Stock Market Today Mid-Morning Updates
On Friday, the Dow Jones Industrial Average is down by over 300 points as investors continue to dissect Federal Reserve Chairman Jerome Powell’s speech on Thursday. He said that taming inflation is absolutely essential and also suggested a 50-basis point rate hike that could come in May. Investors continue to be increasingly concerned about potential drag on economic growth that could come from red-hot inflation.
Today, Kimberly-Clark (NYSE: KMB) is up by over 8% after beating top and bottom estimates in its latest quarterly earnings report. Not to mention, the consumer products firm highlights that it continues to navigate an inflationary and volatile business environment while achieving all this. At the same time, Schlumberger (NYSE: SLB) also reported strong earnings today and is raising its quarterly dividend by 40%. SLB stock is now up by 2.58% as a result of this. Shares of Gap (NYSE: GPS), however, were down by over 19% after cutting its sales growth outlook for the quarter. The company cites growing competition and its increase in promotions as key reasons for this.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.12% today while Microsoft (NASDAQ: MSFT) is also up by 0.10%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading lower on Friday. Among the Dow financial leaders, Visa (NYSE: V) is down by 1.96% while JPMorgan Chase (NYSE: JPM) is also down by 0.97%.
Shares of EV leader Tesla are up by 1.97% on Friday. Rival EV companies like Rivian (NASDAQ: RIVN) are up by 1.21%. Lucid Group (NASDAQ: LCID) is up by 0.76% today. Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading higher today.
Dow Jones Today: U.S. Treasury Yields Breaches 3% After Hawkish Fed Comments
Following the stock market opening on Friday, the S&P 500, Dow, and Nasdaq are trading lower at 0.82%, 1.14%, and 0.11% respectively. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is down by 0.14% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also down by 0.81%.
The benchmark 10-year U.S. Treasury yield has breached 3% today after Jerome Powell’s suggestion that a 50-basis-point rate hike could be in th works in May. The yield on the 5-year Treasury note was up at 3.013%, moving higher than the 30-year Treasury bond. This is known as a yield curve inversion, with investors selling out of shorter-dated bonds in favor of long-dated debt. This would indicate a lack of confidence in the health of the economy.
Today, the Republican-led Florida Legislature has passed a bill seeking to dissolve a special district. The district allows the Walt Disney Company to self-govern within the outer limits of the Orange and Osceola counties. This comes after Governor Ron DeSantis is in a fued with Disney over the company denouncing Florida’s so-caleld Don’t Say Gay law. The law limits early education teachings on sexual orientation or gender identity.
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Cleveland-Cliffs Stock Gains Following Rock Solid Quarterly Release
Among the top head turners in the stock market today is mining industry goliath Cleveland-Cliffs (NYSE: CLF). By and large, the current focus on CLF stock is courtesy of the company’s latest quarterly financial release. Diving in, CLF is looking at an earnings per share of $1.71, a substantial increase over last year’s $0.07. Moreover, the company also raked in a total revenue of $6.0 billion, marking a 50% year-over-year increase. Across the board, these results topped consensus analyst estimates of $1.49 earnings per share and $5.43 billion in revenue. Not to mention, CLF is seeing these strong figures after coming out of a record fiscal year.
Commenting on the company’s impressive momentum now is CEO Lourenco Goncalves. He believes that CLF’s latest performance serves to highlight its success following the renewal of its fixed-price contracts in 2021. As a result, the company is seeing strong profitability even as spot prices for steel declined in the first fiscal quarter. Ideally, Goncalves sees this leading to CLF achieving another free cash flow record in fiscal 2022 as well.
Also, CLF is well aware of the impacts of the Ukraine-Russia war and actively working to mitigate them. Goncalves explains, “Over the past eight years, our strategy has been to protect and strengthen Cleveland-Cliffs against the consequences of de-globalization, which we have always seen as inevitable. The importance of American manufacturing and the reliability of a USA-centric, vertically integrated footprint have been validated by the Russian invasion.” The CEO notes that while the company’s competition in the steelmaking space “scramble and pay high prices for their needed feedstock,” CLF stands out. Following this update, CLF stock is now gaining by over 9% at today’s market open.
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American Express In Focus As Consumer Spending Surges To Pre-Pandemic Levels
American Express (NYSE: AXP) or Amex, for short, is another major firm gaining attention on the earnings front today. Getting straight into it, Amex is currently boasting earnings of $2.73 per share. Notably, this crushes Wall Street forecasts of $2.44. Furthermore, Amex also beat consensus revenue estimates of $11.6 billion with sales of $11.74 billion for the quarter. For the most part, the company is citing a faster-than-expected surge in consumer spending for these solid figures. In particular, Amex saw travel and entertainment spending growing to pre-pandemic levels in the quarter.
In detail, Amex’s group revenues for the quarter, adds up to a whopping $11.74 billion. This would translate to a year-over-year increase of 29% and exceed consensus estimates of $11.6 billion. Worth mentioning, this momentum is commendable seeing as fiscal stimulus diminishes. Moreover, CEO Stephen Squeri also highlights another key growth factor for Amex. Squeri says, “This performance was enabled by our ongoing investments in areas critical to sustainable, long-term growth, including customer acquisition, engagement and retention.” With Amex’s results in mind, I could see investors eyeing AXP stock among other cyclical names today.
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