Earnings season starts–Part 1 banks to disappoint

Earnings season starts–Part 1 banks to disappoint

Earnings season for the fourth quarter of 2023 begins on Friday, January 12 with reports from the big banks JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and Bank of America (BAC). Which means that earnings season is going start off with a dull thud. More than 70% of the Standard & Poor’s 500 companies that are scheduled to report earnings for the fourth quarter over the next few weeks are banks and the banking segment of the the financial sector in the index is projected by Wall Street analysts to show a 21% year over year decline in earnings

JPMorgan Chase starts off big-bank earnings by knocking it out of the park (Go Phillies!)

JPMorgan Chase starts off big-bank earnings by knocking it out of the park (Go Phillies!)

Maybe JPMorgan Chase (JPM) CEO Jamie Dimon felt his bank’s earnings report was so good that he had to pour a little cold water on investors. “This may be the most dangerous time the world has seen in decades,” Dimon said in a statement Friday. He also issued a caution about the records set in the third quarter. “These results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalize over time.” But the caution aside, it’s hard for me to find anything not to like in the big bank’s report.

Have you missed it? Some stocks are on the brink of a correction

Have you missed it? Some stocks are on the brink of a correction

The Standard & Poor’s 500 index (closing price) peaked on July 31 at 4588.96. The index is down 5.9% since then (as of the September 22 close.) That’s not correction territory (a drop of 10% ore more) but I’d say stocks can feel the hot breath of a correction on the back of their necks, The small-cap Russell 2000 Index has lost more than 11% from its July 31 closing high, roughly twice the decline in the S&P 500 Index over the same time. There are other signs of trouble in the stock market.

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

The key sentiment barometer I’m watching is Palo Alto Networks (PANW), down 13% in the last month on fears that Microsoft (MSFT) is going to gobble up the revenue growth in the cybersecurity space. I think that fear is overblown, at least when it comes to Palo Alto Networks. The stock has long been a favorite of growth stock investors and, if sentiment on market direction for the rest of 2023 is positive I’d expect strong buying in the shares ahead of the Friday, August 18, earnings report. The Wall Street consensus calls for the company to report earnings of 54 cents a share against 15 cents a share in the fiscal quarter a year ago.

Tesla drops today on earnings–it’s all about falling margins

Tesla drops today on earnings–it’s all about falling margins

Tesla (TSLA) delivered a big beat over Wall Street estimates when the company reported second quarter earnings after the close yesterday. The company reported earnings of 91 cents a share, well above the Wall Street projection of 80 cents a share. But in after hours trading, the stock still fell by 4.20%. Today, July 20, the shares are down 7.17% as of 10:45 a.m. New York time. And this comes despite another record quarter of unit sales. The problem?

Saturday Night Quarterback says (on a Sunday), For the week ahead expect…

If we’re in a growth recession, the upcoming earnings season is going to be wild

Right now economists are projecting that the U.S. economy didn’t slip into a recession in the second quarter that ended on June 30. But those same forecasts are looking for a further slowdown in economic growth in the quarter.

On July 3 the GDPNow forecast from the Atlanta Federal Reserve Bank put second quarter growth at an adjusted annual rate of 1.9%. That’s down from the model’s 2.2% forecast on Jone 30. And that rate of growth would be a further deceleration from the 2.0% growth rate (that was an upward revision from a first estimate of just a 1.3% growth rate) in the first quarter and the 2.6% growth in the fourth quarter of 2020. The very recent downward revision in the GDPNow forecast is a result of a drop in private domestic investment growth to 8.8% from 10.4%.So now recession–good news–but a further slowdown in the economy–expected with the Federal Reserve raising interest rates. And a continued drop in company profits.

First quarter earnings far: Bad but not as bad as feared

First quarter earnings far: Bad but not as bad as feared

When is a 4.5% year-over-year drop in earnings for the stocks in the Standard & Poor’s 500 good news? When the forecast for first-quarter earnings projected a 6.8% drop. Bloomberg now projects, with 74% of the companies in the S&P 500 reporting first-quarter results, that earnings for the stocks in the index will be down 4.5% year over year this quarter.

Netflix misses, badly, on subscribers in the first quarter

Netflix misses, badly, on subscribers in the first quarter

Last night after the market close, Netflix (NFLX) reported first-quarter 2023 results that showed new subscribers grew by just 1.75 million in the first quarter against expectations for 2.3 million additions. Earnings and revenue projections disappointed investors: Netflix said it anticipates earning $2.84 per share on $8.24 billion in the second quarter. Wall Street analysts had forecast earnings of $3.05 per share on $8.5 billion in revenue. For the first quarter, revenue and earnings for the first quarter roughly matched Wall Street consensus estimates. Revenue was $8.16 billion versus an expected $8.18 billion. Earnings per share were $2.88 versus $2.86 expected Today, April 19, shares of Netflix were down 3.34% as of noon New York time.