Jobless Claims Increased More Than Expected
New Jobless Claims numbers this morning continue to put a subtly different tilt on our current labor market: just like yesterday’s lower-than-expected ADP (ADP) private-sector payroll tallies, ahead of today’s opening bell we see both new and longer-term jobless claims jump unexpectedly higher. Initial claims came in 10K higher than estimates to 224K — the highest weekly print since mid-August of last year, and north of the upwardly revised previous week’s 215K. Continuing Claims reached 1.898 million — the loftiest number since before Thanksgiving, and a week-over-week leap of 70K new longer-term claims.
Q4 Productivity also came in hotter than projections: +3.2% versus the +2.5% consensus estimate. This is still well off the previous quarter’s +4.9% pace (which has been downwardly revised from the previous +5.2% reported), which itself was the strongest productivity figure since the +5.7% of the pandemic-ridden Q3 2020. Meanwhile, Unit Labor Costs were cut more than in half from estimates of +1.2% to +0.5%. In summation, higher-than-expected productivity with lower-than-expected labor costs are indicative of a strong economy.
After today’s market opens, two Manufacturing PMI numbers — from S&P and ISM — for January. Both are expected to tick down a tad from the previous month’s reads. Also, Construction Spending for December and January Auto Sales (releases dispersed throughout the day, based on manufacturers’ reporting schedules) will hit the tape as the day moves forward.
Once the market closes, we’ll await earnings reports from a large swath of the so-called “Magnificent 7” stocks: Apple (AAPL), Amazon (AMZN) and Facebook/Instagram/WhatsApp parent Meta Platforms (META) all come out with hotly expected quarterly numbers (leaving only NVIDIA [NVDA] as the remaining “Mag 7” company to report). Expectations for earnings growth are +11.7% for Apple, +61% for Meta and a whopping +285% for Amazon, year over year.
Ahead of today’s open, we also have a slew of earnings reports out. In the interest of saving time, we’ll highly just a few with strong Zacks Ranks as of the time of the earnings release.
Zacks Rank #2 (Buy)-rated Cardinal Health (CAH) outperformed expectations in its fiscal Q2, with earnings of $1.82 per share outpacing the $1.56 expected (and notably above last year’s $1.32 per share), with quarterly revenues +1.10% from the Zacks consensus to $57.45 billion. Shares are selling the news, however, though this may be the result of having gained +8% year to date and its announced acquisition of Specialty Networks for $1.12 billion.
International Paper (IP), which carried a Zacks Rank #1 (Strong Buy) into its Q4 earnings report this morning, put up mixed numbers: earnings of 41 cents per share outperformed the 34 cents anticipated for a +20.6% earnings surprise, while revenues of $4.6 billion came in shy of expectations by -1.9%. Shares are trading down -2% on the news, so the expected move higher from this industrial stalwart appears as if it’s going to have to wait a little longer.
Zacks Rank #3 (Hold)-rated Honeywell (HON) reported earnings of $2.60 per share, which met estimates exactly (though higher than the $2.52 per share reported in the year-ago quarter), while revenues of $9.44 billion came in -2.7% shy of the Zacks consensus. Like IP’s stock performance, lately the industrial conglomerate has been hitting the skids: -2.3% on the news of the Q4 release compounds the -3.6% for the company, year to date.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
International Paper Company (IP) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
