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Playing the Waiting Game; Plus MedTech, Pharma in Q3 Earnings

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Tuesday, November 6, 2018

Today has been a date long circled on many an investor’s calendar. Results from today’s tally will no doubt have a profound affect on the stock market, and perhaps even the way market participants view the overall U.S. economy going forward. However, we won’t get the final numbers until after today’s opening bell, so until then we’re just playing the waiting game.

That’s right, I’m talking about… the government jobs opening report, or JOLTS, for the month of September. (What?) Last month showed a record number of job openings for the last full month of summer, so in some ways we’re looking in the rear-view mirror. And a record number of job openings — 7.1 million for August, pending a possible revision an hour or so from now — can be a double-edged sword: on one hand, it speaks loudly to our historically robust labor market; on the other, it demonstrates employers are increasingly finding difficulty filling positions at particular earnings points with particular skill-sets.

Of course, Election Day is today — the most anticipated Midterms in recent memory. Dozens of races both to fill congressional seats and state capitols are currently too close to call, and both Republican and Democratic parties have grown further apart since President Trump shocked the world with his upset win two years ago.

But following Midterm Elections, since World War 2 (according to MarketWatch) the market has gone up every single time. Democrats have won majorities, Republicans have won them, but each time the market traded up as a result. So what does that tell you? The market hates uncertainty; once we find out who will be leading the government for the next two years, it will be easier to see where to invest one’s money.

We’re big on Pharma, MedTech and like-minded stocks this morning as Q3 earnings season rages on. CVS Health Corp. (CVS - Free Report) topped expectations by 2 cents to $1.73 per share on revenues that marginally beat expectations to $47.27 billion in the quarter. Shares are up 2.5% following the report in today’s pre-market. This company also plans to purchase health insurer Aetna. For more on CVS’ earnings, click here.

Zacks Rank #2 (Buy)-rated Eli Lilly (LLY - Free Report) also surpassed expectations by 2 cents per share to $1.39, though quarterly sales missed the Zacks consensus by 0.7% to $6.06 billion. Following a strong +30% year to date for Lilly stock, shares are slightly down in today’s pre-market. For more on LLY’s earnings, click here.

Biotech major Regeneron (REGN - Free Report) blew away estimates on the bottom line — $5.87 per share versus $5.21 expected and $3.99 in the year-ago quarter — while narrowly topping on sales to $1.66 billion. Share are up in today’s pre-market, albeit slightly, following a 5.6% upswing year to date. For more on REGN’s earnings, click here.

Perhaps strongest of all this morning came from Zacks Rank #2-rated Mallinckrodt (MNK - Free Report) , a player in the generics drug market, which posted $2.10 per share for a beat of 30 cents over the Zacks consensus. Sales of $640 million in the quarter beat slightly and was down year over year. However, this company which has traded up 20% from early January is up another 6.8% in today’s pre-market activity. For more on MNK’s earnings, click here.

Mark Vickery
Senior Editor

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