Gold rebounds, Johnson & Johnson outperform expectations
Signs that the S&P 500 may be on the verge of bouncing back from its worst decline in five months were evident today as US futures made steady gains. A rebound in gold prices following yesterdays drastic decline and a better than expected earnings report from Coca-Cola also encouraged investors. Most impressive of all though were the gains made by Johnson & Johnson, who announced much improved earnings.
Gold climbed 2.5% after a 9% decline during yesterday’s session. What many have referred to as a “fire sale, en mass” has left analysts without any definitive reason. As with all sharp declines in gold prices, many theories have been offered, ranging from Cyprus selling large chunks of its $750m supply of the precious metal to fund its bank bailouts to plots from the Federal Reserve ensuring the stability of the US dollar. While its cause remains unknown, its rise today can and most likely will be attributed to bargain hunters. With such a rapid decline, seemingly without reason, many have begun to buy in at the lowered price, in hope of a rise of similar size.
Johnson & Johnson saw their profit for the first quarter drop by more than 10% due to a drastically higher amount of acquisitions and legal expenses, which their accounts show as costing some $610m. Analysts had originally predicted that the company would announce profits in the region of 4 cents per share, which they beat by a considerable margin, declaring profits of $1.44 per share. Revenue was up from last years $16.1bn to $17.5bn. At the time of writing, their share price was up 1.79% to 83.17, after peaking at 83.25 — a year long high.
Coca-Cola had a somewhat similar story this morning. Analysts had predicted that they would announce profit at 45 cents per share, which Coca-Cola just beat with their declaration of profit at 46 cents per share for the first quarter as well as better than expected revenue, declaring $11.04bn. Analysts had predicted the company would hit $10.94bn for the quarter.