Earnings Data So Far Support These Portfolio Holdings
Tomorrow’s numbers from ADP will likely be more telling than today's JOLTS report.
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After eking out another record close for the S&P 500 last night, the market, at least for now, looks to extend those gains today. This is despite lower-than-usual trading volume.
We have a modicum of items on today’s economic calendar that includes May home price trends, which we see as rear-view facing at this point, as well as July Consumer Confidence and the June JOLTS openings data at 10 a.m. ET. Consumer confidence is expected to tick up compared to its June figure, and we’ll be interested in the color revealed in those findings.
June job openings and quits figures will provide insight in the JOLTS report, but the rise in job creation found in the Flash July PMI report from S&P Global (SPGI) has us more interested in tomorrow morning’s July Employment Change Report from ADP ADP. That report, which will give us another take on July job creation, is also the last major one before the Fed renders its next policy decision tomorrow afternoon.
Connecting the dots from this morning’s earnings reports
Meanwhile earnings continue to roll in this morning, and those reports continue the overall trend of companies beating June-ending quarter expectations. Corning’s GLW results and comments for its Optical Communication segment, which posted a 41% year-over-year jump in sales for the quarter, illustrate the continued strength in AI and data center demand, but it also supports our thinking for a rebound in enterprise and carrier infrastructure spending. In other words, positive for Marvell’s MRVL “other” segments. Corning also lifted its expectations for the current quarter above market forecasts. We’ll dig into the company’s end market comments further as we digest this morning’s earnings call.
JetBlue JBLU reported that demand for its air travel improved throughout the quarter, and it sees that continuing in the coming quarters. That reaffirms comments from other airlines, and it keeps us bullish on shares of American Express AXP as we wait for the company to share more about its Platinum card refresh.
Offsetting those positives, UnitedHealth UNH cited rising medical costs as it guided its 2025 outlook below consensus expectations. In an effort to get those costs under control, we will be looking to see if UnitedHealth and others are embracing outsourcing strategies, which could be a positive for our shares of Labcorp LH.
And UPS UPS pulled its full-year guidance after issuing a mixed June quarter earnings report, citing macroeconomic uncertainty. Sizing up the performance of its US domestic segment against digital shopping data for the quarter, it suggests UPS is continuing to lose market share. Odds are that it is to Amazon AMZN and helps set up Amazon’s June quarter earnings report later this week.
Coming up – Waste Management comments
Coming up, we’ll sift through Waste Management’s WM quarterly results that topped expectations due to a combination of higher pricing and steady demand for garbage collection and disposal. While the guidance was a bit mixed with management tightening its 2025 revenue forecast to $25.28 billion-$25.48 billion vs. the $25.5 billion consensus, it reaffirmed its adjusted operating EBITDA guidance midpoint of $7.550 billion and increased its free cash flow projection to $2.8 billion-$2.9 billion.
Bank of American has already increased its WM target to $254 from $244, and as we review the guidance in full, we’ll revisit our $245 target as necessary.
The Pro Portfolio is long WM, AMZN, LH, AXP.
