Thursday, October 24, 2019
This morning, new economic data joins high-profile Q3 earnings results, led by Initial Jobless Claims, which come out most Thursday mornings. A headline number of 212K new claims is still solidly within the healthy employment narrative (with a new BLS number expected a week from tomorrow). This is down 6000 from the upwardly revised headline from the previous week.
Continuing Claims have been also very consistently strong — beneath 12.7 million long-term claims for now several weeks running. This number reached 1.682 million, down a tick from the 1.683 million reported from the previous week. Again, these are some of the most positive and reliable numbers the U.S. economy has been getting in the later stages of our current bull market.
Durable Goods for September, however, painted a different picture: a headline print of -1.1% was the worst performance in 4 months. Estimates were for a read of -0.8%, and well off the +0.3% posted for August.
Core Cap Orders came in at -0.5%, well off the 0.0% expected, though a tick better than the -0.6% in the previous month. It is in these softer manufacturing numbers domestically that we are starting to see some cracks in the foundation of the aforesaid bull market.
Twitter Misses, Down Big
Ahead of the opening bell, Twitter TWTR reported earnings lower than expectations by 3 cents, to 17 cents per share, and worse than the 21 cents reported in the year-ago quarter. Revenues of $823.7 million missed estimates by 6% for the quarter, though are up 9% from Q3 2018. The company referred to “great-than-expected seasonality” over the summer months.
Further, Twitter expects these issues to continue into Q4, meaning don’t expect a performance rebound next quarter. These news items have sent Twitter shares down 17% in today’s pre-market. CEO Jack Dorsey re-directed to growth in Daily Active Users (DAU) of +17% year over year, and higher for the third quarter in a row. The company also looks to provide more political transparency and remove offensive tweets with more expediency, especially ahead of the important 2020 election year.
Shares had already pulled back from early-September highs as of late, but this morning we see the stock plummeting down to December 2018 levels. Twitter clearly has many things to work out as it moves forward; it will be up to investors to gauge whether these issues are a temporary glitch on Twitter’s road toward higher levels or whether they will provide a longer term albatross around the company’s neck. For more on TWTR's earnings, click here.
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