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Ahead of Wall Street

Thursday, October 27, 2016

Durable Goods Orders for the month of September were released — an indicator of domestic GDP growth — with a headline read of -0.1%. Strip out the more volatile Transportation costs and that number swings to +0.2%. Ex-Defense, it’s even higher: +0.7%.

One of the main keys in this report — the read on Business Development — was down surprisingly last month at -1.2%. This exactly wipes out the August Business Development tally of +1.2%. What looks to be the takeaway at first glance is that GDP growth of roughly 3% in Q3, which analysts had been predicting rather fondly, may not be reality. In other words, slower growth than expected appears to continue, at least in terms of Durable Goods Orders from last month.

Initial Jobless Claims did continue to illustrate a strengthening U.S. labor market, posting initial claims of 258K, 3000 fewer than last week’s upwardly revised 261K. Remaining within the bottom end of the historically strong range of 250-275K for the past several months, whatever issues our sluggish economy is having, they are not showing up in employment data.

This is also considering we are currently in the strongest earnings season of the past six quarters. Tesla TSLA was the latest big-name company to report a big beat yesterday after the bell, and will be followed by reports from Alphabet GOOGL and Amazon AMZN after the bell today. Sandwiched in between are more Q3 reports ahead of the bell; it is (so far) the busiest day yet for Q3 earnings reports.

Struggling social media staple Twitter TWTR managed to top estimates in its Q3 earnings and revenues, narrowly edging out sales estimates for the quarter. The company also announced it will lay off roughly 9% of its global workforce in a bid to lower expenses. Shares are up 4.3% ahead of regular trading, but are still down more than 20% over the past month.

Ford Motor Company F posted earnings per share of 24 cents, more than 50% lower than the company’s record quarter a year ago. Product demand adjustments are being met, according to the company, setting the table for stronger quarters in the future. Shares are down marginally in the pre-market, but are down more than 15% year to date.

Dow Chemical DOW followed its merger partner DuPont earlier in the week in posting positive surprises on both top and bottom lines for its Q3 report. Both earnings and sales not only beat analyst expectations in the quarter, but were up notably from year-ago numbers. Shares are up 1.5% ahead of the bell.

Aetna AET beat earnings estimates by 4 cents per share on better-than-expected revenues. The company did mention it is still fighting pressures from the Affordable Care Act, but this morning’s positive surprise may put a dent in the down month for AET shares.

The Blackstone Group BX is up more than 3.5% in early trading following its positive quarterly earnings report, beating estimates by a wide margin on both top and bottom lines.

Mark Vickery
Senior Editor

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Stocks On The Move

Company Symbol Price $Change %Change
OCEAN RIG UDW INC ORIG 1.16 0.11 10.48
EVINE LIVE CL A EVLV 2.20 0.16 7.84
SUNCOKE ENERGY INC SXC 10.67 0.70 7.02

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ALLEGHANY CO.. Y View Snapshot Report


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Earnings and Economic News

Key Earnings Reports For Oct 27, 2016

Economic Event Reported
(+) Treasury notes (10 yr) - Oct 27, 2016 4:15 PM Eastern Time
(+) Federal Funds Rate - Oct 27, 2016 4:15 PM Eastern Time
(+) Treasury bills (3 mth) - Oct 27, 2016 4:15 PM Eastern Time
(+) Initial Claims - Oct 27, 2016 --
(+) Durable Orders - Oct 27, 2016 --
(+) Pending Home Sales - Oct 27, 2016 --
(+) Bloomberg Consumer Comfort Index - Oct 27, 2016 --