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Earnings & Data Deluge

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Pre-market futures are again trading up today, as expectations continue to be favorable for two things that have yet to be officially resolved: the U.S.-China trade war, where an increase on the current 10% tariffs on Chinese goods is scheduled to increase to 25% March 1st; and a budget agreement in Congress that will keep at bay another partial government shutdown, scheduled for the end of this week. Since the severe market sell-off on the half-trading day Christmas Eve last year, all domestic market indexes have traded up dramatically, largely due to sentiments such as these.

Q4 earnings season has also played a role in this, with a majority of publicly traded companies we cover having beating earnings estimates during the past month or so. More sectors have yet to be heard from, like Restaurants and Retail, but those results will be forthcoming from the 2018 holiday season, and consumer confidence was reportedly strong during the period. And with monthly (and weekly, expected tomorrow in Initial Jobless Claims) domestic employment metrics sustaining an historically strong U.S. labor market, there is plenty for market bulls to hang their hats on.

Yet many analysts expect another shoe to drop, either this year or in 2020, in the form of a recession formulated by the current global economic slowdown we’re seeing — not just in China, but the European Union (EU) as well — and political/policy friction here at home. For instance, while plenty of economists are expecting 2018 GDP growth at or around 3%, that’s in the rearview mirror; forward-looking estimates are for much slower growth in the economy, including a Q1 consensus estimate currently with a 1-handle on it.

This morning, we see a new Consumer Price Index (CPI) which slightly outperformed estimates at +0.1%, +0.2% ex-food & energy. Year over year, we’ve got 1.6% CPI growth, which beat the 1.5% expected. Ex-food and energy was also up on a year-over-year basis. More evidence that our economy is resilient and moving in the right direction, if not drenched in opulence at present. We’ll take it.

Q4 Earnings Roundup

Hilton Hotels (HLT - Free Report)  beat earnings estimates by a solid dime in its Q4 results this morning, at 79 cents per share. This marks growth of nearly 50% year over year, on an increase of 142 hotels in 2018 and 22,500 rooms overall. Revenues, however, though up 10% compared to the year-ago quarter, missed estimates of $2.32 billion and came in at $2.29 billion. Shares are up more than 4% in pre-market trading on the earnings beat. 

Teva Pharmaceuticals (TEVA - Free Report)  stock, however, is trading down 11% ahead of the opening bell today after missing on its bottom line and lowering full-year guidance. At 53 cents per share, the company missed the Zacks consensus by 3 cents, while revenues in the quarter outperformed slightly to $4.56 billion. Yet its Copaxone treatment fell 44% year over year, with both U.S. and Europe down 17% apiece.

DISH Network (DISH - Free Report)  is also down this morning, by roughly 5%, after its mixed Q45 results that saw its bottom line come 3 cents below estimates to 64 cents per share. The company has only topped expectations twice in the last 4 quarters. Revenues of $3.31 billion in the quarter were marginally beneath the Zacks consensus.

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