Mixed Earnings But Not Bad as Feared

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In his Daily Market Notes report to investors, Louis Navellier wrote:

Mixed Earnings

Mixed earnings results, and weak economic data are weighing on the market. 

The US Leading Index for March fell 1.2%, well below the -0.6% forecast.  This is the 12th month in a row of a negative number, and the lowest number since April 2020.

The Philly Fed rolled out several numbers today including the Manufacturing Index -31.1, also well below the forecast of -19.2, the 3rd month in a row down over 20 points and missing forecasts by double digits, and the lowest absolute level since the first months of the pandemic. Philadelphia is the 3rd largest manufacturing district in the country. 

On a positive note, the Philly prices paid number was well below forecast and also the lowest since the pandemic began. Likewise, New Orders and Shipments both declined to their lowest marks since May 2020.

The US initial jobless claims, expected to rise, fell slightly while continuing claims came in higher than the increase forecasted.  While existing home sales fell more than anticipated, the homebuilder ETF (BATS:ITB) has hit a 52-week high as inventory remains light.

Tesla’s Light Profit Margins 

On the earnings front, Tesla (NASDAQ:TSLA) had beats top and bottom but the profit margins were light as the company continues to cut prices (the leading Model Y’s price is now 29% lower than at the beginning of the year) and are bringing investor concerns about profit forecasts.

The stock is down 7.2% this morning though still up 55% YTD. Tesla’s price cuts are putting pressure on the entire auto sector, including in Europe.

AT&T’s Top Line Miss

AT&T (NYSE:T) had a top line miss, though a bottom line beat but disappointed on cash flow and subscriber growth. The stock is down 8.9% today and down 4.1% YTD.

There were a few disappointments in the regional bank sector, keeping the sector depressed; the KRE Regional Banking ETF is down 1.4% today and down 25% YTD. American Express (NYSE:AXP) had record revenues but a miss on earnings and a big loan loss adjustment. The stock is down 3% today and is up 8.7% YTD.

Interest rates are down today, crude oil is below $77.50, and gold is modestly higher at $2,010.

While earnings have been mixed, they are still better overall than feared, and while economic trends are weak they are bringing down inflation at the same time. The S&P remains over 4,100 and the NASDAQ above 12,000, and the VIX is below 17.

The bears expecting a major correction are going to have to continue to wait. 

Coffee Beans: Chonky Cat, Anyone?

A Virginia animal shelter is seeking a new home for a strikingly corpulent cat weighing in at a staggering 40.3 pounds. The cat is on a special diet and exercise plan to help him come down to a healthier weight. Veterinarians say the average domestic cat weighs about 10 pounds. Source: UPI. See the full story here.