Before the bell: 5 things to know

Churning out records, financials soar, United Health drops, Walgreens pops

Feeling extra full after our Thanksgiving celebrations – both physically and emotionally. Attempting to wrangle three children to sit down and behave at dinner is no easy feat at the best of times, let alone at the high stakes dining situation at grandma’s house. I am lucky to get 5 minutes of peace before someone either wanders off, exclaims they hate turkey or spills cranberry sauce on a very white carpet.  But this year was different, we got 15 minutes of dare I say…enjoyment. And it only took 7 years!

46^th times a charm: While Canadians were unbuckling the top button of their pants, US markets had a cracker session yesterday. The S&P 500 notched its 46^th all time high of the year, the Dow Jones also closed at a record. The TSX is starting the week from record high position, but we will see if that holds today as oil is under pressure. Oil prices are down about 4% at this writing as the Washington Post is reporting that Israel has agreed to limit its attacks on Iran to military targets rather than oil targets. We’ve got 13 companies reporting on the S&P 500 today, let’s go through some of the big results so far.

Bank on it: Financials are a bright spot this morning. Bank of America shares are up 2% in the pre-market as earnings beat expectations on strong investment banking and trading revenue. Net interest income fell but didn’t fall as much as feared. Shares of Goldman Sachs are popping more than 3% in the pre-market after profit jumped 45% from last year. Looks like traders and investment bankers were the star performers here as well, which has always been core to the Goldman story before its unfortunate foray into consumer lending. Citi is a bit of a messier story. Earnings beat expectations, but sales missed and the bank is flagging higher expenses. Nevertheless, I see the stock a bit higher as the first reaction.

The wrong kind of slimming: United Health shares are falling after trimming the top-end of the profit forecast. As the most influential Dow component, it might be an effective counterweight to Goldman’s rise this morning. While the health insurance giant has done better than peers this year, it almost never reduces its profit forecasts. It is dealing with the expensive fallout from a major hack at one of its divisions but also suffering industry headwinds related to higher patient care spending.

Analgesic: The medicine may finally be kicking in at Walgreens Boots Alliance which has been languishing around the lowest level since 1996. Today it is popping about 5% in the early trade after sales and profit topped expectations. To be clear, profit is half of what it was last year and sales growth was a tepid 6%.  But investors are taking comfort in the beat or perhaps more accurately, shorts getting out of the way. About 13% of the shares outstanding are short. Walgreens announced plans to close 14% of its stores over the next three years. Any casual visitor to America will note this is probably one of the most over-stored retailers in the country with one on every block it seems.

Notable Calls: Etsy is down 4% after Goldman Sach downgraded the online marketplace of cute stuff to sell ahead of earnings.  The analyst warns that with consumers pulling back on spending, Etsy could take a hit. Airbnb is drifting lower after Mark Mahaney at Evercore cut the stock to equivalent of a sell rating in a note that says earnings compounders like Meta are going to dominate the tech trade and leave behind multiple re-rating stories like Airbnb. Bausch and Lomb is getting upgraded at Evercore after reports of private equity interest from TPG and Blackstone. The firm notes a sale would also be great for Bausch Health, which owns 88% of BLCO and could really use the cash.