Earnings Data Deluge
Pre-market futures are sullen prior to today’s open, perhaps partly with some residue from Netflix’s (NFLX) Q1 earnings disappointment after yesterday’s close. Market participants also are starting to walk back the notion that the Fed is done raising interest rates until after its May meeting. The Dow and the Nasdaq are both down -100 points currently, whereas the S&P 500 is -25 points in the red at this hour.
We see Q1 results from Morgan Stanley (MS) this morning, with the investment giant easily beating estimates on the top line while also posting a quarterly earnings beat. Earnings of $1.70 per share were 3 cents ahead of expectations, though still -19% year over year. Revenues of $14.52 billion were notably ahead of the $13.91 billion anticipated. Higher fixed income and wealth management in the quarter were balanced out by a -24% drop in investment banking. Yet shares are selling off on the news, -4% in this pre-market.
U.S. Bancorp (USB) is out with Q1 earnings results ahead of the opening bell, outperforming on its bottom line by 3 cents to $1.16 per share, and above the 99 cents posted in the year-ago quarter. For revenues, the bank slightly edged out the Zacks consensus, $7.14 billion versus $7.13 billion expected — well above the $5.57 billion from Q1 2022. Shares of the Minneapolis-based bank have fallen -19.3% year to date, but are up +3% in today’s pre-market.
After today’s close, we’ll see Q1 earnings results from Tesla (TSLA) and IBM (IBM), two bellwether companies (perhaps “former bellwether” would better describe IBM these days) reporting, both expected to come in below year-ago quarter’s earnings but ahead on revenues — in Tesla’s case, notably ahead. Tesla is also trying to keep its winning streak of 8 straight earnings beats alive. IBM will be trying to start a new string of earnings beats after last quarter’s miss.
And a new Beige Book awaits us as of 2pm ET today. This summary of economic events and forward outlook are a key into how the Fed is looking at our current financial state, and it follows last report’s flat-to-up read on the economy. There are no major predictions over what’s going to be in today’s Beige Book; more often, analysts check the Beige Book to further calibrate what the Fed is likely to do at its next meeting.
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