The busy earnings season kicks off in earnest this week — and investors already have plenty to celebrate.
Reassuring investors: the ongoing strength of the American consumer. JPMorgan Chase generated solid gains in deposits and an increase in revenue from auto loans and other consumer products. It also helps that banks have a clearer picture on interest rates moving forward.
“The US consumer remains in very strong shape,” JPMorgan CFO Jennifer Piepszak told analysts Tuesday. Though business spending remains “a bit soft,” sentiment is “certainly better” than it was six months ago, she added.
UBS on Wednesday said it had raised its expectations for US earnings growth this year. The Swiss bank thinks results will better reflect the strength of the American economy following a relative disconnect in 2019, pushing stocks higher.
“We see the upcoming reporting season marking a turning point after a period of weak profit growth for US companies,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
The US and China will sign a trade deal. But what’s in it?
The public absence of the text, estimated to be more than 80 pages long, opens up the door to a “knee-jerk” response by markets “if the final details from the signed deal underwhelm investors,” Han Tan, market analyst at FXTM, a currency broker, told clients Wednesday. Optimism, Tan noted, is “largely priced in.”
What we have: US and Chinese officials have repeatedly described the agreement in sweeping terms, citing promises by Beijing to go beyond prior commitments made on intellectual property theft and forcing US companies to hand over their technology, as well as a pledge from China to buy $200 billion in farm goods and other products made by the US over a two-year period.
The missing details of the deal have left a host of questions: Exactly what commitments did China make? How will the deal be enforced? When will it take effect? Will China change its laws? And how will either country determine if the other failed to comply with the terms?
What is clear: Despite an apparent truce, the fight between United States and China isn’t over yet.
Airbus has stolen Boeing’s throne
Boeing, which reported final order numbers and deliveries for 2019 on Tuesday, reported more cancellations than new business in 2019. Orders for the year tumbled 74% to 243, while deliveries dropped 53% to 380.
That put Boeing far behind its European rival. Last week, Airbus reported record deliveries of 863 jets, up 8%. Orders grew by 2% to 768.
My CNN Business colleague Chris Isidore points out that Boeing had a particularly strong year in 2018 and it would have likely seen a slowdown in orders even without problems for the 737 Max plane, which was grounded following two crashes that killed 346 people. But the numbers also highlight the challenge facing Boeing once the Max gets approval to fly again.
Coming tomorrow: US retails sales for a busy December.