Tuesday, July 30, 2019
Another busy day awaits investors here in the middle of summer: the U.S. and China resume trade talks in Beijing today, with Treasury Secretary Mnuchin and Trade Rep Lighthizer working to re-establish and/or resurrect a trade deal (as President Trump rips China’s economy and integrity), the first day of a new two-day Fed meeting commences, which is likely to result in a 25 basis-point interest rate cut tomorrow afternoon, and Apple (AAPL - Free Report) reporting earnings after the closing bell later today.
Capital One (COF - Free Report) is in the news this morning following a news report that a hacker has been arrested in connection with breaching 106 million accounts. The breach, which reportedly happened in late March, has reportedly been “fixed,” going forward, and spokespeople at Capital One do not believe the hack was used to disseminate or defraud any customers of the credit card major.
Personal Income for June came in-line with expectations at +0.4% this morning, which is also the tally from the downwardly revised headline for May. Consumer Spending also came in-line at +0.3%, while month-earlier revisions ratcheted up 10 basis points to +0.5%. Real Personal Spending came in at 0.2%.
Core Inflation for June was also along expectations at +0.2%, same as the previous month, with the Deflator at 0.1%, 1.4% year over year. Core Deflator reached 0.2% in June, +1.6% year over year, down a tick from the 1.7% expected. In short, steady (if not robust) income, spending and inflation prints continue for the U.S. economy.
These may provide further grist for the mill at the Fed meeting today and tomorrow… or perhaps not. Smart money is on a rate cut, regardless what the economic data presents.
Q2 Earnings Roundup
Pfizer (PFE - Free Report) posted a mixed Q2 earnings report this morning, with 80 cents per share outperforming estimates by 3 cents, on $13.26 billion in sales which missed the $13.32 billion consensus. However, the company also announced a coming spinoff of its Upjohn business with generic drug competitor Mylan (MYL - Free Report) , which would create one of the top generic drug companies in the world. Shares of Pfizer/Mylan would exchange at 1 to 1.
The Big Pharma staple adjusted its full-year guidance downward, as well. Shares of Pfizer are roughly flat year to date, now dropping a bit more than 2% in today’s pre-market. For more on PFE’s earnings, click here.
Keeping with the pharmaceuticals for a moment, Merck (MRK - Free Report) impressed investors in its Q2 earnings report, posting $1.30 per share versus $1.16 expected (and $1.06 in the year-ago quarter), on $11.76 billion which topped estimates by 7.75%. Merck shares have not performed as well as the overall SP 500 year to date, but are growing around 2.4% ahead of the opening bell. For more on MRK’s earnings, click here.
For good measure, Procter & Gamble (PG - Free Report) and Eli Lilly (LLY - Free Report) also came out ahead in their fiscal quarterly earnings, though Lilly was down slightly on its top line, and down notably year over year.
Ralph Lauren (RL - Free Report) topped the Zacks consensus this morning on both top and bottom lines, while upping full-year revenue guidance. Meanwhile CononcoPhillips (COP - Free Report) underperformed fairly drastically, missing on earnings by 3 cents per share and revenues by more than 15%. Shares are falling 2% in today’s early trading.
For more on PG’s earnings, click here.
For more on LLY’s earnings, click here.
For more on RL’s earnings, click here.
For more on COP’s earnings, click here.
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