The automotive sector may continue to gain momentum after General Motors (GM) shares gained 9.81% on Tuesday.
GM earned $2.96 a share after revenue rose by 10.5% Y/Y to $48.76. The EPS benefited from a stock repurchase program worth $1 billion. The company retired 23 million shares in that count, cutting the diluted share count to 1.12 billion, down by 19% Y/Y.
Philip Morris (PM) might pull back today in the tobacco sector. PM stock gained 10.47% yesterday after posting revenue of $9.91 billion, up by 8.4% Y/Y. The company is forecasting FY 2024 EPS guidance of up to $6.91. This is around $0.50 above the consensus estimate.
Investors should accumulate PM stock. Speculation that demand for tobacco would fall is greatly exaggerated. The firm managed to grow revenue by nearly 10% in the quarter. As it replaces lethal smoking products with non-lethal HNB (heat-not-burn) devices and pouches, profits will expand.
The strong performance in stocks will not be enough to offset the increasing bearishness in the index. For the first time since September, the S&P 500 (SPY) closed down for two straight days. The relentless buying may prove too good to be true. It does not leave the market with much room for disappointment.