Thursday, April 26, 2012
This morning's earnings reports are not that bad if we realize
that not every company can do what
Apple
(
AAPL
) did the other day. That said, we do have a few uninspiring
reports this morning from bellwether operators like
Exxon
(
XOM
) and
United Parcel Service
(
UPS
) that puts Apple's outperformance in its appropriate context.
While we can't say that this morning's earnings reports are
altogether disappointing, there is no other way of describing
Jobless Claims reading.
The Jobless Claims data fails to satisfy the doubts raised by
the recent run of underwhelming labor market reports, starting with
the surprise March payroll miss. The official report says that
Initial Jobless Claims dropped by 1000 to 388K, but in reality it
is a 2000 increase as the preceding week's tally was revised higher
by 3000. The four-week average, which tends to smooth out the
inherent week-to-week jumpiness of this series, increased by 6.2K
to 381.8K last week.
It is unclear at this stage whether the emerging softness in
labor market over the last few weeks is a reflection of economic
improvement stalling or just due to complications in seasonally
adjusting this data. Bernanke has his own theory to explain the
recent run of soft labor readings, which he explained again in his
press conference Wednesday afternoon. He thinks that the pre-March
strength may have been caused by a temporary catch-up in hiring to
compensate for the over-reaction of employers during the downturn.
But irrespective of whether seasonal factors or something more
fundamental is behind the recent run of weak labor market readings,
it is nevertheless raising doubts about the sustainability of the
recovery. We will get a better read on the labor market in a week
from Friday when we get the April non-farm payroll numbers.
We have a huge day on the earnings front today, with more than
60 companies from the S&P 500 coming out with results. Of the
more noteworthy results this morning, we got earnings misses from
Exxon
and
UPS
, though
Pepsi
(
PEP
) and
Dow Chemical
(
DOW
) came ahead of earnings expectations.
Amazon
(
AMZN
) and
Starbucks
(
SBUX
) will report after the close today.
Sheraz Mian
Director of Research
APPLE INC (
AAPL
): Free Stock Analysis Report
AMAZON.COM INC (
AMZN
): Free Stock Analysis Report
DOW CHEMICAL (
DOW
): Free Stock Analysis Report
PEPSICO INC (
PEP
): Free Stock Analysis Report
STARBUCKS CORP (
SBUX
): Free Stock Analysis Report
UTD PARCEL SRVC (UPS): Free Stock Analysis
Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
Report
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