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Earnings Data Deluge

Today’s pre-market trading activity appears to have reverted — at least for now — back to the sector rotation between growth/tech names and cyclical/value stocks. Currently, the Dow is +130 points while the Nasdaq is -20, indicating the cyclicals are in favor right now. The S&P 500, which includes both growth and value stocks throughout, is +8 points at this hour.

We don’t have any speeches from Jay Powell to parse this week, nor do we have any major economic data points to rummage through today. Following Tuesday’s rally — which came after Monday’s deep sell-off across the board — markets may be looking for direction this morning. They can find it by checking in with some of the latest Q2 earnings reports across multiple sectors.

Coca Cola (KO) posted a 19.3% positive earnings surprise this morning in its Q2 release, putting up 68 cents per share, which beat the Zacks consensus 57 cents and was well ahead of the 42 cents per share reported in the year-ago quarter. Revenues of $10.13 billion were 6.74% better than analysts were expecting, and far improved from $7.15 billion a year ago.

This is the third quarter of the last four where Coke has posted a positive earnings surprise. It’s relatively poor stock performance year to date — +1.8% — looks to have been boosted by this morning’s report, as shares are up 2.3% at this hour in today’s pre-market. The company carried a Zacks Rank #3 (Hold) rating into today’s report.

Johnson & Johnson (JNJ) also put up a positive surprise in its Q2 earnings report this morning: 8.77%. Earnings of $2.48 per share topped estimates by two solid dimes and posted a big improvement year over year from $1.67 in Q2 of last year. Its $23.31 billion in quarterly revenue was 4.5% higher than expectations, well past the $18.34 billion in the year-ago quarter.

J&J simply does not miss on its bottom line. The Zacks chart going back to 2009 shows naught but green arrows. That said, the stock is underperforming the S&P year to date, up a mere 7%. It has gained 0.5% so far on the earnings news ahead of today’s opening bell.

Top telecom firm Verizon (VZ) also topped expectations on both earnings and sales for its Q2 this morning, with $1.37 per share beating estimates by 7 cents, or 5.3%, on revenues of $33.76 billion — 3.3% higher than the Zacks consensus. These figures also bettered the year-ago $1.18 per share and $30.45 billion, respectively.

The company’s last earnings miss was back in Q4 of 2019, and only has four quarterly misses in the past five years. That said, the Zacks Rank #3 stock is actually down -5.4% year to date. It is now up 2% in today’s pre-market on its earnings release, so perhaps this is a harbinger for better things to come.

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