Income, Spending & Employment Cost Numbers, Plus More Q4

Friday, January 31, 2020

Pre-market futures this morning remain mostly in negative territory, as fears of the spreading coronavirus continue to dominate the headlines. As of the latest update, at least 213 people have died from the virus, with more than 9700 known cases the world over. But there is also plenty of economic and earnings news on this final trading day of the week and the month of January. Right now, the Dow in 150 points in the red, the Nasdaq down 30 points and the S&P 500 -13.

Personal Income for the month of December came in 10 basis points light of expectations at +0.2%, while November’s revision was also lowered by a tenth to +0.4%. Though we continue to see income growing in this historically strong U.S. labor market, rates are keeping stubbornly soft. This has been the narrative since unemployment numbers fell below 5% and stayed there in the first quarter of calendar 2016.

Consumer Spending for December, on the other hand, came in as strong as analysts were expecting: +0.3%, down from the unrevised +0.4% the previous month. Real Personal Spending grew by 0.1% for the month, while the Personal Consumption Expenditure (PCE) deflator came in at +0.3% — +1.6% year over year. Core Price Index for December reached +0.2%, in-line with expectations, and was also up 1.6% from a year ago.

The Employment Cost Index for Q4 also came in as expected: +0.7%, and +0.7% in this metric’s unrevised Q3 print. None of these are earth-shattering figures, but the keep the narrative aloft that employment remains healthy and wage growth has yet to push into notably higher territory.

Caterpillar (NYSE:CAT) posted a mixed Q4 earnings report ahead of today’s opening bell, beating bottom line estimates handily to $2.63 per share (from $2.37 per share expected), on revenues of $13.14 billion which were shy of the $13.59 billion analysts were looking for. This marks the first quarter in the last three where the heavy equipment manufacturer topped earnings estimates, though shares are down 1.6% in pre-market trading, adding to the -8.35% the stock has already lost year to date. For more on CAT’s earnings, click here.

ExxonMobil (NYSE:XOM) missed expectations on both top and bottom lines this morning, with 41 cents per share on $67.2 billion in sales short of the 44 cents and $69.1 billion estimated, respectively. This is the second quarter in the last four where Exxon has failed to meet earnings expectations, and the shares, already down 7.2% year to date, have fallen another 1.7% in today’s pre-market. For more on XOM’s earnings, click here.

For some better news, Zacks Rank #2 (Buy)-rated Colgate-Palmolive (NYSE:CL) met the 73 cents per share expected in its Q4 report this morning, on sales of $4.02 billion which outpaced the $3.94 billion in the Zacks consensus. Shares are up 5.6% in today’s pre-market, surpassing overall gains of the S&P 500 year to date. For more on CL’s earnings, click here.

Mark Vickery
Senior Editor

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