Goldman Sachs Just Reported A Monster Earnings Beat

Plus, earnings results weren’t so good for Bank of America and Wells Fargo, stimulus is looking evermore unlikely prior to the election, and Apple unveiled its newest iPhones. 

Stocks were higher to start Wednesday with the Dow gaining 47 points, or 0.2%. The S&P 500 added 0.1%, while the Nasdaq traded 0.2% higher.

Earnings season day two kicked off with Goldman Sachs delivering a third quarter report that crushed estimates. Goldman reported record earnings of $9.68 per share on $10.78 billion in revenue, compared to analysts’ expectations for earnings per share of $5.57 on revenue of $9.46 billion. The firm’s trading division generated $4.55 billion in revenue, a 29% increase year-over-year, fueled in part by bond trading results of $2.5 billion, nearly half a billion dollars more than analysts expected. “Our ability to serve clients are navigating a very uncertain environment drove strong performance across the franchise, building off a strong first half of the year,” said Goldman CEO David Solomon in the earnings release. Bank of America and Wells Fargo also reported earnings, albeit with less impressive results sending both stocks lower. Bank of America reported earnings per share of $0.51, beating estimates for $0.49, but fell just short of revenue estimates for $20.8 billion reporting $20.45. Wells Fargo reported earnings per share of $0.42 on revenue of $18.86 billion, compared to estimates for earnings per share of $0.45 on revenue of $17.978 billion.

The chances of a stimulus deal happening before next month’s election are looking bleak. On Tuesday, House Speaker Nancy Pelosi said the White House needed to revamp its latest $1.8 trillion offer, and Senate Majority Leader Mitch McConnell pushed a smaller-scale, targeted strategy that Pelosi quickly rejected. Discussing the White House’s offer with CNN yesterday afternoon, Pelosi said that the two sides are “not even close to good” in the stimulus talks, and said of the American people, “I know what their needs are and I listen to them. Their needs are not addressed in the president’s proposal.” Meanwhile, McConnell said the Senate will vote next week on just one provision, replenishing funds for the Paycheck Protection Program for small businesses, which even President Donald Trump seemed to reject, tweeting, “STIMULUS! Go big or go home!!!”

A seven-day average of daily new U.S. coronavirus cases topped 50,000 for the first time in nearly two months on Tuesday, with the U.S. surpassing 7.86 million. With cases continuing to rise higher, Federal Reserve Vice Chairman Richard Clarida said this morning that the U.S. will need another year or more until it gets back to its pre-pandemic levels of activity. Clarida said that policy moves by the Fed and Congress have helped stimulate economic activity like house and car buying, and companies investing in software and equipment, all things that help boost growth. “That said, the COVID-19 recession threw the economy into a very deep hole, and it will take some time, perhaps another year, for the level of GDP to fully recover to its previous 2019 peak,” Clarida said to the Institute of International Finance. “It will likely take even longer than that for the unemployment rate to return to a level consistent with our maximum-employment mandate.”

Apple debuted its new iPhone 12 in a digital event yesterday. The new slate of iPhones feature faster chips, 5G speeds and capabilities, and improved cameras, and come with increased pricing from last year’s models. The most bullish Apple analysts predict a new “super cycle” for the iPhone with the new 5G capabilities of the new models. Analysts estimate that 30% or more of current iPhone owners are using a device that’s at least 3 years old, meaning a lot more people than in most years are feeling the urge to upgrade. “It really comes down to if Apple can exceed the 231 million peak units from 2015,” said Wedbush analyst Dan Ives. “If they can, then this goes into the Cupertino hall of fame as a super cycle. If they can’t, then the disappointment will be reflected in the stock. The only way is to execute on the super cycle.”

And Tesla shares are up this morning after billionaire investor Ron Baron said the company will one day be a $2 trillion business. Baron told CNBC that he sees the electric vehicle maker growing 50% annually in the coming years, and “We’re very excited about that.” “I’ve said for  a long time, I thought it was going to be $1 [trillion] to $2 trillion,” Baron said. “With what developments have taken place recently, I think $2 trillion is the right number. So I think it’s five times from here.” Tesla’s current market cap is $426.59 billion.

Stocks We’re Watching

Vaxart Inc (NASDAQ: VXRT): Vaxart shares popped yesterday after the clinical-stage biotech announced that the first subject in its Phase 1 study of its oral COVID-19 vaccine candidate, VXA-CoV-1, had been dosed. “We are advancing VXA-CoV2-1 into clinical development based on the strength of pre-clinical data that showed that the vaccine is capable of inducing both a robust systemic immune response and a strong mucosal immune response, specifically in the lungs,” said Sean Tucker, Ph.D., chief scientific officer and founder of Vaxart. “We are eager to explore the clinical profile of VXA-CoV2-1 for effective protection against SARS-CoV-2 infection and transmission in healthy adults.”

Trending Ideas

Featured Stocks On The Move

Daily Rundown

Top 3 Stocks in Leading Sectors
  • 3 Energy Storage Stocks To Buy Now

    Bloom Energy Corporation (BE) Bloom Energy Corporation designs and manufactures solid oxide fuel cells for on-site power generation. Their Energy Servers provide reliable, resilient, and sustainable energy solutions for various... Read More

  • 3 Steel Product Stocks To Buy Now

    Perma-Pipe International Holdings, Inc. (PPIH) Perma-Pipe International Holdings, Inc. specializes in engineered piping solutions for various industries, including oil and gas, district heating and cooling, and industrial applications. The company... Read More

  • 3 Oil Field Machinery Stocks To Buy Now

    Matrix Service Company (MTRX) Matrix Service Company provides engineering, fabrication, construction, and maintenance services to energy and industrial markets. The company operates through segments such as Storage and Terminal Solutions,... Read More

  • 3 Restaurant Stocks To Buy Now

    Brinker International, Inc. (EAT) Brinker International, Inc. is a leading casual dining restaurant company, operating well-known brands such as Chili’s Grill & Bar and Maggiano’s Little Italy. The company focuses... Read More

  • 3 Coal Stocks To Buy Now

    Natural Resource Partners L.P. (NRP) Natural Resource Partners L.P. is a master limited partnership that owns, manages, and leases a diversified portfolio of mineral properties in the United States. The... Read More

  • 3 Real Estate Developer Stocks To Buy Now

    IRSA Inversiones y Representaciones Sociedad Anónima (IRS) IRSA Inversiones y Representaciones Sociedad Anónima is a leading real estate company in Argentina, engaged in the acquisition, development, and management of diversified... Read More

  • 3 Gas Distribution Stocks To Buy Now

    New Jersey Resources Corporation (NJR) New Jersey Resources Corporation is an energy services holding company that provides regulated natural gas distribution services through its subsidiary, New Jersey Natural Gas. The... Read More

  • 3 Food Product Stocks To Buy Now

    The Chefs’ Warehouse, Inc. (CHEF) The Chefs’ Warehouse, Inc. is a premier distributor of specialty food products, serving high-end restaurants, hotels, and gourmet food stores across the United States and... Read More

  • 3 HVAC Stocks To Buy Now

    Featured Content Lennox International Inc. (LII) Lennox International Inc. is a global leader in energy-efficient climate control solutions, specializing in heating, ventilation, air conditioning, and refrigeration (HVACR) products. The company... Read More

  • 3 Hotel Stocks To Buy Now

    Featured Content Hyatt Hotels Corporation (H) Hyatt Hotels Corporation operates a global portfolio of luxury, full-service, and lifestyle hotels, as well as vacation properties. Known for its premium hospitality offerings,... Read More

  • 3 Tobacco Stocks To Buy Now

    Featured Content Turning Point Brands, Inc. (TPB) Turning Point Brands, Inc. is a consumer products company that manufactures and markets tobacco products and alternative smoking accessories. The company’s portfolio includes... Read More

  • 3 Life Insurance Stocks To Buy Now

    Featured Content F&G Annuities & Life, Inc. (FG) F&G Annuities & Life, Inc. specializes in annuities and life insurance products designed to meet the long-term financial planning needs of clients.... Read More