U.S. equities are declining, struggling to continue the past two week’s positive momentum. The moves come amid a slow day on the economic and earnings fronts, but both are set to heat up as the week progresses. Global Payments bested estimates and reaffirmed its guidance, and Emerson Electric also beat the Street, while also announcing the sale of a majority stake in its climate unit to Blackstone. Meanwhile, a couple of reads on regional manufacturing showed activity continued to contract. Treasury yields are trading higher and the U.S. dollar is gaining ground, continuing to rebound from a recent drop. Gold and crude oil prices are lower. Stocks in Asia were mixed amid a slew of economic data in the region, and Europe ended higher as investors continued to digest last week’s 75 basis point rate hike by the European Central Bank.
At 12:50 a.m. ET, the Dow Jones Industrial Average is down 0.5%, the S&P 500 Index is declining 0.8%, and the Nasdaq Composite is decreasing 1.1%. WTI crude oil is falling $0.1.39 to $86.51 per barrel, and Brent crude oil is losing $1.13 at $92.64 per barrel. The gold spot price is trading $3.40 lower to $1,641.40 per ounce, and the Dollar Index is advancing 0.8% to 111.51.
Global Payments Inc. (GPN $117) reported adjusted Q3 earnings-per-share (EPS) of $2.48, matching the FactSet estimate. Revenues rose 2.9% year-over-year (y/y) to $2.06 billion, topping the Street's forecast of $2.04 billion on the backs of a 10% increase in its merchant solutions segment and a near 16% jump in sales out of its issuer solutions unit. The payment technology company reaffirmed its full-year guidance of revenue growth of between 10% to 11% and adjusted EPS within a range of $9.52 and $9.75. Shares are lower.
Emerson Electric Co. (EMR $87) posted adjusted fiscal Q4 EPS of $1.53, above the anticipated $1.39, with revenues rising 8.3% y/y to $5.36 billion, mostly in line with forecasts. The industrial conglomerate also said it will raise its quarterly dividend by 1.0% to $0.52 per share. Separately, EMR said it will sell a majority stake in its climate technologies business to Blackstone Inc. (BX $92) in a deal valued at $14 billion, including the assumption of debt, giving BX a 55% stake in the unit. EMR is slightly higher, while BX is lower.
Stocks are falling short of adding to last week's sharp rise, with bond yields and the U.S. dollar pulling back a bit. Elevated Treasury yields and the U.S. dollar have added to global economic pressure and are threatening corporate profits as discussed in the latest Schwab Market Perspective: No Stopping the Fed. Meanwhile, Q3 earnings season has hit a higher gear, and Schwab's Chief Investment Strategist Liz Ann Sonders discusses in her article, Earnings: Trampled Under Foot? how the bear market has been driven by multiple compression, making valuations look relatively compelling, but expected weakness in earnings may limit the upside potential for stocks.