Stocks prices surged higher on Tuesday as better than expected earnings results continued to perpetuate the uptrend. The S&P 500 index and the Nasdaq hit fresh all-time highs. Companies are reported earnings results that are double digits more than expectations compared to the average which is generally 3% more than expected. Despite a 1% rally in crude oil prices on Tuesday, energy shares were a lager. The large cap S&P 500 index is now up a robust 17% so far in 2019. If interest rates remain low, equities are likely to outperform.
Better than Expected Earnings are Driving the Market Higher
One of the reasons companies are reported better than expected financial results is the big decline in expectations following the large selloff in stock prices in December. Despite a drop in global economic data that provided a weak outlook, corporate America is showing that corporations are executing very well. Analysts had significantly lowered their guidance which companies are now exceeding. Most sectors were higher driven by a rebound in Healthcare which had been a lager for most of the year. Energy shares bucked the trend declining by 0.2%.
Twitter Beats on All Metrics
Twitter shares surged on Tuesday after the company reported better than expected financial results ahead of the opening bell. The social media company reported that daily users that could be monetized rose 6%, during the Q1 to 134 million from 126 million in the prior quarter. The strength in the additional user base came from outside the United States. The company also reported that Revenue rose 18% to $787 million in the Q1, up from $665 million a year earlier. This beat expectations of $774 million. Net income in the Q1 increased to $191 million, from $61 million a year earlier.
Procter & Gamble reported its strongest quarterly sales growth in eight years. P&G reported that revenue increased by 1% to $16.46 billion, as forex fluctuations cut into the total. The company reported a profit of $2.75 billion, or $1.04 a share, up from $2.51 billion, or $0.95 cents a share, a year earlier.
New Home Sales Rose to a 1.5-Year High
New Home Sales in the US rose to an 18-month high in March according to the Commerce Department, which was buoyed by lower mortgage rates. New home sales increased 4.5% to a rate of 692,000 which was the highest since November of 2017. This was the third straight increase in new home sales according to the Commerce Department. Expectations had been for new home sales to decline by 2.5% in March. Permits for the building of new homes increased 3% year over year. The median new house price dropped 9.7% to $302,700 in March.
After the closing bell there were several companies that reported earnings. Texas Instruments surged higher following earnings beat. The stock price at up 4% in the aftermarket.
This article was originally posted on FX Empire
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