Up And To The Right

US earnings boost markets

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What's going on?

Quarterly updates from consumer favorites Coca-Cola and Procter & Gamble (P&G) helped encourage investors to buy up stocks overall on Tuesday.

What does this mean?

Long hoped-for product price hikes by P&G were to thank for its higher-than-expected sales and profit – and increased forecasts for the rest of 2019. Rival Kimberly-Clark’s Monday report showed the same: higher prices offset the negative effects of a rising US dollar, helping the company exceed expectations.

Global drinks magnate Coca-Cola was crushing cans globally: it sold more products in Asia and Europe than a year ago with some stockpiling (in anticipation of Brexit) partly to thank. Stateside, raising prices on existing products and introducing more expensive new ones helped Coke to an effervescent quarter.

Why should I care?

For markets: Teeing up a winning quarter.

This week, 140 of the 500 biggest US companies will release quarterly updates. Investors may look to a few bellwethers for clues on how those reporting later will fare. With the US stock market at an all-time high, it’s so far, so good for investors. According to FactSet, more than 78% of companies reporting first-quarter results have beaten investors’ predictions thus far. Across the Atlantic, Europe’s getting busy too: big banks there begin reporting earnings this week, as American ones did last…

The bigger picture: Strong earnings from the bird and the bee.

Twitter’s stock fluttered 15% higher on Tuesday after it reported a quarterly profit that tripled compared to the same time last year. The social media platform cleaved several fake accounts last quarter – and brands (like Coke and P&G) advertising directly to real consumers paid up, helping Twitter’s earnings fly by forecasts. Elsewhere on Tuesday, industrial giant United Technologies’ stock rose 2% after better-than-expected results and a raised forecast for the rest of the year. And thanks to the Bumblebee movie, toy maker Hasbro’s sales buzzed beyond forecasts – its stock, too, flew up 15%.

Originally posted as part of the Finimize daily email.

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