tl;dr
U.S. markets ended higher this week following the Federal Reserve's interest rate cut. The S&P 500 closed at 5,973.10 on Thursday, boosted by the rate cut announcement. The markets reached record highs after the Republican Party's election victories and optimism about President-elect Donald Trump's ...
U.S. markets finished higher this week after the Federal Reserve cut its key interest rate, extending record highs logged after the Republican Party won back the White House and the U.S. Senate. The S&P 500 ended 0.7% at 5,973.10 on Thursday, the jump catalyzed by the Fed’s 25 basis point rate cut announcement.
The markets have been lifted to record highs this week by election results, and the prospect of President-elect Donald Trump’s promised tax cuts. December S&P stock futures crossed the 6,000 mark for the first time on Thursday. The Fed’s quarter point rate cut on Thursday helped calm Treasury markets as well, after Chair Jerome Powell pointed to further easing.
Powell’s upbeat outlook for the economy and Trump’s reelection cheered the markets despite a mellowed earnings scorecard for the week. Only 53 out of 103 S&P 500 companies that reported earnings this week, beat both revenue and EPS estimates.
Out of the 6 companies from the Basic Materials sector that reported earnings this week, only two companies beat EPS estimates, while three companies missed estimates on both the fronts. DuPont de Nemours (DD) beat analyst estimates for EPS, but failed to beat revenue estimates. The chemical maker lifted its forecast for adjusted earnings to $3.90 a share from a prior range of $3.70 to $3.80 a share. The company expects sales to total $12.37 billion, down from a prior estimate of $12.40 billion to $12.50 billion.
Companies from the Communication Sector fared well this week, with four out of seven companies beating analyst estimates for both EPS and revenue. Paramount (PARA) beat adjusted EPS estimates, and missed revenue estimates by a slight margin. Warner Bros. Discovery (WBD) posted mixed results for its third quarter, with revenue at Studios falling 17% to $2.68B, hurt by lower box office collections on Beetlejuice and Twisters in the current year, which was more than offset by the stronger performance of Barbie in the prior year. On a per-share basis, it earned 5 cents, while analysts were expecting the New York-based company to lose 9 cents.
Among consumer companies, five out of eleven companies beat estimates on both EPS and revenue estimates. Yum! Brands (YUM) lost estimates for both EPS and revenue, reporting a 2% decline in consolidated same-store sales in Q3 to miss the consensus expectation for a decline of just 0.2%. Same-store sales growth was positive for Taco Bell ( 4%), but fell for Pizza Hut (-4%) and the KFC (-4%) chains.
Tapestry (TPR) raised its fiscal 2025 outlook, which is provided on a non-GAAP basis. The company now expects revenue of over $6.75 billion, representing growth of approximately 1% to 2% versus the prior year on a reported and constant currency basis. The company expects earnings per diluted share of $4.50 to $4.55, representing mid-single digit growth compared to the prior year.
Energy companies had a positive earnings scorecard to show for the week, with seven out of nine energy companies, beating profit estimates. Companies like Marathon Oil (MRO) and Targa Resources (TRGP) beat estimates, while Halliburton Company (HAL) missed estimates on both the fronts. Halliburton Company (HAL) Q3 Non-GAAP EPS of $0.73 missed by $0.02, while revenue of $5.7B missed estimates by $130M.
Out of the 18 Healthcare companies that reported earnings this week, 15 companies beat profit estimates. Companies such as Moderna (MRNA) swung back to profits on better-than-expected revenue in Q3 thanks to its updated COVID-19 vaccine. The mRNA-based vaccine maker attributed the sales growth mainly to the earlier launch of the updated COVID-19 shot that led to higher sales in the U.S. market.
The Technology sector formed the most part of the green half of this week’s earnings scorecard, with 13 out of 15 technology companies that reported earnings this week, beating profit estimates. Tech giants like Palantir Technologies (PLTR) and Qualcomm (QCOM) beat estimates on both the fronts. For the quarter ended September 30, Palantir reported adjusted earnings per share of $0.10 versus the consensus estimate of $0.09. Revenue totaled $725.52M, which was more than the consensus of $703M.
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