M&A, Q1 Earnings In Focus

The long-awaited merger between T-Mobile U.S. (NYSE:S) and Sprint (NYSE:S) has finally been inked, now proposed to create a Big 3 in U.S. telecommunications firms. It remains to be seen if regulators will allow the merger to complete, but if they do, these two companies’ strengths — Sprint’s coverage and T-Mobile’s growth — look to create plenty of synergies.

The deal is in all stocks, worth roughly $26 billion. Every one share on TMUS would beget 9.75 S shares. However, pre-market activity to kick off the week is not exactly going gangbusters for this merger: T-Mobile U.S. shares are currently down 2.3%, while Sprint is trading down ahead of the opening bell by 13%.

New Purchasing Income & Spending results for the month of March hit the tape this morning, as well, with Purchasing up 0.3% and Spending +0.4%. Analyst estimates for both were for growth of 0.4%, so we’re more or less in-line with this result. Real Spending was also up 0.4%, with the Personal Consumption Deflator month over month at a zero balance. Core year over year was +0.2%.

All of these numbers indicate a slow, steady climb in particular inflation metrics — nothing frighteningly unruly, nor stuck in the mud. Though these are not among the most scrutinized economic indicators to be released each month, by market analysts, economists and most importantly members of the Federal Open Market Committee, they nevertheless suggest our Goldilocks environment has persisted through the first quarter of 2018.

After Monday’s closing bell, we expect to see another healthy portion of Q1 earnings results. But as the company names indicate — Transocean (NYSE:RIG) , Tenet Healthcare (NYSE:THC) and NutriSystems (NASDAQ:NTRI) among them — this is not an earnings day with lots of marquee names.

Ahead of today’s open, we have results from McDonalds (NYSE:MCD) Q1, with the global quick-service restaurant and Zacks Rank #3 (Hold)-rated stock easily beating estimates from the Zacks consensus: earnings of $1.79 per share topped the $1.67 expected, whereas revenues of $5.14 billion surpassed the $4.93 billion analysts had been looking for. Global comps reached 5.5% in the quarter, well past the 3.7% expected and now the 11th straight quarter of growing comps for the company. For more on MCD’s earnings, click here.

Zacks Rank #3-rated conglomerate Loews Corporation (NYSE:L) also reported results before the opening bell, posting a nice beat on the bottom line to 89 cents per share from 78 cents expected, and +2.3% year over year. Led by its insurance segment — the also publicly traded CNA Financial’s (NYSE:CNA) $1.03 per share vs. the 90 cents in the Zacks consensus, as well as a narrower loss per share at Diamond Offshore (DO), -$0.16 per share against the -$0.19 anticipated.

For more on L’s earnings, click here.

For more on CNA’s earnings, click here.