United Airlines - Earnings
United Airlines reports fifth consecutive quarterly loss while travel demand starts to recover. United Airlines on Monday reported its fifth consecutive quarterly loss, though travel demand has recently improved as Covid-19 vaccinations ramp up and governments loosen travel restrictions. The company posted a $1.36 billion net loss for the first quarter on $3.22 billion in revenue, which fell nearly 60% from the close to $8 billion in sales it generated in the first quarter of 2020. United’s per-share loss on an adjusted basis came in at $7.50, compared with the $7.08 per share loss analysts expected. Here’s how United performed in the first quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv: Adjusted loss per share: $7.50 versus an expected loss of $7.08 a share Total revenue: $3.22 billion versus $3.26 billion expected.
MBA Purchase Applications and MBS
Weekly mortgage demand jumps 8.6% after interest rates fall to a two-month low. Last week was the first overall increase in weekly mortgage applications since the end of February. Applications to refinance a home loan jumped 10% for the week, but were still 23% lower a year ago, the Mortgage Bankers Association said. A sharp drop in mortgage interest rates sent homeowners and potential homebuyers to their mortgage lenders. Total mortgage application volume surged 8.6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. That is the first overall increase in weekly applications since the end of February.
Jobless Claims
First-time claims for unemployment insurance totaled 547,000 last week, below the 603,000 Dow Jones estimate. The total represented a pandemic-era low and was better than the previous week’s 576,000. Continuing claims fell by 34,000 to 3.67 million. ..
The Chicago Fed National Activity Index (CFNAI)
Chicago Fed National Activity Index Climbs to +1.71 in March. Latest Chicago Fed National Activity Index (CFNAI) shows that all four broad categories of indicators used to construct the index made positive contributions in March, and all four improved from February. Led by improvements in indicators related to production and personal consumption and housing, the Chicago Fed National Activity Index (CFNAI) rose to +1.71 in March from -1.20 in February. All four broad categories of indicators used to construct the index made positive contributions in March, and all four categories improved from February. The index’s three-month moving average, CFNAI-MA3, increased to +0.54 in March from +0.07 in February.
Existing Home Sales
U.S. home sales fell to a seven-month low in March, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers. Existing home sales dropped 3.7% to a seasonally adjusted annual rate of 6.01 million units last month, the lowest level since August 2020, the National Association of Realtors said on Thursday. Sales fell in all four regions. Economists polled by Reuters had forecast sales at a rate of 6.19 million units in March. The second straight monthly decline in sales was flagged by a sharp decline in signed contracts and applications for home purchasing loans in February.
Leading Indicators
The index of U.S. leading economic indicators rose 1.3% in March 2021, The Conference Board said Thursday. All 10 components of the index were positive, suggesting economic momentum in the near term. The firm now projects year-over-year economic growth could reach 6% in 2021
The U.S. LEI rose sharply in March, which more than offset February’s slightly negative revised figure, The improvement in the U.S. LEI, with all ten components contributing positively, suggests economic momentum is increasing in the near term. The widespread gains among the leading indicators are supported by an accelerating vaccination campaign, gradual lifting of mobility restrictions, as well as current and expected fiscal stimulus. The recent trend in the U.S. LEI is consistent with the economy picking up in the coming months, and The Conference Board now projects year-over-year growth could reach 6.0 percent in 2021.
PMI Composite Flash
IHS Markit’s “flash” US composite purchasing managers index came in at 62.2 in April 2021 versus 59.7 in March 2021 . April 2021 U.S. PMI composite moves higher, highest since October 2020. Fri, Apr. 23, 2021 for April U.S. PMI Composite Flash: 62.2 vs prior 59.7. Manufacturing PMI: 60.6 vs. 60.5 consensus and prior 59.1. Services PMI: 63.1 vs. 61.9 consensus and prior 60.4. Notably, any reading above 50 suggests improving conditions. IHS Markit said its the “flash” services purchasing managers index rose to a record 63.1 in April 2021 from 60.4 in March 2021. Economists polled by the Wall Street Journal were expecting a 61 reading. Similarly, the flash services purchasing managers index advanced to a record 63.1 in April from 60.4 in the previous month, added IHS Markit, as cited in the MarketWatch article. The firm's “flash” manufacturing purchasing managers index rose to a record 60.6 in April from 59.1 in the previous month. What’s more, the flash manufacturing purchasing managers index rose to a record 60.6 in April from 59.1 last month.
The Composite Purchasing Managers Index rose to a record high of 62.2 in April 2021 from 59.7 in March 2021, according to survey data released Friday. Its “flash” purchasing managers index rose to 63.1 from 60.4 in March, IHS Markit said. Economists polled by the Wall Street Journal expected a 61 reading. The company’s “lightning-fast” manufacturing purchasing management index rose to a record 60.6 in April from 59.1 in the previous month. Economists had expected a reading of 60.5. Any value above 50 indicates the condition is improving.
The flash estimate is usually based on about 85% –90% of the total number of survey responses per month. What happened: Manufacturing output skyrocketed despite unprecedented supply chain disruptions. New orders increased rapidly including from abroad. Input prices are higher and more companies are looking to pass on greater costs to customers. Service sector growth was driven by strong customer demand and the reopening of ore businesses amid easing COVID restrictions. Big picture: The US economy is experiencing boom-like conditions. Atlanta Fed’s GDPNow estimate for real GDP growth in the first quarter was 8.3%. Economists say second-quarter growth could be even better – exceeding the 10% gain.
New Home Sales
Today the Census Bureau reported that in March 2021, new home sales were at a seasonally adjusted annual rate of 1,021,000. This number beats estimates. Additionally, major positive revisions were made to the sales number of the previous months. I expect this month’s headline to be revised lower a tad next month, but even considering that, this report was the best new home sales report in over a decade. The headline number was solid, the revisions were all positive, and the monthly supply on a three-month average is below 4.3 months. New home sales get impacted much more than existing home sales by movements in mortgage rates. Mortgage rates from 4.75% to 5% created a supply spike in 2018. At that time, we worked from the weakest new home sales and housing starts recovery ever, and sales were not high, historically speaking. My forecast for the bond market was that it would fall in 2019, and if world growth slowed down, the 10-year yield would get below 2%. This would drive mortgage rates much lower than the 5% levels of 2018.
Leading Indicators
The Conference Board Leading Economic Index® (LEI) for the U.S. increased 1.3 percent in March to 111.6 (2016 = 100), following a 0.1 percent decrease in February and a 0.5 percent increase in January.
“The U.S. LEI rose sharply in March, which more than offset February’s slightly negative revised figure,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “The improvement in the U.S. LEI, with all ten components contributing positively, suggests economic momentum is increasing in the near term. The widespread gains among the leading indicators are supported by an accelerating vaccination campaign, gradual lifting of mobility restrictions, as well as current and expected fiscal stimulus. The recent trend in the U.S. LEI is consistent with the economy picking up in the coming months, and The Conference Board now projects year-over-year growth could reach 6.0 percent in 2021.” |
