We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
We certainly have new Q4 earnings data to pass along to our readers ahead of the bell this morning, but being Thursday we also have weekly Initial Jobless Claims. Beyond this, we also see new reads on Housing Starts and the Philly Fed survey.
A wild week-over-week swing in Initial Jobless Claims: -41K last week to a multi-decade low 220K. This follows the previous week’s spike up to 261K — both of which are outside the 225K-250K of the last 100 weeks or so. In fact, this 220K number is the lowest new claims number since Jim Croce was putting out hit songs on AM radio.
That said, consider that these types of figures are susceptible to seasonal issues such as hiring during holiday shopping season. We won’t spend too much brain wattage trying to explain this drastic drop of more than 40,000 jobless claims in one week; future revisions should help iron these numbers out. Continuing claims were up last week: from 1.876 million the previous week to 1,952 million this week.
Housing Starts posted a precipitous drop as well: -8.2% is 5 1/2 times worse than the -1.5% drop in starts analysts had been expecting, with a total of 1.192 million seasonally adjusted annualized new housing starts for the month of December. Revisions for November look to have been ratcheted down about -0.3%. Again, we might be looking a seasonality affecting these results; snowstorms in the South — as far as Florida — might have something to do with December’s big drop here.
The Philly Fed survey — an economic production read of the U.S.’s 6th largest city — also underperformed expectations, though not by nearly as much: a read of 22.2 is beneath the 25 estimate for the month of January. This is not really a disappointment, however; Philly Fed numbers are historically volatile month by month, so being in the ballpark — and comfortably in positive territory — should suffice for now.
The return rate on the 10-year bond has now crossed the 2.6% threshold, taking out the most recent top from March of last year, now going back to the highest U.S. 10-year bond yield since 2014. We will check for resistance points above this current read.
Q4 Earnings: Banking Industry
The Q4 earnings results keep pouring in from U.S. banks this week. Here are a few we are focused on:
Zacks Rank #2 (Buy)-rate Morgan Stanley (MS - Free Report) topped the Zacks consensus estimates on both top and bottom lines, with earnings of 84 cents per share beat by 7 cents, on revenues of $9.50 billion which easily outpaced the $9.2 billion expected. Underwriting fees jumped 42% in the quarter, somewhat offset by a lower fixed income segment. For full-year 2017, earnings per share (EPS) of $3.60 beat the Zacks consensus by 2 cents. For more on MS’s earnings, click here.
KeyCorp (KEY - Free Report) , also a Zacks Rank #2 stock, just met expectations of 36 cents per share on the bottom line while surpassing estimates for quarterly revenues to $1.61 billion from the $1.58 billion anticipated. Revenues rose year over year by 2.7%. For more on KEY’s earnings, click here.
Another Zacks Rank #2 stock, BB&T , reported EPS of 84 cents, beating estimates by 4 cents per share. Revenues in Q4 of $2.91 billion topped the $2.84 billion we had been looking for, +5% year over year. For more on BBT’s earnings, click here.
Zacks Rank #3 (Hold)-rated Bank of New York - Mellon (BK - Free Report) met expectations of 91 cents per share but missed on the top line: $3.73 billion in revenues from the $3.98 billion analysts had anticipated. Though disappointing to the Street, EPS growth year over year was 18.2%. For more on BK’s earnings, click here.
Finally, M&T Bank (MTB - Free Report) , also a Zacks Rank #3, posted a nice positive surprise on its bottom line: $2.66 per share versus the Zacks consensus of $2.40. Revenues also topped expectations, coming in at $1.46 billion instead of the $1.42 billion estimate. For more on MTB’s earnings, click here.
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Image: Bigstock
Full Plate of Economic Data, Q4 Earnings
Thursday, January 18, 2018
We certainly have new Q4 earnings data to pass along to our readers ahead of the bell this morning, but being Thursday we also have weekly Initial Jobless Claims. Beyond this, we also see new reads on Housing Starts and the Philly Fed survey.
A wild week-over-week swing in Initial Jobless Claims: -41K last week to a multi-decade low 220K. This follows the previous week’s spike up to 261K — both of which are outside the 225K-250K of the last 100 weeks or so. In fact, this 220K number is the lowest new claims number since Jim Croce was putting out hit songs on AM radio.
That said, consider that these types of figures are susceptible to seasonal issues such as hiring during holiday shopping season. We won’t spend too much brain wattage trying to explain this drastic drop of more than 40,000 jobless claims in one week; future revisions should help iron these numbers out. Continuing claims were up last week: from 1.876 million the previous week to 1,952 million this week.
Housing Starts posted a precipitous drop as well: -8.2% is 5 1/2 times worse than the -1.5% drop in starts analysts had been expecting, with a total of 1.192 million seasonally adjusted annualized new housing starts for the month of December. Revisions for November look to have been ratcheted down about -0.3%. Again, we might be looking a seasonality affecting these results; snowstorms in the South — as far as Florida — might have something to do with December’s big drop here.
The Philly Fed survey — an economic production read of the U.S.’s 6th largest city — also underperformed expectations, though not by nearly as much: a read of 22.2 is beneath the 25 estimate for the month of January. This is not really a disappointment, however; Philly Fed numbers are historically volatile month by month, so being in the ballpark — and comfortably in positive territory — should suffice for now.
The return rate on the 10-year bond has now crossed the 2.6% threshold, taking out the most recent top from March of last year, now going back to the highest U.S. 10-year bond yield since 2014. We will check for resistance points above this current read.
Q4 Earnings: Banking Industry
The Q4 earnings results keep pouring in from U.S. banks this week. Here are a few we are focused on:
Zacks Rank #2 (Buy)-rate Morgan Stanley (MS - Free Report) topped the Zacks consensus estimates on both top and bottom lines, with earnings of 84 cents per share beat by 7 cents, on revenues of $9.50 billion which easily outpaced the $9.2 billion expected. Underwriting fees jumped 42% in the quarter, somewhat offset by a lower fixed income segment. For full-year 2017, earnings per share (EPS) of $3.60 beat the Zacks consensus by 2 cents. For more on MS’s earnings, click here.
KeyCorp (KEY - Free Report) , also a Zacks Rank #2 stock, just met expectations of 36 cents per share on the bottom line while surpassing estimates for quarterly revenues to $1.61 billion from the $1.58 billion anticipated. Revenues rose year over year by 2.7%. For more on KEY’s earnings, click here.
Another Zacks Rank #2 stock, BB&T , reported EPS of 84 cents, beating estimates by 4 cents per share. Revenues in Q4 of $2.91 billion topped the $2.84 billion we had been looking for, +5% year over year. For more on BBT’s earnings, click here.
Zacks Rank #3 (Hold)-rated Bank of New York - Mellon (BK - Free Report) met expectations of 91 cents per share but missed on the top line: $3.73 billion in revenues from the $3.98 billion analysts had anticipated. Though disappointing to the Street, EPS growth year over year was 18.2%. For more on BK’s earnings, click here.
Finally, M&T Bank (MTB - Free Report) , also a Zacks Rank #3, posted a nice positive surprise on its bottom line: $2.66 per share versus the Zacks consensus of $2.40. Revenues also topped expectations, coming in at $1.46 billion instead of the $1.42 billion estimate. For more on MTB’s earnings, click here.
Mark Vickery
Senior Editor
Questions or comments about this article and/or its author? Click here>>
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>