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Strong Q4 2018 Earnings Results

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Following a week where Initial Jobless Claims fell to their lowest levels since the Beatles were still together, this week’s tally brings something of a jolt to it: 253K new claims were made last week, up 53K from the upwardly revised 200K the previous week, which was the lowest read since October 1969. This new headline number jumps straight over our long-term range of 200-225K, even outside the previous long-term range of 225-250K.

Perhaps the partial U.S. government shutdown affected these figures, as 800K federal workers the country over were either furloughed or forced to work without pay for 5 straight weeks. It’s tough to be sure from just these numbers, and we’ll be able to get a better picture in future weeks to see if this higher rate persists or it mellows down to its “normal” range now that the government shutdown has ended.

In any case, and including yesterday’s terrific ADP (ADP - Free Report)  private-sector payroll numbers for last month, we continue to see a U.S. labor market that is historically robust. The 4-week moving average on new jobless claims did rise by 5000 last week, but at slightly over 220K is still within a very comfortable range.

Continuing Claims also spiked — by 69K in this case — to 1.78 million. Its 4-week moving average is up 8000 from the week-ago figures, but at 1.74 million is still well situated historically.

Again, we suspect the 5-week shutdown of parts of the federal government may have been directly responsible for this spike. Let’s check the next couple weeks’ worth of data to see if these numbers subside. If they don’t, then we’ll have some questions for the labor market we haven’t had to ask in at least a couple years.

Other economic data scheduled for release today continue to be delayed as an affect of the shutdown: December Personal Income, Consumer Spending and Core Inflation are still all delayed. After the opening bell today, we look forward to Chicago PMI numbers for January, and a New Home Sales tally that had been rescheduled from last week.

Of course, tomorrow’s Employment Situation from the Bureau of Labor Statistics (BLS) is the most highly anticipated economic data of the week. January numbers follow an excellent December, where 312K new jobs were reported on an Unemployment Rate that ticked up to 3.9% on many Americans (re)-joining the workforce. Expectations are only for around 170-180K, but that’s what they were a month ago when we were gifted by the big surprise.

Q4 Earnings Roundup

Beleaguered conglomerate General Electric (GE - Free Report)  is trading up in today’s pre-market, even as earnings for its Q4 of 17 cents per share missed expectations by a penny. But signs of a turnaround appear to be coming closer, as the company beat revenue estimates by 4% to $33.28 billion in the quarter. Shares are up close to 9% in early trading, following a 20% gain year-to-date. 

Logistics and delivery giant UPS (UPS - Free Report)  also is trading up in the early market following a mixed Q4 report this morning, beating the Zacks consensus by 3 cents to $1.94 per share on revenues that only slightly missed expectations to come in at $19.85 billion in the quarter. The stock is up 3.75% in the pre-market at this hour. 

And Mastercard (MA - Free Report)  shares are up more than 4% so far this morning following its beat on both top and bottom lines in its Q4 report: $1.55 per share was up 2 cents from our consensus, while $3.81 billion in revenues rose 0.4% from expectations. Mastercard has not missed an earnings estimate for 5 full years.



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