Scout Daily Update: Will The Election Cause Increased Volatility?

STOCK NEWS

Emerson Electric Co. (NYSE:EMR): reported Q4 EPS of $0.96 which beat by $0.06. Revenues were $5.5 billion which was down 5.3% year over year missing estimates by $10 million. The following are the revenues by each segment: Process Management was down 11%, Industrial Automation was down 7%, Network Power was down 2%, Climate Technologies was up 6%, Commercial & Residential Solutions was down 15%.

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CEO David Farr said the following “We expect 2017 to be another challenging year in what has become an unprecedentedly long industrial downturn. Despite these conditions… I firmly believe we have undertaken the right initiatives to position Emerson to deliver.”

Thomson Reuters Corp (NYSE:TRI): reported Q3 EPS of $0.54 which beat estimates by $0.06. Revenues of $2.75 billion were flat and in-line with estimates. The firm is cutting 2,000 jobs and will take a charge of $200-$250 million for restructuring costs. The following are the segment revenues: Financial & Risk was flat at $152 billion, Legal was down 2% at $835 million, Tax & Accounting was up 5% at $323 million, Corporate & Other was down 1% at $73 million.

Cummins Inc. (NYSE:CMI): reported Q3 EPS of $2.02 which beat estimates by $0.06. Revenue of $4.2 billion was down 9.1% year over year which missed estimates by $30 million. The following are segment revenues: Engine was down 12%, Distribution was down 3%, Components was down 8%, Power Systems was down 13%.

CEO Tom Linebarger said the following “Due to the slow pace of growth in the global economy, we continue to face weak demand in a number of our most important markets.”

Valeant Pharmaceuticals Intl Inc (NYSE:VRX): Ex-CEO Michael Pearson and ex-CFO Howard Schiller are in focus for fraud investigation by the U.S. Department of Justice. The fraud case is focused on Valeant’s accounting related to the specialty pharmacy firm Philador. Valeant stock fell 12% on the news as traders panicked. The stock is now up 3.5% today as Valeant investors are pushing back saying this won’t affect the company.

ECONOMIC NEWS

The stock market is focused on the Presidential Election next week. Two weeks ago it looked like Clinton would win by a decent margin as she was up 7 points in the polls. Now Trump has cut the gap to 2 points. When the report of Clinton being investigated by the FBI came out, the market fell less than 1%. It’s tough to say what will happen if Trump wins, but the most likely outcome based on past market responses is a sharp correction followed by a flat period as the market digest what it means.