Initial Claims at Record Low Level

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Well, it finally happened: weekly Initial Jobless Claims finally broke beneath the psychologically important 200K level, to 199K last week. This is a drop of 13K claims from the previous week, which totaled a downwardly revised 212K.

We had predicted this would happen back in late summer of last year, when initial claims dwindled week over week down to the low 200s, but we never pushed below that until now. This headline number comes as somewhat of a surprise, as jobless claims had been a bit more volatile in recent weeks.

Continuing Claims also crashed on the week - down 24K to 1.713 million. This is not the lowest we've seen on this side of the claims data; we had been below 1.7 million for a couple weeks there in the latter section of 2018. But this also represents historical lows - in particular, jobless claims are the lowest we've seen since November of 1969, nearly 50 years ago.

If we're seeing anything reflected on the partial U.S. government shutdown (now in its fifth week), it's not apparent this morning. Perhaps some of the 800K federal employees (plus private-sector service workers reliant on federal offices being open) who've gone without a paycheck - with another payday set to go unfulfilled tomorrow - have found employment elsewhere, but these numbers do not expressly state anything like this. Although economists do caution that an extended shutdown will eventually create atrophy in the economy, suggesting we may be seeing peak employment right this very moment.

Q4 "High Flyers" & More

After today's closing bell, we expect to see a slew o f earnings reports from microtechnology companies like Intel INTC , which take on added importance following the warnings from Apple AAPL a couple weeks ago. For this morning, however, earnings reports look a little airline-heavy. The following companies were all rated Zacks Rank #2 (Buy) prior to their Q4 releases:

American Airlines AAL put up a mildly mixed report, beating estimates on the bottom line by 2 cents to $1.04 per share (as opposed to 95 cents in the year-ago quarter) while missing on revenues very slightly, to $10.94 billion. Revenue beats are not really a strength for American - the company has only posted a positive surprise on the top line once in the past 4 quarters.

The airline major, which also carried a Zacks Style Score (Value - Growth - Momentum) of B before the earnings release, appears to b e forgiven for this revenue miss in today's pre-market. Shares are trading up 5.8% at this hour.

Southwest LUV outperformed expectations on both top and bottom lines for its Q4: $1.17 per share easily topped the $1.06 Zacks consensus, and well ahead of last year's 77 cents per share in the same quarter. Revenues of $5.70 billion in the quarter beat estimates by roughly half a percentage point. Southwest, which had already earned 9.8% year to date, is up again 5.66% at this hour in the pre-market.

Discount airline JetBlue JBLU ) also beat Zacks consensus estimates on both sales and earnings: 50 cents per share surpassed the 42 cents expected, while revenues of $1.97 billion barely eked out a positive surprise of 0.13%. Shares have enjoyed a bid up year to date, +7.4%, but are yielding a tad following this Q4 report in early trading.

Elsewhere in Transportation, Union Pacific UNP ) posted $2.12 per share on revenues of $5.76 billion for its Q4 report, an improvement over $2.06 anticipated on the bottom line and +0.66% on the top. Year over year, the railway giant has grown earnings impressively, from $1.53 per share in the year-ago quarter. Shares are already up double digits to start 2019, and are climbing another 3.6% at this hour.

And Freeport-McMoRan FCX ), a mining giant carrying a Zacks Rank #5 (Strong Sell), has missed its quarterly earnings target by nearly 50% to 11 cents per share, well off the year-ago tally of 51 cents. Revenues of $3.68 billion was off more than 4% from expectations, and off the $5.04 billion the company brought in for Q4 2017. That said, shares had been up 19% year to date, but the company has so far given back 6.7% in today's pre-market.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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