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Stock Markets Taper on High Valuations, Upcoming Election
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Tuesday, October 22nd, 2024
Following a week or two of seemingly higher and higher all-time closing highs, we see something of a pullback in stock market activity in the first two trading days of this week. There aren’t any concrete reasons behind this — no economic data or dire Q3 reports impacting market sentiment — but more a cautious foreboding of what may be to come.
The possible explanations for this are manifold. High market valuations naturally bring about caution, and in two weeks we potentially could see a number of prominent news items which could change the trajectory of stock market enthusiasm: the next Fed meeting, parsing the previous Friday’s Employment Report, and, of course, the General Election on November 5th.
Thus, market participants appear reluctant to jump into equities with both feet this morning. We also see gold — still the universal hedge against present market realities — at historic highs. Patience will serve investors in the near term. Luckily for us, we have plenty of Q3 results to sift through.
Q3 Earnings Roundup: GE, GM, LMT and More
GE Aerospace (GE - Free Report) , the honed-down version of the major conglomerate developed in the 19th century by Thomas Edison and his business partners, reported Q3 results far ahead of expectations on both top and bottom lines. Earnings of $1.56 per share was far ahead of the $1.13 expected, and nearly double the 82 cents per share reported in the year-ago quarter.
Revenues came in at $9.84 billion, again a long stride beyond the $8.97 billion in the Zacks consensus estimate. Strength in its Aerospace business — which CEO Larry Culp credits to strong demand for airplane engines in the quarter — was the chief growth aspect in the quarter, and full-year earnings guidance is up as a result. Yet shares are down -5% on the news, shearing down the +40% gains GE has made since separating its energy business in April.
General Motors (GM - Free Report) also posted double-digit positive surprises on both top and bottom lines for its Q3 this morning. Earnings of $2.96 per share beat expectations by a Kennedy half-dollar (ask your parents) for a +18.9% outperformance in the quarter. Revenues of $48.76 billion surpassed estimates by +10.85%. Shares are flat on the news, but +36% year to date. For more on GM’s earnings, click here.
Verizon (VZ - Free Report) posted mixed results in its Q3 report this morning, beating on earnings by a penny to $1.19 per share, on $33.33 billion in revenues which missed the Zacks consensus by -0.60% (and down a tad from the year-ago quarter). Pre-market activity is selling VZ stock at this hour, -3.5%. Shares had been up nearly +16% year to date. For more on VZ’s earnings, click here.
Washington, DC-based industrial conglomerate Danaher Corp. (DHR - Free Report) posted strong beats on both top and bottom lines this morning. The stock had come into its Q3 earnings report with a Zacks Rank #4 (Sell), but a +9.6% positive earnings surprise to $1.71 per share and +3.65% surprise on the top line to $5.8 billion in revenues may change analysts’ outlooks. Shares are down -2% in early trading, but up +15% year to date. For more on DHR’s earnings, click here.
Pulte Home (PHM - Free Report) also topped expectations on both earnings and sales in its Q3 this morning. Earnings of $3.35 per share outpaced estimates by +8% for the quarter, with $4.48 billion in revenues surpassing projections by +5%. The Atlanta-based homebuilder is seeing its shares sell off -4% on a narrow gross margin in the quarter. For more on PHM’s earnings, click here.
Image: Bigstock
Stock Markets Taper on High Valuations, Upcoming Election
Tuesday, October 22nd, 2024
Following a week or two of seemingly higher and higher all-time closing highs, we see something of a pullback in stock market activity in the first two trading days of this week. There aren’t any concrete reasons behind this — no economic data or dire Q3 reports impacting market sentiment — but more a cautious foreboding of what may be to come.
The possible explanations for this are manifold. High market valuations naturally bring about caution, and in two weeks we potentially could see a number of prominent news items which could change the trajectory of stock market enthusiasm: the next Fed meeting, parsing the previous Friday’s Employment Report, and, of course, the General Election on November 5th.
Thus, market participants appear reluctant to jump into equities with both feet this morning. We also see gold — still the universal hedge against present market realities — at historic highs. Patience will serve investors in the near term. Luckily for us, we have plenty of Q3 results to sift through.
Q3 Earnings Roundup: GE, GM, LMT and More
GE Aerospace (GE - Free Report) , the honed-down version of the major conglomerate developed in the 19th century by Thomas Edison and his business partners, reported Q3 results far ahead of expectations on both top and bottom lines. Earnings of $1.56 per share was far ahead of the $1.13 expected, and nearly double the 82 cents per share reported in the year-ago quarter.
Revenues came in at $9.84 billion, again a long stride beyond the $8.97 billion in the Zacks consensus estimate. Strength in its Aerospace business — which CEO Larry Culp credits to strong demand for airplane engines in the quarter — was the chief growth aspect in the quarter, and full-year earnings guidance is up as a result. Yet shares are down -5% on the news, shearing down the +40% gains GE has made since separating its energy business in April.
Check out the updated Zacks Earnings Calendar here.
General Motors (GM - Free Report) also posted double-digit positive surprises on both top and bottom lines for its Q3 this morning. Earnings of $2.96 per share beat expectations by a Kennedy half-dollar (ask your parents) for a +18.9% outperformance in the quarter. Revenues of $48.76 billion surpassed estimates by +10.85%. Shares are flat on the news, but +36% year to date. For more on GM’s earnings, click here.
Verizon (VZ - Free Report) posted mixed results in its Q3 report this morning, beating on earnings by a penny to $1.19 per share, on $33.33 billion in revenues which missed the Zacks consensus by -0.60% (and down a tad from the year-ago quarter). Pre-market activity is selling VZ stock at this hour, -3.5%. Shares had been up nearly +16% year to date. For more on VZ’s earnings, click here.
Washington, DC-based industrial conglomerate Danaher Corp. (DHR - Free Report) posted strong beats on both top and bottom lines this morning. The stock had come into its Q3 earnings report with a Zacks Rank #4 (Sell), but a +9.6% positive earnings surprise to $1.71 per share and +3.65% surprise on the top line to $5.8 billion in revenues may change analysts’ outlooks. Shares are down -2% in early trading, but up +15% year to date. For more on DHR’s earnings, click here.
Pulte Home (PHM - Free Report) also topped expectations on both earnings and sales in its Q3 this morning. Earnings of $3.35 per share outpaced estimates by +8% for the quarter, with $4.48 billion in revenues surpassing projections by +5%. The Atlanta-based homebuilder is seeing its shares sell off -4% on a narrow gross margin in the quarter. For more on PHM’s earnings, click here.
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