Economic Data Deluge

This morning, we saw Initial Jobless Claims move lower for the 15th straight week, to 1.30 million from 1.31 million the previous week. This number came in higher than the 1.24 million expected, and remains at an elevated level consistent with a challenging labor market following the meteor strike that was the coronavirus pandemic this spring.

Continuing Claims, reported a week in arrears, went down for the 6th straight week to 17.34 million from 18.1 million the previous week. These figures are coming down at a more rapid clip than the new claims lately; it was only a couple weeks ago we were still looking at long-term claims north of 20 million. Yet 17+ million Americans out of work is nothing to scoff at, and reports of present and future layoffs as the reopening of the economy faces headwinds.

Retail Sales for June brought a ray of sunshine, +7.5% from the 5.4% expected. This depicts May’s all-time high 17.7% was not a flash in the pan; the strength of the consumer still looks viable as the economic rebound continues overall. Ex-auto sales, this figure comes in at 7.3%, illustrating a lack of volatility regarding big ticket-item purchases. Ex-autos and gas was 6.7%, again seeing strength behind higher fuel prices. Clothing and Accessories reportedly came in higher than 100% last month.

The Philly Fed survey for July also flexed some muscle this morning, hitting 24.1 over an expected 18.1. This is down a tad from June’s 27.5, but again, we were seeing a big bounce from this spring’s historic lows and were concerned those figures might not have much staying power. Whether they do remains to be seen, but this summer looks good for productivity in the 6th largest city in the U.S. (Philadelphia).

Q2 Earnings at a Glance

We saw strong beats this morning from a couple big banks and a major product retailer. Morgan Stanley MS and Bank of America BAC continued the good news (for the most part) narrative of the big banks reporting earlier in the week, while Johnson & Johnson JNJ also put up healthy numbers, considering expectations. All three stocks carried Zacks Rank #3 (Hold) recommendations going into their earnings reports.

Morgan Stanley reported $2.04 per share for its Q2, devastating the $1.17 expected and the $1.23 reported in the year-ago quarter. This makes 3 of the last 4 quarters the Wall Street investment bank has outperformed earnings expectations. Revenues of $13.41 billion beat estimates by more than 24%, and flew past the year-ago number of $10.24 billion. For more on MS’ earnings, click here.

Bank of America posted earnings of 37 cents per share, topping the Zacks consensus by 9 cents, though down considerably from the 74 cents per share reported in the year-ago quarter. Revenues came in at $22.33 billion, outperforming expectations by 2.6%, and down a bit from $23.08 billion a year ago. Shares are still down more than 30% year to date. For more on BAC’s earnings, click here.

Johnson & Johnson beat estimates by 17 cents to $1.67 per share in its latest quarter, though far lower than the year-ago EPS of $2.58. Revenues of $18.34 billion outpaced the Zacks consensus by 4.37%. The medical and consumer goods giant raised its sales and EPS guidance for Q3, and shares are up modestly on a down pre-market overall. For more on JNJ’s earnings, click here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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