Run the numbers
We’re nearly halfway through earnings season, and nervous investors are turning their attention to corporate financial reports after inflation, geopolitics and other concerns dragged markets down last month. However, the situation has been different in recent days as strong earnings reports have calmed nerves.
Futures suggest stocks will rise for the fourth day in a row, with headlines from big companies opening their books to investors mostly positive:
Alphabet said its fourth-quarter profits jumped 36% to $20.6 billion. Its shares rose 10% in premarket trading, a move worth nearly $200 billion in market capitalization.
Exxon Mobil gained $8.9 billion in the fourth quarter, a sharp reversal from its loss of $20 billion a year ago, propelled by rising energy prices. Its shares gained 6% yesterday after the report.
GM announced a sharp decline in fourth-quarter profits, but a 55% increase in annual profits for 2021, to a record $10 billion. Its shares are up 2% in premarket trading.
Starbucks said quarterly profit jumped 31% at the end of last year, to $816 million. Its shares are down nearly 3% in premarket trading as warnings about supply chain pressures weigh on the company.
UPS reported fourth-quarter earnings of $3.1 billion, exceeding analysts’ expectations, and recorded higher operating margins than it has achieved in years. Its shares soared 14% yesterday after the report, to a record high.
What are the news: The shipping giant raised its dividend nearly 50%, its biggest increase since its IPO, and said it would hit revenue and margin targets a year earlier than expected.
S&P 500 company earnings on track for fourth straight quarter of double-digit growth, according to FactSet. That’s expected to slow to single-digit percentages in coming quarters, but analysts also expect companies to gradually increase margins, getting more profit from every dollar generated in revenue.
Still optimistic, analysts tracked by FactSet expect the S&P 500 index to rise about 17% from its current level by the end of the year. Notable companies reporting profits next include Meta later today and Amazon tomorrow. Both of their stocks are trading higher ahead of market.
HERE’S WHAT HAPPENS
Job postings climb despite Omicron push. Employers posted 10.9 million job openings in December, near July’s record high. That equates to about 1.7 job openings for every unemployed person, the highest level since the United States began tracking.