After two days of market sell-off, suddenly everything’s coming up roses again: President Trump’s State of the Union address last night was followed by strong Q4 earnings results before today’s opening bell. We also see better-than-expected results from ADP’s ADP monthly private sector payroll report.
In fact, the 234K new jobs created for January was well ahead of the 180K anticipated, and although December’s results were revised downward by 8000 jobs, it still tallied 242K. This is outstanding jobs growth over the past two months, especially considering we have been near peak employment for quite some time now. Services led the way with 212K new jobs, with Manufacturing adding 12K and Construction +9K.
Non-farm payroll figures from the Bureau of Labor Statistics (BLS) on Friday morning should be very interesting in light of today’s results. One thing analysts will certainly be looking at – aside from the Unemployment rate, which is expected to dip to 4.0% – with be Average Hourly Wage Growth. With a jobs market this tight, it would stand to reason employees will start to see a rise in their take-home pay. The proof, as they say, will be in the pudding.
Q4 Earnings on a Roll
Even before the strong ADP report came out this morning, the Dow was already trading in the pre-market up more than 200 points – not quite erasing the losses from earlier this week, but definitely helping fill the hole. A big part of this came from a huge earnings report home run from Boeing BA.
The airplane-making giant brought in $4.80 per share in its Q4 earnings report, far ahead of the $2.91 per share expected in the Zacks consensus estimate. Revenues of $25.78 billion trounced the $24.83 billion analysts were looking for. Backlog was up compared to a year ago for the Zacks Rank #2 (Buy) company, but guidance was also sharply raised for full-year 2018 compared to expectations. As a result, shares shot up 3.6% initially and are approaching +6% at this hour in the pre-market. For more on BA’s earnings, click here.
Big Pharma’s Eli Lilly LLY also topped estimates for both earnings and revenues ahead of the opening bell, with $1.14 per share beating by 6 cents and revenues of $6.16 billion up $200 million from the Zacks consensus. Guidance was also upped for full-year to $4.81-4.91 per share, while revenue guidance stayed pat for now. For more on LLY’s earnings, click here.
Even Zacks Rank #4 (Sell)-based Simon Property Group SPG met estimates on its top and bottom lines, at $3.12 FFO (funds from operations, an important metric for REITs) and $1.43 billion, respectively. Guidance was also raised for full-year 2018, to FFO of $11.90-12.02. For more on SPG’s earnings, click here.
Mark Vickery
Senior Editor
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