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Pre-market futures are currently in the green at this hour, but not convincingly so — at least for those major indexes not named the Russell 2000, which is up +2.5% over the past five trading days. The Dow, S&P 500 and Nasdaq are still digging out from early-week selloffs.
The Dow is -3 points at this hour, the S&P 500 is +10 points and the Nasdaq is closest to rebounding for the week, +129 points. Year to date, the small-cap Russell 2000 is surging ahead of the other indexes, +7.7%. The Dow is +2.7%, the Nasdaq +1.47% and the S&P 500 +1.43%. We’ll be down for a second-straight week of trading if we don’t see a turnaround sometime today.
Q4 Earnings Ahead of Friday’s Open
We round up a certain level of finance-based companies reporting Q4 earnings today. The big banks reporting early — the JPMorgans (JPM) and Goldman Sachses (GS) of the world — get most of the press, but banking in aggregate does not get a full review until a plurality of smaller investment houses.
The best performance on the bottom line from this group this morning is PNC Financial PNC, which beat earnings expectations by +15.4%. The Zacks Rank #2 (Buy)-rated Pittsburgh-based bank had been up nearly +5% on the news this morning, but is currently +3.2%.
MTB BankMTB posted earnings of $4.72 per share versus estimates of $4.44, for a +6.3% positive surprise. Higher-than-expected non-interest income was cited in the bank’s letter to shareholders, and MTB stock is up marginally ahead of the open.
Boston-based State Street Corp.STT reported Q4 earnings of $2.97 per share, above the $2.82 in the Zacks consensus. This equates to a +5.3% surprise, though shares are down -2% thus far in today’s pre-market. Yesterday, State Street unveiled a new digital financial infrastructure prior to reporting earnings figures.
Regions Financial RF missed expectations on both top and bottom lines this morning. Earnings of 57 cents per share was beneath the 61 cents expected, and revenues of $1.92 billion was slightly below the Zacks consensus of $1.93 billion. Shares are down -4% at this hour in pre-market trading.
Economic Reports After the Opening Bell
Officially out 15 minutes ahead of the market open are December numbers for Industrial Production and Capacity Utilization. Both are expected to bring muted results, with Industrial Production estimated up +0.1% from +0.2% reported for November, with Capacity Utilization remaining at a lukewarm +76.0%, where it was reported a month ago.
Also a new Homebuilder Confidence Index is anticipated for January once the normal trading session is underway. This is expected to tick up to 40 from 39 the previous month, and would be the fourth-straight increase on this metric, though still well off the 47 reported in January of last year. None of these numbers have achieved the 50 threshold, which determines growth from loss.
What to Expect from the Market Next Week
Q4 earnings season branches out from the finance firms next week, with companies as disparate as NetflixNFLX and Intel INTC are due out with earnings reports. Over the past year, Netflix is the weakest performing of these, up just +4.5% in the past year. Intel, on the other hand, is up +145% over that period. Both stocks currently have a Zacks Rank #3 (Hold).
Other notable companies reporting earnings next week include GE AerospaceGE, which is currently rated a Zacks Rank #2 (Buy), and Johnson & JohnsonJNJ, a Zacks Rank #3. Over the past year of trading, GE is up a robust +78% and J&J is +48%, not too shabby either.
The big economic report next week is the November catch-up filing from Personal Consumption Expenditures (PCE), the Fed’s preferred metric on inflation. As we’ve seen in other government-generated economic reports, we’ll be kipping over October numbers next week. The latest print we have is the +2.8% from September — a half-point above where we were in April of last year: +2.3%. That is an average of +10 basis points each month from that point, which, if it continues, would bring us to +3.0% for November.
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KLA is a major player in each of its served markets. The company offers complete yield management solutions, including hardware, software and services that reduce production cost.
AI-driven semiconductor innovation, advanced packaging and market share gains in foundry logic to fuel growth. Strong balance sheet, expanding customer base and focus on cutting-edge semiconductor technologies are other positives.
Dominant position in the core material processing market, vertically integrated business model, industry-leading operating margins and expansion in TAM are key positives.
Strong cash flows in the storage and records management business and a focus on the data center business are positives for Iron Mountain. Strategic acquisitions supplement organic growth.
Barclays’ cost-mitigating efforts are expected to continue supporting bottom-line growth. Additionally, its restructuring and business-simplifying initiatives are anticipated to boost financials.
Albemarle remains focused on expanding capacity to capitalize on the strong growth in the battery-grade lithium market. It should also gain from cost and productivity actions.
The company is the largest player of the nation’s shipbuilding industry. Its impressive backlog count and solid U.S. budget outlook are added positives.
CF Industries is well-placed to benefit from higher nitrogen demand in major markets. It should also gain from higher nitrogen prices. The company is also committed to cutting debt and boosting shareholder value.
Government budget constraints, contract delays, margin volatility, high customer concentration, procurement delays and rising labor costs remain possible headwinds for the company.
Netflix’s accelerating ad business, AI-driven innovation, record engagement on content strength, focus on originals across various genres and languages are key positives.
Strength in the Energy Generation/Storage business, balance sheet strength, and focus on autonomous driving and artificial intelligence are set to drive Tesla.
Central Garden & Pet advances digital, supply chain and product innovation while driving margin gains and M&A, backed by strong financials and a focused Cost and Simplicity program.
AbbVie’s Skyrizi and Rinvoq, are performing extremely well, bolstered by approval in new indications, which should support top-line growth in the next few years.
Intel’s leading position in PC market, strength in servers, growing clout in software, IoT & ADAS domains and headway in process technology are positive indicators of future growth prospects.
