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U.S. markets opened lower today, with pressure on financial stocks. That followed Tuesday's news that President-elect Donald Trump's pro-growth policies (especially corporate tax reform) might not go as smoothly post-inauguration as had been previously projected.
Earnings continue to be the current major catalyst for stocks, and earnings are moving our three stocks to watch today...
Stocks to Watch Today: Citigroup Inc. (NYSE: C)
Citigroup stock slipped 0.5% to $58.12 in morning trading on mixed Q4 2016 results. The NY-based bank beat earnings per share (EPS) estimates but came up short on revenue.
Citi posted Q4 2016 EPS of $1.14 on revenue of $17.01 billion. Analysts were looking for EPS of $1.12 on revenue of $17.26 billion.
Trading revenue, which was expected to be robust given increased market volatility, was $3.26 billion. That missed analysts' expectations of $3.44 billion. Fixed-income revenue also came up short at $2.21 billion versus the $2.83 billion expected.
Financial stocks, including Citi, have pulled back this week. Yet the sector remains the best performer in the S&P 500 since the U.S. presidential election with gains of more than 17.5%. Citi shares are up nearly 17% over that time.
Citi shares are down 2.27% year to date.
Stocks to Watch Today: Goldman Sachs Group Inc. (NYSE: GS)
Goldman Sachs stock was little changed at $235.16 today, despite reporting Q4 results that easily beat expectations.
The New York-headquartered global firm posted a profit of $2.35 billion, or $5.08 a share. That compares with $1.27 a share in the same quarter a year ago, when the firm reached a $5 billion settlement with the Department of Justice over mortgage-bond practices.
Goldman's revenue grew 12% to $8.17 billion from $7.27 billion a year earlier. Analysts had expected Goldman to earn $4.82 a share on revenue of $7.72 billion.
Three of its four major business lines reported higher revenue than in 2015.
Goldman gets the bulk of its revenue from its securities business, where it buys and sells stocks, bonds, currencies, and other assets for clients. That business typically accounts for half of Goldman's revenue, although large capital charges diminish its contributions to earnings.
Revenue in the securities business rose 25% to $3.6 billion from $2.88 billion last year. Stock trading revenue fell 9.2% to $1.59 billion from $1.76 billion in the year-earlier quarter, while fees from fixed-income trading, which includes bonds, commodities, and currencies, rose 78% to $2 billion from $1.12 billion the year before.
Goldman shares are up 30% since Election Day. GS stock has been a major driver of the Dow's run toward 20,000 due to its heavy weighting on the blue-chip benchmark.
Stocks to Watch Today: Target Corp. (NYSE: TGT)
Shares of discount retailer Target Corp. sank 5.09% to $67.38 in early trading after the company issued a profit warning on soft holiday sales.
Same-stores sales declined 1.3% during the crucial November and December holiday period.
Target now projects Q4 2016 comparable sales to decline between 1% and 1.5%, compared with prior guidance of between down 1% and up 1%. Adjusted EPS are projected between $1.45 and $1.55 a share, compared with prior guidance of $1.55 to $1.75 a share.
For the full year, Target now expects to report adjusted earnings of $5 to $5.10 a share, compared with prior guidance of $5.10 to $5.30 a share.
Target will release its full Q4 2016 results on Feb. 22 before the open.
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- MarketWatch: Target Issues Profit Warning on Weak Holiday Sales
- CNBC: Goldman Sachs Earnings: $5.08 a Share vs. $4.82 Estimate
- Business Insider: Citi Beats on the Bottom Line, Misses on the Top