-rate prognosticators keep tabs on the odds of a pending interest rate cut. The Dow, coming off an all-time closing high yesterday, is up another +150 points at the hour, the S&P 500 is +16 and the Nasdaq is +62 points at this hour.
If we’re hoping for a July rate cut, we can uncross our fingers now. This morning’s Retail Sales for June were much stronger than forecast, and only a downward surprise was going to put a rate cut this month (July 31st, two weeks from tomorrow) back on the table. A headline number of 0.0% last month beats the anticipated -0.4%, and the previous month’s revision to +0.3% is 20 basis points (bps) higher than the initial print in May.
Ex-auto sales, we jump 30 bps from expectations. This +0.4% headline ramps above the +0.1% revision from the prior month, which swung to a positive from the -0.1% reported a month ago. Ex-autos and gas, this number leaps to +0.8%, a half-point ahead of the upwardly revised +0.3% for May. The Control number, which gets filed up the economic report tallies like PCE (out a week from this Friday) came in at +0.9%, the highest we’ve seen since +1.2% in April of 2023.
Import Prices were also higher than expected. Another 0.0% headline beat the -0.2% analysts were looking for, and the prior month’s originally reported -0.4% has been halved to -0.2% on revision. Ex-fuel imports, we swing to +0.2% from -0.2% anticipated. Year over year, +1.6% on imports is the highest print since December 2022, with the May revision moving up 30 bps to +1.4%. Exports came in at -0.5% month over month, up from a downwardly revised -0.7% in May, with year-over-year up 20 bps to +0.7%.
Q2 earnings reports among major corporations put up solid beats. Bank of America (BAC - Free Report) beat earnings estimates by +5% to 83 cents per share, though still below the year-ago 88 cents reported. This is the seventh earnings beat in a row for the Charlotte, NC-based big bank. Revenues of $25.38 billion beat estimates by +0.76%. Shares are up +1.4% on the news this pre-market, adding to the +24.4% gained year to date. For more on BAC’s earnings, click here.
Morgan Stanley (MS - Free Report) handily outpaced estimates. Earnings of $1.82 per share in Q2 easily surpassed the $1.65 in the Zacks consensus (and $1.24 per share reported in the year-ago quarter), while revenues of $15.02 billion took out projections for $14.18 billion. Yet shares are down -3% on lower Wealth Management numbers and a decline in interest income. Morgan Stanley had been up +12% year to date, underperforming the S&P 500.
UnitedHealthcare (UNH - Free Report) also beat expectations in Q2. Earnings per share of $6.80 beat the expected $6.65 by +2.24%, while revenues of $98.86 billion narrowly outperformed estimates by +0.15%. Pre-market trading is up +2.6% at this hour, more than cutting in half the health insurance giant’s negative returns year to date. UNH had brought a Zacks Rank #4 (Sell) rating into today’s earnings report. For more on UNH’s earnings, click here.
After today’s open, we’ll get Business Inventories for May and a new Homebuilders Confidence Index for July. Both are expected to improve slightly month over month. It’s also the 10th Amazon (AMZN - Free Report) Prime Day, which is estimated to fetch +7% from the year-ago returns of $12.5 billion. Since the original Prime Day, Amazon has added a holiday shopping sale in October as of two years ago and a Big Spring Sale earlier this year.
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Econ Reports, Q2 Earnings Take July Rate Cut Off the Table
Tuesday, July 16th, 2024
We hit the ground running in this morning’s pre-market. Q2 earnings season for the next four weeks will bring us key performance numbers from all manner of publicly traded equities, while key economic data helps us interest-rate prognosticators keep tabs on the odds of a pending interest rate cut. The Dow, coming off an all-time closing high yesterday, is up another +150 points at the hour, the S&P 500 is +16 and the Nasdaq is +62 points at this hour.
If we’re hoping for a July rate cut, we can uncross our fingers now. This morning’s Retail Sales for June were much stronger than forecast, and only a downward surprise was going to put a rate cut this month (July 31st, two weeks from tomorrow) back on the table. A headline number of 0.0% last month beats the anticipated -0.4%, and the previous month’s revision to +0.3% is 20 basis points (bps) higher than the initial print in May.
Ex-auto sales, we jump 30 bps from expectations. This +0.4% headline ramps above the +0.1% revision from the prior month, which swung to a positive from the -0.1% reported a month ago. Ex-autos and gas, this number leaps to +0.8%, a half-point ahead of the upwardly revised +0.3% for May. The Control number, which gets filed up the economic report tallies like PCE (out a week from this Friday) came in at +0.9%, the highest we’ve seen since +1.2% in April of 2023.
Import Prices were also higher than expected. Another 0.0% headline beat the -0.2% analysts were looking for, and the prior month’s originally reported -0.4% has been halved to -0.2% on revision. Ex-fuel imports, we swing to +0.2% from -0.2% anticipated. Year over year, +1.6% on imports is the highest print since December 2022, with the May revision moving up 30 bps to +1.4%. Exports came in at -0.5% month over month, up from a downwardly revised -0.7% in May, with year-over-year up 20 bps to +0.7%.
Q2 earnings reports among major corporations put up solid beats. Bank of America (BAC - Free Report) beat earnings estimates by +5% to 83 cents per share, though still below the year-ago 88 cents reported. This is the seventh earnings beat in a row for the Charlotte, NC-based big bank. Revenues of $25.38 billion beat estimates by +0.76%. Shares are up +1.4% on the news this pre-market, adding to the +24.4% gained year to date. For more on BAC’s earnings, click here.
Morgan Stanley (MS - Free Report) handily outpaced estimates. Earnings of $1.82 per share in Q2 easily surpassed the $1.65 in the Zacks consensus (and $1.24 per share reported in the year-ago quarter), while revenues of $15.02 billion took out projections for $14.18 billion. Yet shares are down -3% on lower Wealth Management numbers and a decline in interest income. Morgan Stanley had been up +12% year to date, underperforming the S&P 500.
UnitedHealthcare (UNH - Free Report) also beat expectations in Q2. Earnings per share of $6.80 beat the expected $6.65 by +2.24%, while revenues of $98.86 billion narrowly outperformed estimates by +0.15%. Pre-market trading is up +2.6% at this hour, more than cutting in half the health insurance giant’s negative returns year to date. UNH had brought a Zacks Rank #4 (Sell) rating into today’s earnings report. For more on UNH’s earnings, click here.
After today’s open, we’ll get Business Inventories for May and a new Homebuilders Confidence Index for July. Both are expected to improve slightly month over month. It’s also the 10th Amazon (AMZN - Free Report) Prime Day, which is estimated to fetch +7% from the year-ago returns of $12.5 billion. Since the original Prime Day, Amazon has added a holiday shopping sale in October as of two years ago and a Big Spring Sale earlier this year.
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