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Pre-markets are roaring ahead this morning, building on the rally from Monday’s trading day. Actually, this rally goes back to Thursday of last week; much was given back last Friday, but higher highs were gained as of Monday’s close. And with the Dow +640 points at this hour, the Nasdaq +280 and the S&P 500 +85 points, it’s safe to say we’re in the midst of a rally.
Market participants are doing the math on investment rate hikes, and although the Fed will continue to tighten in the November and likely the December meetings, many people feel the end — the Fed’s pause, not necessarily pivot — is not far away. In fact, after the markets appeared to digest another 75 basis-point (bps) hike is already in the soup for November 2nd, it brightened their outlook to see little reason to keep hiking at such historically drastic levels beyond. And the stock market, as we know, is a forward economic indicator.
Johnson & Johnson (JNJ - Free Report) posted beats on both top and bottom lines in its Q3 report this morning: earnings of $2.55 per share on revenues of $23.79 billion outpaced the expected $2.49 and $23.28 billion, respectively. Its Pharma business grew +2.6% to $13.21 billion in the quarter, led by cancer drug Darzalex, which posted nearly +30% gains. J&J keeps its multi-year streak of not posting a negative earnings surprise intact.
Goldman Sachs (GS - Free Report) also topped expectations this morning on its Q3 results, with $8.25 per share beating earnings expectations of $7.47 (though still well off the $14.93 per share from the year-ago quarter), on $11.98 billion in revenues, above the $11.26 billion Zacks consensus. Fixed Income zoomed up +41%, offset by -57% in Investment Banking for the quarter. Shares are up +2.7% on the news.
After the market opens, we’ll get a new National Association of Home Builder (NAHB) index for October, which is expected to decline for the 10th straight month. In fact, the 44 projected for today’s print is nearly half where this survey was in December of last year. This plays into the positive outlook for the market in that “bad news is good news” way: a lower home builders’ index indicates lessened demand, and with lessened demand we likely get continued slack on home prices.
The news this morning, however, is the pleasant surprise Q3 earnings season has given us so far, especially compared to the foreboding feeling investors had going into it. However, we may be picking the low-hanging fruit here; big banks and multinational drug retailers are benefiting from higher price points where the consumer cannot easily avoid them. Let’s see what happens in the coming weeks when the semiconductors start reporting — if things are still swell then, we might have even more reason to celebrate come the holidays. Questions or comments about this article and/or its author? Click here>>
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Pre-Markets Rally on Q3 Beats from J&J, Goldman
Tuesday, October 18, 2022
Pre-markets are roaring ahead this morning, building on the rally from Monday’s trading day. Actually, this rally goes back to Thursday of last week; much was given back last Friday, but higher highs were gained as of Monday’s close. And with the Dow +640 points at this hour, the Nasdaq +280 and the S&P 500 +85 points, it’s safe to say we’re in the midst of a rally.
Market participants are doing the math on investment rate hikes, and although the Fed will continue to tighten in the November and likely the December meetings, many people feel the end — the Fed’s pause, not necessarily pivot — is not far away. In fact, after the markets appeared to digest another 75 basis-point (bps) hike is already in the soup for November 2nd, it brightened their outlook to see little reason to keep hiking at such historically drastic levels beyond. And the stock market, as we know, is a forward economic indicator.
Johnson & Johnson (JNJ - Free Report) posted beats on both top and bottom lines in its Q3 report this morning: earnings of $2.55 per share on revenues of $23.79 billion outpaced the expected $2.49 and $23.28 billion, respectively. Its Pharma business grew +2.6% to $13.21 billion in the quarter, led by cancer drug Darzalex, which posted nearly +30% gains. J&J keeps its multi-year streak of not posting a negative earnings surprise intact.
Goldman Sachs (GS - Free Report) also topped expectations this morning on its Q3 results, with $8.25 per share beating earnings expectations of $7.47 (though still well off the $14.93 per share from the year-ago quarter), on $11.98 billion in revenues, above the $11.26 billion Zacks consensus. Fixed Income zoomed up +41%, offset by -57% in Investment Banking for the quarter. Shares are up +2.7% on the news.
After the market opens, we’ll get a new National Association of Home Builder (NAHB) index for October, which is expected to decline for the 10th straight month. In fact, the 44 projected for today’s print is nearly half where this survey was in December of last year. This plays into the positive outlook for the market in that “bad news is good news” way: a lower home builders’ index indicates lessened demand, and with lessened demand we likely get continued slack on home prices.
The news this morning, however, is the pleasant surprise Q3 earnings season has given us so far, especially compared to the foreboding feeling investors had going into it. However, we may be picking the low-hanging fruit here; big banks and multinational drug retailers are benefiting from higher price points where the consumer cannot easily avoid them. Let’s see what happens in the coming weeks when the semiconductors start reporting — if things are still swell then, we might have even more reason to celebrate come the holidays.
Questions or comments about this article and/or its author? Click here>>