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Earnings And Economic Data Deluge

Zacks

Ahead of today’s opening bell, Q4 earnings season finally gets rolling this Friday. Though we have seen companies like Delta and Fed Ex report for the quarter in the past days and weeks, this morning we see a flock of banks and investment firms all reporting Q4 numbers, signaling the next three weeks of heavy earnings data to be reported ahead.

First up, JPMorgan Chase JPM beat earnings estimates by 7 cents per share, coming in at $1.76. (This, by the way, excludes a 69 cent-per-share impact — $2.4 billion — as a result of the pending tax reform laws.) Revenues in the quarter reached $25.5 billion, versus the $25.0 billion in the Zacks consensus estimate.

The Zacks Rank #3 (Hold) company returned a total of $67 billion to shareholders in 2017, by way of share buybacks and dividend yields. These numbers illustrate a healthy quarter — augmented a bit by a big drop in Fixed Income Markets (-27%) — with a very positive outlook. For more on JPM’s earnings, click here.

Zacks Rank #2 (Buy)-rated BlackRock BLK posted strong Q4 results, putting up $6.24 per share versus the $6.08 consensus estimate, on $3.47 billion in revenues that outpaced the $3.35 billion expected. From a top-line standpoint, this represents gains of 20% year over year. Fiscal year earnings hit $22.60 per share, +17% year over year. For more on BLK’s earnings, click here.


However, we see a mixed report for Wells Fargo WFC this morning. The Zacks Rank #3 bank topped earnings estimates, posting $1.16 versus $1.07 anticipated, but missed on revenues — $22,050 million compared with the $22,381 million in the Zacks consensus estimate. The company is also still trying to win back trust from customers following its fake accounts scandal.

Zacks Rank #2 (Buy)-rated PNC Financial PNC also surpassed estimates for its Q4 sales and earnings — $2.29 per share beat the $2.20 we had been looking for, where revenues of $4.26 billion outperformed the expected $4.17 billion. This amounts to top-line gains of 10% year over year. For more on PNC’s earnings, click here.

Consumer Price Index & Retail Sales

Finally today, another couple key metrics from a domestic economic standpoint: both the Consumer Price Index (CPI) and Retail Sales reads hit the tape ahead of today’s open. The CPI read follows the Producer Price Index (PPI) for December, which came in lower than expected.

For the CPI headline we see +0.1%, lower than the +0.3% we were looking for but at least still in positive territory. Ex-food & energy, this number does hit 0.3%. Year over year we see CPI growth of 2.1%, down a tick from November’s read. These numbers appear lukewarm, but are at least a little hotter than the PPI figures we saw earlier.

Retail Sales came in-line with expectations at +0.4%, following a by-most-accounts strong holiday shopping season. Ex-auto sales — as well as ex-autos & gas — this figure stays at 0.4%. Not only that, but the prior retail headline, from before the holidays, was revised considerably upward, from 0.8% last read to 1.4% this morning. We may see these numbers manifest in quarterly earnings for retailers, but we’re about a month away from seeing those reports come in.


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