News Brief from AXA Equitable: Highlights from recent notable market news reports
April 29, 2011
The Wall Street Journal noted that results for companies in the S&P 500 index were on track to break the first-quarter record (“Quarter’s Profits Point to a Record,” by Paul Vigna and John Shipman, April 28, 2011). With more than half of the index companies having reported, per-share profit was up 26% over a year ago, The Journal reported.
“The dominant theme has shifted from cost cutting-based margin expansion to a renewed focus on sales growth-driven earnings improvement,” Bank of America Merrill Lynch strategist Savita Subramanian wrote in a report quoted in the article.
Inflation, however, is a concern, driven in part by higher oil prices. The Journal noted that companies have been raising prices. On an earnings conference call April 28, Procter & Gamble said commodity costs were rising rapidly, putting a damper on its earnings growth, according to The Journal, and Wal-Mart said consumers appear to be “running out of money” at a faster pace between paychecks.
A MarketWatch column noted that the average U.S. price of a gallon of gasoline rose about 12 cents over two weeks to $3.88, with crude oil at $112 a barrel, still well shy of the $145 peak in 2008 (“The 9 places where inflation is crushing us,” by Jeff Reeves, April 28, 2011). In fact, rising gasoline prices were cited in a Bloomberg article as a reason for the drop in the weekly Bloomberg Consumer Comfort Index – the first decline in a month (“U.S. Economy: Growth Cooled in First Quarter to 1.8% Rate,” by Timothy R. Homan, April 28, 2011).
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