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Michael George Haddad
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Hello: US equity markets were calm on Monday as investors waited for more financial results and economic data to come later this week. It was more or less the same Tuesday. European equities declined slightly and US equity futures were mixed.
Futures on the
Dow Jones Industrial Average
increased by 0.1%,
S & P 500
the futures were flat, and
Nasdaq Composite
futures contracts fell by 0.1%.
On Tuesday, in Morning Movers, we (1) summarize the earnings news, (2) take a closer look at GE, and (3) consult the Wall Street analysts.
Barron's memoirs
Earnings monitoring: More than 50 S & P 500 companies announced a profit on Tuesday. In total, more than 265 companies in the index reported quarterly results. About 76% of the companies surveyed beat Wall Street's earnings estimates. This is a good level, but companies love to put the earnings bar too low to be able to go above the bar in the communication of the numbers.
Earnings growth is positive, even if it is not spectacular. On Tuesday morning, when we looked at the numbers, the growth was 1.8%. This level of earnings growth will not be rewarded, but it's better than the recession that some feared.
Wall Street analysts predict that earnings growth will accelerate in 2019.
Monday night after the market closes, Google parent
Alphabet
(symbol: GOOGL), the stock fell nearly 8% after the company said growth in its advertising revenue had slowed. Tuesday morning, however,
General Electric
(GE) and
Merck
(MRK) beat Wall Street estimates. Merck also raised its earnings guidance for the full year by about one cent, or 2%.
There is something about Larry: GE action jumped 6% in pre-market trading after the conglomerate reported better-than-expected results. The company posted adjusted earnings per share of 14 cents, higher than the 9-cent forecast of Wall Street. Income matters little, however, as the 127-year-old industrial group attempts to reverse the situation. Cash flow was better than expected and better cash management was probably what excited investors.
It's also the proxy season, and GE's recent form of proxy details the incentive plan for new CEO Larry Culp. Culp could earn shares worth up to $ 232 million if it achieves its performance goals. That's a lot, but that would mean GE realizing a market value of over $ 260 billion, up about 230%.
Updates and downgrades:
JP Morgan
improved actions of
Alaska Air
(ALK) to overweight with a price target of $ 72, 19% higher than recent levels. This comes a day after
German Bank
improved
American Airlines
Buy with a target price of $ 40. Wall Street is warming to shares of airlines that trade less than 10 times the average profit. On the other side, Alphabet has been demoted to Stifel after the weak results of the company.
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