In the week behind us, significantly better data on GDP growth in the US market was published, at 2.9% compared to expectations of 2.5%, which is a huge increase compared to the previous quarter when GDP growth was 1.4%. Improving macroeconomic data gives the Fed more room for a near-term interest rate hike. The decision on this is scheduled for Wednesday, and expectations are that interest rates will remain at the same level until the next meeting, barring any surprises. Next week, the US presidential elections will take place, and the whole world is closely listening and predicting who might be the future president and hold the most powerful position in the world. Let’s see how this relates to the capital market. In an election year, if a Republican candidate (Trump) wins, the capital market typically achieves higher returns on average that year, but the following year sees significantly weaker results. If a Democratic candidate (Clinton) wins, the market in the election year typically performs worse on average, but the following year achieves significantly better returns. Since the beginning of the year, the S&P 500 index has gained 4.03%. Whether the statistics will be right this time remains to be seen.
Table 1 – Capital Market Returns in Election Year
The biopharmaceutical sector is under special scrutiny from investors due to potential restrictions on companies raising drug prices if the Democrats win the presidential election, as their candidate has announced that she will address this practice and attempt to limit it. All of this has created nervousness for stocks in that sector, which have lost a lot of value in the past year. Let’s look at how the pharmaceutical corporation AbbVie Inc. (NYSE:ABBV) performed in the previous quarter, which is one of the leading companies in the pharmaceutical industry. The company develops, manufactures, and sells drugs. The current stock price is $57.60, and over the past 12 months, it has ranged from $50.71 to $68.12, while the company’s market capitalization is $95.85 billion. On the day of the financial report release, the stock price opened trading on the exchange with a large gap and fell by 6.28% compared to the previous day. Let’s look at the results of the report below. Earnings per share in the third quarter of this year are $1.21, which is $0.01 higher than analysts’ expectations. Earnings per share in the same period last year were $1.13, which is 7.08% lower than this year. Revenues in the third quarter of this year are $6.43 billion, which is less than analysts’ expectations, who forecasted a level of $6.56 billion, but is 30.16% higher than revenues in the same period last year, when they were $4.94 billion. The stock has lost about 3% since the beginning of the year and is included in the S&P 500 index.
During the week, the publication of quarterly financial reports continues. What business results companies will report, follow in our regular section Trading Room.
Quarterly Financial Report Release
The season for the release of financial reports for the third quarter is coming to an end. The largest corporations have published their business results over the past two weeks, which were better than expected, with some disappointments. We bring you an overview of the most interesting companies (with a market capitalization of over five billion USD) scheduled for this week. What awaits us this week and which companies will publish quarterly financial reports about their business can be read below.
Monday: Affiliated Managers Group Inc. (AMG), Alexandria Real Estate Equities, Inc. (ARE), Anadarko Petroleum Corporation (APC), Cardinal Health, Inc. (CAH), Check Point Software Technologies Ltd. (CHKP), CNA Financial Corporation (CNA), CyrusOne Inc. (CONE), Dominion Resources, Inc. (D), General Growth Properties, Inc (GGP), Loews Corporation (L), Mylan N.V. (MYL), NextEra Energy, Inc. (NEE), Public Service Enterprise Group Inc. (PEG), Roper Technologies, Inc. (ROP), Southern Company (SO), Tesoro Corporation (TSO), Vornado Realty Trust (VNO), Williams Companies, Inc. (WMB), Williams Partners L.P. (WPZ), Zimmer Biomet Holdings, Inc. (ZBH)
Tuesday: Alleghany Corporation (Y), American Electric Power Co., Inc. (AEP), Ametek Inc. (AME), Archer-Daniels-Midland Company (ADM), Cerner Corporation (CERN), Coach, Inc. (COH), Cummins Inc. (CMI), Devon Energy Corporation (DVN), Discovery Communications, Inc. (DISCA), Eaton Corporation plc (ETN), Ecolab Inc. (ECL), Edison International (EIX), Electronic Arts Inc. (EA), Emerson Electric Co. (EMR), Fidelity National Information Services, Inc. (FIS), FleetCor Technologies, Inc. (FLT), Gilead Sciences Inc. (GILD), Harris Corporation (HRS), HCP, Inc. (HCP), IDEXX Laboratories, Inc. (IDXX), Illumina Inc. (ILMN), Incyte Corporation (INCY), Intercontinental Exchange, Inc. (ICE), Iron Mountain Incorporated (IRM), Kellogg Company (K), LyondellBasell Industries N.V. (LYB), Martin Marietta Materials, Inc. (MLM), Molson Coors Brewing Company (TAP), Noble Energy, Inc. (NBL), Occidental Petroleum Corporation (OXY), ONEOK Inc. (OKE), ONEOK Partners, L.P. (OKS), Pfizer Inc. (PFE), Pioneer Natural Resources Co. (PXD), PPL Corporation (PPL), SBA Communications Corp. (SBAC), Verisk Analytics, Inc. (VRSK), Western Gas Equity Partners, LP (WGP), The Western Union Company (WU)
Wednesday: Alibaba Group Holding Limited (BABA), Allergan plc (AGN), The Allstate Corporation (ALL), American International Group, Inc. (AIG), American Water Works Company, Inc. (AWK), AmerisourceBergen Corporation (ABC), Annaly Capital Management, Inc. (NLY), Anthem, Inc. (ANTM), Automatic Data Processing, Inc. (ADP), Brookfield Property Partners L.P. (BPY), CenturyLink, Inc. (CTL), Cimarex Energy Co. (XEC), The Clorox Company (CLX), Continental Resources, Inc. (CLR), DaVita Inc. (DVA), Delphi Automotive PLC (DLPH), Energy Transfer Equity, L.P. (ETE), Energy Transfer Partners, L.P. (ETP), Equinix, Inc. (EQIX), The Estée Lauder Companies Inc. (EL), Eversource Energy (ES), Facebook, Inc. (FB), Henry Schein, Inc. (HSIC), HFF, Inc. (HF), Host Hotels & Resorts, Inc. (HST), Lincoln National Corporation (LNC), Magellan Midstream Partners LP (MMP), Marathon Oil Corporation (MRO), Markel Corp. (MKL), MetLife, Inc. (MET), Plains All American Pipeline, L.P. (PAA), Prudential Financial, Inc. (PRU), QUALCOMM Incorporated (QCOM), Sempra Energy (SRE), Spectra Energy Corp. (SE), Spectra Energy Partners, LP (SEP), TE Connectivity Ltd. (TEL), Time Warner Inc. (TWX), Twenty-First Century Fox, Inc. (FOXA), Vulcan Materials Company (VMC), Welltower Inc. (HCN), Zoetis Inc. (ZTS)
Thursday: Activision Blizzard, Inc. (ATVI), Alliant Energy Corporation (LNT), Apache Corp. (APA), CBS Corporation (CBS), Cigna Corp. (CI), Federal National Mortgage Association (FNMA), Gartner Inc. (IT), Huntington Ingalls Industries, Inc. (HII), The Kraft Heinz Company (KHC), Las Vegas Sands Corp. (LVS), Level 3 Communications, Inc. (LVLT), Liberty Global plc (LBTYA), Monster Beverage Corporation (MNST), Motorola Solutions, Inc. (MSI), Starbucks Corporation (SBUX)
Friday: The AES Corporation (AES), Ameren Corporation (AEE), Brookfield Infrastructure Partners L.P. (BIP), CenterPoint Energy, Inc. (CNP), DENTSPLY International Inc. (XRAY), Duke Energy Corporation (DUK), FirstEnergy Corp. (FE), Humana Inc. (HUM), Microchip Technology Inc. (MCHP), PG&E Corporation (PCG),
For all other companies, you can follow the quarterly report releases on Yahoo Finance
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The content of this article does not constitute investment advice nor should it be interpreted as a recommendation for trading in the capital market and other financial markets. The author disclaims any responsibility and is not liable for any potential loss incurred from trading based on this analysis. The ideas expressed in this analysis are solely the opinion of the Author and not the company in which he works. Everything presented in the article is written solely for educational purposes. Before starting to trade, it is important to understand the risks associated with trading financial instruments and financial products. Trading in stocks, ETFs, futures contracts, currencies (FX), CFDs, options, leveraged instruments, and other financial instruments involves high risk, so there is a possibility of losing the entire deposit and even more. You and only you are responsible for your investment decisions. The only recommendation we give is to consult with a licensed investment advisor.
