Q1 Earnings, 10-Year Yield Heating Up

Mark Vickery

Updated 23 April 2018 at 10:26 am

Zacks.com featured highlights include: Twitter, Lockheed Martin, Intercontinental Exchange, CBRE and Keurig Dr Pepper

Monday, April 23, 2018

After a prolonged period of 10-year bond yields relatively stagnant in the 2.8s earlier this year — while equity markets were setting a wild roller coaster in motion — we now see the 10-year peek its head up near 3% for the first time since the end of 2013. At 2.966%, market participants are beginning to pay close attention here, with a ratcheted-up bond yield signifying things like increased economic inflation, which would likely prompt the Fed to raise interest rates higher, faster.

Also of interest, not of actual concern just yet, to the market is the tight spread between the 10-year bond yield and the 2-year, which is currently the lowest it’s been since 2007 — which is an important benchmark historically, as it came the year Bear Stearns crumbled and ahead of the economic meltdown of 2008 which led to the Great Recession. An inversion of the yield curve — when the 2-year yield pays out more than the 10-year — is a signifier to economists that another recession may be on the way.

To be clear, we’re not seeing that inversion currently. We’re not even seeing a 3% bond yield in the 10-year, which itself is still historically low. But taking into context the Goldilocks economy we’ve been enjoying the past several years — with increased traction in employment growth and a new tax windfall for corporations in 2018 — that we may be emerging into pricier territory (and, by the way, CNBC’s Steve Liesman reports this morning the odds of a fourth rate hike this year has recently blossomed to 30%) may jostle equities indexes in a manner 2018 had already begun to grow accustomed to.

Otherwise, the big news this week continues to be Q1 earnings season, which really hits the accelerator with Alphabet GOOGL reporting after the bell today, along with Caterpillar CAT, Verizon VZ, Amazon AMZN, Intel INTC and Exxon XOM, among others later this week. As Zacks Director of Research Sheraz Mian points out in his latest Earnings Preview, by the end of this week we’ll be more than halfway through the S&P 500’s quarterly earnings: Positive Revenue Surprises Lag Previous Quarter Levels

Ahead of the opening bell today, oilfield services major Halliburton HAL met estimates on its bottom line at 41 cents per share, while posting a revenue number a smidge below the Zacks consensus to 5.74 billion. Operating income for Halliburton was up big year over year, but still below what analysts had been expecting. For more on HAL’s earnings, click here.

Partly due to the bankruptcy of Toys R Us stores in the Q1 this year, toy-making giant Hasbro HAS missed earnings and sales estimates by a wide margin: 10 cents per share versus 31 cents expected, on $716 million in revenues that was far below the Zacks consensus $825 million. Hasbro shares are down another 4.5% in today’s pre-market, and precipitously off the $115+ share price from last summer. For more on HAS’s earnings, click here.

Here’s a Q1 earnings beat this morning: Zacks Rank #3 (Hold)-rated Alaska Air Group ALK, whose 14 cents per share beat consensus by 3 cents, and revenues in the quarter marginally topped expectations to $1,831 million. This top line number is also favorable from the $1,749 million in the year-ago quarter. The regional airline saw solid metrics offset somewhat by a 20% rise in jet fuel costs. For more on ALK’s earnings, click here.

Mark Vickery
Senior Editor

Questions or comments about this article and/or its author? Click here>>

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

Evening Standard
'Misstiano Penaldo': John Terry brands BBC 'a disgrace' for dig at crying Cristiano Ronaldo over penalty miss
BBC coverage of the Euro 2024 did not go down well with the former Chelsea captain
HuffPost
Reporter Reveals 'Real Anger' From Biden White House Aides After Debate
They were "shocked" and felt "they had not been told the truth," said Axios' Alex Thompson.
Bloomberg
China’s AI startups head to Singapore in a bid for global growth
When Wu Cunsong and Chen Binghui founded their artificial intelligence startup two years ago in Hangzhou, China, they quickly ran into obstacles, including dearth of venture capital.
The Independent
Seven people - including four kids - shot by neighbor who once told them to ‘go back to where they came from’
Motive still being investigated, but shooting ‘could’ have racial element, police say
INSIDER
Malaysia's $100 billion ghost town is good for at least one thing: filming documentaries and shows like Netflix's 'The Mole'
Embattled Forest City is a backdrop for a handful of reality shows and documentaries.
The Independent
Bodycam footage released after 13-year-old boy shot and killed by police in New York
Body camera footage released by the department shows officers tackling the boy to the ground before firing a gun
INSIDER
A millennial couple moved to Bali 2 years ago. Making friends was one of the hardest parts.
There's a common refrain that things in Bali are cheap — and that's not necessarily true, they said.
People
'Very Sweet Young Lady' Is Killed on Her 21st Birthday, Suspect in Custody
Joselyn Toaquiza was reported missing on Wednesday, June 19, the day after she turned 21, before police learned she'd been killed the day before
Bloomberg
Russian goods find their way to Singapore as war fatigue sets in
Heavily discounted Russian-made goods, from hair products to chocolate, are finding their way onto Singapore’s virtual supermarket shelves.
The Hill
70 percent of voters have decided who they will back in November: Poll
More than 7 in 10 voters have already decided whom they will vote for in the November presidential election, according to a new poll. The Harvard CAPS/Harris poll released Monday showed 72 percent of respondents said they have already made up their minds, while 28 percent said they are still weighing their choices. That’s a…
Evening Standard
England have already been dealt huge selection blow for Switzerland quarter-final clash at Euro 2024
Gareth Southgate will be forced into Three Lions reshuffle for last-eight showdown in Dusseldorf
HuffPost
Harvard Law Professor Delivers Chilling Prediction After Trump Immunity Ruling
Laurence Tribe explained what the Supreme Court decision means in "practical purposes" and it's "devastating."
The Independent
Prostitute is fatally strangled then sexually assaulted inside Las Vegas casino by man who said he ‘snapped’
Jason Kendall, 35, is being held without bond in connection to the murder of Larissa Garcia at a Las Vegas casino
DollarsAndSense.sg
22 Useful Items You Can Buy From The SAF eMart – That You Can Use In Your Civilian Life
Lifelong buddies, service to Singapore, personal development – the best things in NS life are priceless. For everything else, there’s the eMart. The post 22 Useful Items You Can Buy From The SAF eMart – That You Can Use In Your Civilian Life appeared first on DollarsAndSense.sg.
The Telegraph
Russia ‘studying captured ATACMS’
Russian forces have captured and are studying an intact guidance system from a long-range US-made ATACMS missile, according to reports.
The Independent
‘A terrible disservice’: Biden slams Supreme Court immunity ruling, says it lets presidents ignore the law
President Joe Biden did not take questions after speaking on the Supreme Court ruling, despite questions swirling after his debate performance
SETHLUI.COM
11 best affordable Korean food spots in Singapore your wallet & tummy will love
The post 11 best affordable Korean food spots in Singapore your wallet & tummy will love appeared first on SETHLUI.com.
People
Megan Thee Stallion Shocks in Latex Thong Bodysuit and Boots on Stage at 2024 BET Awards: See Her Daring Look!
The rapper commanded the stage with her voice and sexy style
Simply Wall St.
3 SGX Stocks That May Be Trading Below Their Estimated Intrinsic Value By Up To 47.2%
As the Singapore market shows signs of robust activity, with innovative companies like Currensea successfully raising significant funds through crowdfunding, it highlights a growing investor confidence and interest in diverse sectors. In this context, identifying stocks that are potentially trading below their intrinsic value could offer attractive opportunities for investors looking to capitalize on current market conditions.
INSIDER
Estonia says it could hold out against a Russian attack 'for a couple of weeks' before NATO arrives
Estonia has ramped up its defense spending and believes it could hold out for a couple of weeks before reinforcements came, if Russia attacked.

Straits Times Index

S&P 500

Dow

Nasdaq

Bitcoin USD

CMC Crypto 200

FTSE 100

Gold

Crude Oil

10-Yr Bond

Nikkei

Hang Seng

FTSE Bursa Malaysia

Jakarta Composite Index

PSE Index

Q1 Earnings, 10-Year Yield Heating Up

Latest stories

'Misstiano Penaldo': John Terry brands BBC 'a disgrace' for dig at crying Cristiano Ronaldo over penalty miss

Reporter Reveals 'Real Anger' From Biden White House Aides After Debate

China’s AI startups head to Singapore in a bid for global growth

Seven people - including four kids - shot by neighbor who once told them to ‘go back to where they came from’

Malaysia's $100 billion ghost town is good for at least one thing: filming documentaries and shows like Netflix's 'The Mole'

Bodycam footage released after 13-year-old boy shot and killed by police in New York

A millennial couple moved to Bali 2 years ago. Making friends was one of the hardest parts.

'Very Sweet Young Lady' Is Killed on Her 21st Birthday, Suspect in Custody

Russian goods find their way to Singapore as war fatigue sets in

70 percent of voters have decided who they will back in November: Poll

England have already been dealt huge selection blow for Switzerland quarter-final clash at Euro 2024

Harvard Law Professor Delivers Chilling Prediction After Trump Immunity Ruling

Prostitute is fatally strangled then sexually assaulted inside Las Vegas casino by man who said he ‘snapped’

22 Useful Items You Can Buy From The SAF eMart – That You Can Use In Your Civilian Life

Russia ‘studying captured ATACMS’

‘A terrible disservice’: Biden slams Supreme Court immunity ruling, says it lets presidents ignore the law

11 best affordable Korean food spots in Singapore your wallet & tummy will love

Megan Thee Stallion Shocks in Latex Thong Bodysuit and Boots on Stage at 2024 BET Awards: See Her Daring Look!

3 SGX Stocks That May Be Trading Below Their Estimated Intrinsic Value By Up To 47.2%

Estonia says it could hold out against a Russian attack 'for a couple of weeks' before NATO arrives