Big Morning for Econ Data, Q1 Earnings

Thursday, April 15, 2021

If we’ve been a little sleepy in pre-market accounts of late, it’s finally time to wake up: no fewer than six major economic prints are hitting the tape ahead of today’s opening bell, along with big banks continuing to bring Q1 earnings results to the fore.

Initial Jobless Claims fell by their largest amount since at least last summer, and to new pandemic-era lows: 576K new claims were filed last week, well below the expected 710K and an even more precipitous drop from the previous week’s upwardly revised 769K. That’s nearly 200,000 first-time jobless claims shed over the course of a single week. If you’re looking for signs the U.S. economy has finally been revived, it will be hard to do better than this figure.

Continuing Claims, from a week in arrears, were flat sequentially: 3.73 million was identical to last week’s headline, though that has been revised ever so slightly down to 3.727 million. These jobless claims numbers have always been more orderly than initial claims, as much of the long-term unemployed labor force continues to be absorbed by Pandemic Unemployment Assistance (PUA). But with jobs figures going at their current pace on the initial side, how much longer will we even need PUA?

Advance Retail Sales for March blew the doors off expectations: +9.8% surged past the 6.1% analysts were expecting, trouncing February’s disappointing -3.0%. That said, some “whisper numbers” on the Street were keeping alert for double-digit retail growth last month, but this is in no way a discouraging headline. Ex-autos was a very impressive +8.4%, ex-autos & gas +8.2%. The Control number was +6.9%. These figures suggest firm support for the Retail space at present.

Not only were Clothing sales up 18% last month, but a surprising portion were of the in-store shopping variety, rather than the strictly online retail environment we’ve lived with for the past year. This was followed by 15% growth in Motor Vehicle sales, and 12% for Building Materials — indicating both home improvement and home-building continue to grow more expensive. Gas Stations were up 11% on the month.

The Empire State Manufacturing survey for April came in at 26.3 — the best number since October 2017 — on big increases in manufacturing cost components. This headline easily topped the 20.0 expected and zoomed past the 17.4 reported a month ago. Down the highway a bit, the Philly Fed survey, also for April, blasted past expectations to 50.2. This is slightly down from the previous month’s 51.8, but that was the third-largest Philly Fed number ever reported. We’re still very strong here.

Industrial Production and Capacity Utilization for March are the only set of economic data to disappoint this morning: +1.4% on Industrial Production is notably off the 2.7% expected, while its negative read from February got even worse on revision, from -2.2% originally reported to -2.6%. Utilization rates reached just 74.4% last month, below expectations of 75.7%. The previous month was also revised down from 73.8% to 73.4%.

Citicorp C continues the strong Q1 earnings releases from the big banks on Wall Street: $3.62 per share well outpaced the $2.56 Zacks consensus, and more than tripled the year-over-year number. Revenues of $19.3 billion beat the $18.91 billion expected. This is CEO Jane Fraser’s first earnings report since taking over in late Q1. She appears to be moving quickly to change some things: Citi’s Global Consumer business will be pulling up stakes in big markets like China, India, Russia and elsewhere.

Bank of America BAC also swept past expectations to 86 cents per share in its Q1 earnings report this morning, ahead of the 62-cent estimate. Revenues were also better than expected, at $22.8 billion from $21.9 billion estimated — basically flat year over year. BofA has had a bit of a challenge meeting estimates over the past few quarters, but prior to the pandemic, the bank had not missed on the bottom line in five years.

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