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Focus on Earnings, Jobless Claims

Here’s a small cross-section of Q2 earnings reported ahead of the bell today:

Bank of New York - Mellon BK beat bottom-line estimates by 4 cents to 88 cents per share, representing 17.3% growth year over year. Revenues of $3.95 billion also surpassed expectations of $3.85 billion. The bank also bought back more than $500 million in share repurchases in the quarter, and the stock is up 1% in today’s pre-market following these results.

Paints and coatings giant Sherwin-Williams SHW reported a mixed Q2 this morning, missing on earnings by 2 cents to $4.52 per share, while sales far outpaced the Zacks consensus to $3.74 billion, representing growth of 16% year over year. The company also bumped up its Q3 estimate by 2 cents per share, even as the company’s purchase of competitor Valspar promises to weigh on earnings, near-term.

Philip Morris PM has missed Q2 estimates on both top and bottom lines this morning, reporting $1.14 per share ($1.23 was expected) on quarterly sales on $6.9 billion ($7.1 billion was expected). The tobacco products manufacturer lowered guidance for fiscal 2017, and shares are trading down in today’s pre-market.

Jobless Claims, Philly Fed Both Fall

Thursday morning Initial Jobless Claims fell by 15,000 week over week to 233K from a slightly adjusted 248K the previous week. This figure had been hovering at or near the top of the 225-250K range jobless claims have been in for most of the past 52 weeks, so this drop looks pretty notable. Continuing claims rose, however, from 1.95 million two weeks ago to 1.977 million last week. Still, continuing claims remain under the psychologically pleasing 2 million threshold, so these all point to further signs of a strong U.S. labor market.

July’s Philly Fed survey was a disappointment this morning, however: its latest read of 19.5 was well below the 23.0 expected and the 25.6 in June. Because this tracks the economy of just one major U.S. city, however (Philadelphia), we tend to get highly volatile reads from month to month. So while this figure is not great, it has been lower — and may even bounce back next month, depending.

CBO Slams ACA Repeal, White House Slams CBO

The Congressional Budget Office has released its study of the repeal in Congress of the Affordable Care Act (ACA, or Obamacare) begun last year and projected out a full decade. The results aren’t pretty: 32 million people currently covered would be kicked off the rolls by 2026 and premiums would increase by 100%. Deficit reductions would fall short of the ideal $1 trillion to only $473 billion.

The White House called the CBO’s methodology “flawed.” But the healthcare reform issue continues to be a thorn in the side of the Trump administration, not only in demonstrating the fundamental disconnect within Congress (of which the House, Senate and White House are all run by the same party) or in fulfilling promises of healthcare reform on the campaign trail, but because future tax reform is jeopardized without a healthcare package passing into law first. This is before discussing whether both houses of Congress might see a midterm upheaval in 2018, based on the government’s ineffectuality.

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