US OPEN: Wall Street puts focus on Q3 corporate earnings 💡

• Wall Street in mixed mood at the start of Tuesday's session 
• Investors' attention turns to quarterly results
• Goldman Sachs, UnitedHealth and Bank of America, among others, showed their results

Markets in the US open Tuesday's cash session in a mixed mood. Five minutes after the Wall Street open, the Nasdaq is gaining 0.18%, while the S&P500 is adding 0.08%. Investor attention today is focused on corporate news.

Current volatility observed on Wall Street. Source: xStation 

US100

The Nasdaq-100 index, represented by the US100 contract is trading flat today relative to the close of Monday's trading. However, the index continues to maintain a dynamic uptrend all the time, which with its range oscillates not far from new historical highs. From a technical perspective, it seems that the support set by the 50-day EMA (blue curve on the chart) and the psychological level of $20,000 may be key to sustaining the increases. 

Source: xStation 5

Corporate news

Bank of America (BAC.US) is up about 2% after its Wall Street operations performed better than expected, and the company benefited from market volatility. Net interest income beat analysts' estimates.

BANK'S Q3 RESULTS: 

• Net interest income $13.97 billion, estimates $13.9 billion 
• FICC trading income $2.94 billion, estimate $2.77 billion
• Share trading revenue $2.00 billion, estimate $1.81 billion
• Total wealth and investment management revenue $5.76 billion, estimate $5.63 billion
• Net interest expense income $25.35 billion, estimate $25.27 billion
• Provision for credit losses $1.54 billion, estimate $1.53 billion
• EPS 81c vs. 90c y/y
• Return on average equity 9.44%, estimated 9.01%
• Basel III Tier 1 capital ratio fully implemented, advanced approach 13.5%, estimated 13.5%
• Standard CET1 ratio 11.8%, estimated 11.9%
• Payroll costs $9.92 billion, estimate $9.9 billion
• Investment banking revenues $1.40 billion, estimate $1.24 billion
• Advisory fees $387 million, estimate $341.8 million
• Revenue from debt issuance $780 million, estimate $669 million
• Capital issue proceeds $270 million, estimate $258.4 million
• Net write-downs $1.53 billion, estimate $1.5 billion
• Loans $1.08 trillion, estimate $1.07 trillion
• Total deposits $1.93 trillion, estimate $1.93 trillion
• Efficiency ratio of 65%
• Non-interest expense $16.48 billion, estimate $16.49 billion

Goldman Sachs (GS.US) grows 2%. The bank's profit rose 45% in the third quarter, thanks to a surprising increase in income from stock trading and a resurgent investment banking business.

THIRD QUARTER RESULTS

• Net profit of $12.70 billion, up an estimated $11.77 billion
• FICC sales and trading income $2.96 billion, estimate $2.96 billion
• Global Banking & Markets net income $8.55 billion, +6.8% y/y, estimate $7.65 billion
• Investment banking revenue $1.86 billion, +20% y/y, estimate $1.68 billion
• Revenue from equity sales and trading $3.50 billion, +18% y/y, $2.95 billion estimate
• Advisory revenues $875 million, +5.3% y/y, estimate $757.5 million
• Revenue from equity issuance $385 million, +25% y/y, estimate $359.6 million
• Debt issue proceeds $605 million, +46% y/y, estimate $567.9 million
• EPS of $8.40 vs. $5.47 y/y
• Net interest income $2.62 billion, +70% y/y, estimated $1.84 billion
• Platform Solutions pre-tax loss $559 million, estimated loss $302.7 million
• Total deposits $445 billion, +2.8% q/q.
• Provision for credit losses $397 million vs. $7 million y/y, estimate $411.9 million
• Total operating expenses $8.32 billion, -8.2% y/y, estimate $8.11 billion
• Payroll costs $4.12 billion, -1.6% y/y, estimate $3.89 billion
• Annual ROE +10.4%, estimated +8.73%
• Return on equity +11.1%, estimated +9.44%
• Standard CET1 ratio 14.6%, estimated 14.7%
• Book value per share $332.96, compared with $313.83 y/y
• Efficiency ratio 65.5%, estimated 68.5%
• Assets under management $3.10 trillion, +16% y/y, $2.99 trillion estimate

UnitedHealth (UNH.US) is down 9% after the company lowered the top end of its forecast, a rare move for an insurance giant that has often withstood pressures that hurt its competitors.

ANNUAL FORECAST

Adjusted earnings per share forecast $27.50 to $27.75, previously estimated at $27.50 to $28, estimated at $27.68 

Q3 RESULTS

• Adjusted earnings per share $7.15 vs. $6.56 y/y, estimated $6.99
• EPS $6.51 vs. $6.24 y/y
• Revenue $100.82 billion, +9.2% y/y, estimated $99.16 billion
• UnitedHealthcare segment revenue $74.9 billion, +7.2% y/y, estimated $73.65 billion
• Optum revenues $63.9 billion, +13% y/y
• OptumRx revenues $34.21 billion, +19% y/y, estimated $32.21 billion
• OptumHealth revenues $25.92 billion, +8.6% y/y, $27.48 billion estimate
• OptumInsight revenue $4.93 billion, -0.9% y/y, $4.99 billion estimate
• Medical care ratio 85.2% vs. 82.3% y/y, estimated 84.4%
• Operating expense ratio 13.2% vs. 15% y/y, estimate 13.5%

ANALYSTS' RECOMMENDATION

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