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Earnings Data Deluge

On this final trading day of the week, it’s almost as if Monday never happened. Excellent Q2 earnings results and elevated Covid vaccine activity in places previous resistant to it have soothed market participants’ greatest fears about another pandemic wave sweeping through the U.S., economy. The Dow is +170 points at this hour, the S&P 500 is +20 points and the Nasdaq, fresh off an all-time closing high Thursday, is up another +45.

About the only negative news headlines this morning stem from the People’s Republic of China, which continues its crackdown on profitable companies in technology and now education. Firms are now required to register with the central government and face harsh penalties for things like holding classes during the weekend, etc. For the meantime, the market is avoiding all Chinese stocks facing threats from its communist leadership.

Investors are seemingly having no trouble staying out of that lane, however, even in the Tech sector, as yesterday’s big earnings beats from Twitter (TWTR) and Snap (SNAP) sent those companies’ shares soaring. Furthermore, we’re not seeing a trade-off of growth-for-cyclicals, our normal self-correcting system of the past few months, but rather a race ahead on all indexes.

American Express (AXP) keeps the party going with its strong Q2 beat ahead of today’s opening bell: $2.80 per share represents a 70.7% surprise over the Zacks consensus and an astounding +866% over the 29 cents reported in the year-ago quarter. Revenues of $10.24 billion outpaced expectations by 8.12% for the quarter, well up from the $7.68 billion a year ago.

Of course, this is a company clearly benefiting from low base effects from last year’s pandemic crisis, when people were not going out, taking vacations or spending excessive amounts of money. Adding to this, high numbers of Millennials and Gen-Zers are obtaining AmEx cards and spending more during the Great Reopening. Thus, while shares are already up almost +45% year to date, AmEx has gained another +3.5% this morning. For more on AXP’s earnings, click here.

Honeywell (HON), while not producing quite as eye-popping results in its Q2 report this morning, still solidly beat estimates on both top ands bottom lines: $2.02 per share on $8.81 billion outperformed the Zacks consensus by +4.12% and +2.36%, respectively. Full-year revenue guidance has been raised, largely on expected gains in the Aerospace sector. Shares are slightly trailing the S&P year to date but up over 50% from a year ago. For more on HON’s earnings, click here.

One other negative piece of news this morning comes from Q2 earnings results from Kimberly-Clark (KMB), whose $1.47 per share reported missed the $1.73 analysts had been expecting. Revenues of $4.7 billion were short of expectations for closer to $4.8 billion, and the company expects an organic sales decline for full-year 2021 by 0-2% on higher input costs.

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