Q3 Earnings surge, signaling significant market improvement

Earnings of major banks and companies have tended to decide both the market status and sentiment since mid-October, as dozens of companies either already reported of will report their financial statements next week and through early November.

Netflix
In a solid beat, Netflix shares were on the uptrend after the bell on Tuesday’s trading session, a few hours after the company posted Q3 results. The figures bolster the investors’ impression that the company is able to continue to attract new subscribers. The outstanding streamer’s earnings per share is $3.19 vs $2.56. Netflix’s revenue has amounted to $7.48 billion vs $7.48 billion. The number of global paid net subscriber additions has leaped to register 4.4 million vs 3.84 million. The company said it expects to add another 8.5 million subscribers in Q4.

Johnson & Johnson

Johnson & Johnson reported adjusted earnings per share of $2.60 per share, versus expectations of $2.35 per share. The company’s revenue came to $23.34 billion, versus expectations of $23.72 billion. J&J raised its full-year earnings forecast to between $9.77 per share and $9.82 per share, from its previous estimate of $9.60 to $9.70 per share. The company expects sales to range from $94.1 billion to $94.6 billion, up from a previous forecast of $93.8 billion to $94.6 billion.

Procter & Gamble’s

Consumer giant Procter & Gamble’s earnings also posted higher than estimates in Q3 results Tuesday morning, although the shares fell as the company and despite the impact of surging cost of materials and shipping and other rising costs.

In Q3, Procter & Gamble’s earnings per share is $1.61 vs. $1.59 expected while revenues amounted  to $20.34 billion vs. $19.91 billion expected.

Morgan Stanley
Morgan Stanley was among the earnings list that beat estimates. The U. S. Financial company topped expectations for Q3 profit and revenue and posted $1.98 earnings per share vs the estimated $1.68 per share. Morgan Stanley’s revenues amounted to $14.75 billion vs. the $14 billion estimate. Additionally, net income and revenues surged more than 25% compared to 2020, these figures are partly due to the acquisitions of E-Trade and Eaton Vance, which contributed to a bulk up of asset management and wealth divisions, simultaneously shares of the bank rose by 1.5%.

Goldman Sachs
The giant financial group Goldman Sachs announced that its earnings surged to levels higher than expectations, achieving Q3 63% increase this year, vs $5.28 billion estimates. It is worth noting that positive earnings can never hold any company as immune from day-to-day trading fluctuations. To prove this notion, shares of Goldman Sachs Group Inc. GS dropped 0.37% to $412.16 on Tuesday. The stock’s low interrupted three successive days of gains. Goldman Sachs Group Inc. closed $8.60. The group’s revenue increased in the same period by 26% to $13.61 billion, with the investment banking sector’s return increasing by 88% to $3.7 billion.

Bank of America Corp
In stocks, Bank of America Corp. reported earnings and revenue that exceeded Wall Street estimates amid strong growth in its lending and stock-trading units. The bank also benefited from the release of $1.1 billion in reserves that were built up during the pandemic.

Wells Fargo
Wells Fargo’s earnings rose by about 60% in Q3, exceeding market expectations of just 99 cents per share. The net income of the American Financial Group rose 59% to register $ 5.1 billion, with the total return rising up to $ 18.83 billion, higher than Refinitiv’s expectations, which indicated that it could amount to only $ 18.35 billion.

Citigroup
Citigroup announced surging Q3 earnings exceeding market expectations, according to the group’s financial performance report issued Thursday. The earnings of the giant American financial group rose to $2.15 per share, income rose to $17.15 billion, compared to market expectations that stopped at only $1.65 per share.

United Health Group Inc
United Health Group Inc. raised its full-year profit outlook due to robust membership growth in its insurance business from both commercial and Medicare and Medicaid plans.

Factors behind significant results
A number of factors pushed the financial sector’s earnings above market expectations, including the price surge of certain forms of private financial services companies such as mergers, acquisitions, partnerships and other transactions that need the involvement of a big financial group to implement.

Morgan Stanley booked stronger than expected results as its wealth management division added a record amount of assets. Citigroup Inc. earnings and sales outpaced estimates as the release of loan loss reserves and strong equities trading provided a lift.

Market’s Reaction
The nervous trading pattern of current October has impacted the U. S. stocks so far, for example, shares were higher in the past week, with the Nasdaq leading the overall momentum with a 2.2% gain. should the same mood persist, this could depend on earnings of next week.

U. .S. stock indexes surged on Tuesday over positive results from several companies. Earnings have stirred up risk appetite, after big banks had announced third quarter positive earnings last week, with the S&P 500 Index SPX rising 0.74% to 4,519.63 and the Dow Jones Industrial Average DJIA rising 0.56% to 35,457.31.
U.S. shares also surged last Thursday reacting to banks’ strong quarterly results. Dow Jones rose 533 points, or 1.55%, while the S&P 500 index advanced 1.71% to post its best day since March and the Nasdaq Composite index tacked on 1.73% for its best session since May.

Investors are busy digesting the new earnings results that topped Wall Street’s expectations, suggesting more and more companies are able to work through ongoing supply chain challenges and still generate solid profits.