US Stocks appreciated in the first half of November fueled by trade optimism and strong earnings posted by most companies. According to FactSet, by November 15, 92% of companies in the S&P 500 had reported their third-quarter results and 75% of these had managed to beat earnings estimates, while 60% of companies had posted better-than-expected revenues. FactSet noted that the percentage of companies that surpassed top and bottom-line estimates are above five-year averages.
The month started with some mixed economic data. October non-farm payrolls showed the US economy having added 128,000 jobs, versus the consensus estimate of 89,000, while the September figure was revised to 180,000 from 136,000. The unemployment rate ticked to 3.6% from 3.5% in September but was in line with expectations.
At the same time, construction spending increased by 0.5% in September. On the other hand, the ISM manufacturing index remained in the contraction zone at 48.3, versus a consensus estimate of 49.3, while the US PMI manufacturing index of 51.3 fell short of expectations of 51.5.
Trade with China continued to dominate headlines, as both US and Chinese officials said that the phase-one deal is almost completed and reports suggested that it will also include a rollback on tariffs. However, it’s unclear when the deal will be signed, with reports suggesting that President Trump and Xi Jinping won’t meet until December.
Nonetheless, trade optimism was also reflected in companies’ financial reports. FactSet pointed out that 13% fewer companies mentioned tariffs during their earnings calls. Overall, 113 companies that had reported their results by November 14 mentioned the term “tariff” during the call with investors and analysts.
Amid all these developments, in the first half of November, the Dow Jones Industrial Average was the top gainer among the three major stock indices, having appreciated by 2.40%. NASDAQ Composite and S&P 500 are trailing slightly behind with growth of 1.84% and 1.75%, respectively.
In the meantime, there were a number of companies that got in Financial Advisors’ spotlight in the first two weeks of November. TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, analyzed the data on most searched tickers. On the first spot in their list is Apple Inc. (NASDAQ: AAPL). After delivering a stellar fiscal fourth-quarter print and unveiling a new iPhone, Apple continued to ride the wave as most analysts suggest strong demand.
Another company that captured the attention of Financial Advisors is The Walt Disney Company (NYSE: DIS), followed by Amazon.com, Inc. (NASDAQ: AMZN), General Electric Company (NYSE: GE), and The Boeing Company (NYSE: BA), whose problems seem far from over after a number of 737 NG jets were grounded after inspections found structural cracks.
In this article, let’s take a closer look at The Walt Disney Company (NYSE: DIS), which was the top performer among the five most searched tickers in the first half of November, having gained over 11%. Overall, since the beginning of the year, the stock is 14% in the green.
There are two main catalysts that helped Disney’s shares in the last two weeks. On November 7, the company reported its financial results for the fiscal fourth quarter. The GAAP EPS of $0.43 was much lower than the expected $0.77, but the non-GAAP EPS of $1.07 was $0.10 higher than the consensus estimate and the revenue of $19.1 billion surged by 33.5% on the year and beat the estimates by $80 million. The growth was driven by Media Networks, Studio Entertainment, and Direct-to-Consumer and International sales.
Another factor that contributed to The Walt Disney Company’s value appreciation is the launch of its streaming service, Disney+, in the US, Canada, and the Netherlands. The company joined the ranks of streaming giants like HBO, Apple TV Plus, Netflix and Amazon Prime Video. The highly anticipated launch was a bit rough considering that many users were not able to view content on the first day. Nevertheless, it was a huge success for the company as it saw 10 million subscribers on the day after the launch, a figure that the Street expected only by the end of the year.
Following the update, several analysts boosted their price targets on the stock. Among them, Credit Suisse, which raised the target to $163 from $150, and JPMorgan, which increased its target to $160 from $150. However, analysts remain cautious as there is still uncertainty regarding user.
The Walt Disney Company offered a free year trial to Verizon customers and the Street is waiting to see how many of these customers will continue to use the service and pay for it.Disney expects to reach 90 million subscribers in five years, much more modest than its rival Netflix’s target of 300 million. Netflix currently has 60 million subscribers in the US and more than 97 million international users.