We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Q1 GDP 1.1% Lower than Expected; Jobless Claims Down
Read MoreHide Full Article
Thursday, April 27th, 2023
We see a first print on Q1 Gross Domestic Product (GDP) this morning, with the headline coming in almost half of what was expected: +1.1% versus +2.0% expected. This is the lightest read since we were negative in Q2 2022, and notably down from the final +2.6% GDP from Q4. Consumption (consumer spending) came in at a robust +3.7%, the best level since Q2 2021.
On the Price Index side of this report, we’re seeing trend reversals in Q1: +4% headline is above the +3.7% expected and the +3.9% posted in Q4. Quarter over quarter, we jumped up to +4.9% from +4.4% last time around, and the highest print since the +5.6% we saw in Q1 of last year. Cycle highs here were around +9%, so we’re thankfully off those. However, ticking up quarter over quarter rather than ticking down is not the direction we want, and will do nothing but confirm the Fed’s belief that another quarter-point interest rate hike is in the offing next week.
Initial Jobless Claims reduced from both expectations and our newly found range near 250K claims per week: 230K last week is decidedly down — better for the ever-resilient labor market. The previous week was upwardly revised slightly to 246K, but today’s print brings us back down to the low end of the range we’ve seen since the first week in March. (Just a few weeks ago, Weekly Jobless Claims were recalibrated to more fully assess the jobless situation in this country.)
Continuing Claims also came in slightly below estimates: 1.858 million is down a smidge from the previous week’s 1.861 million — still at cycle highs going back 12 weeks, but comfortably below the psychologically pleasing 2 million per week. In fact, we haven’t seen longer-term jobless claims at this elevated of a level since November 2021.
In earnings news, Caterpillar (CAT - Free Report) beat estimates on both earnings and sales by +29.6% and +4.1%, respectively: earnings of $4.91 per share easily outpaced the $3.79 Zacks consensus, on revenues of $15.89 billion in the quarter. Zacks Rank #2 (Buy)-rated American Airlines (AAL - Free Report) swung to positive earnings from year-ago quarter levels and beat by a penny — 5 cents per share versus 4 cents — while revenues were a hair light of estimates at $12.19 billion in the quarter. Rival airline Southwest (LUV - Free Report) missed on its bottom line: -27 cents per share versus -21 cents expected, with $5.71 billion in sales moderately short of the Zacks consensus.
After today’s open, New Home Sales for March will be hitting the tape. After today’s close, Amazon (AMZN - Free Report) leads the charge of another busy afternoon of earnings reports. Pre-market futures are up at this hour: the Dow is +170 points, the S&P 500 +24 and the Nasdaq +144 points. With any luck, we’ll be able to hang onto these gains throughout the course of the trading day.
Image: Bigstock
Q1 GDP 1.1% Lower than Expected; Jobless Claims Down
Thursday, April 27th, 2023
We see a first print on Q1 Gross Domestic Product (GDP) this morning, with the headline coming in almost half of what was expected: +1.1% versus +2.0% expected. This is the lightest read since we were negative in Q2 2022, and notably down from the final +2.6% GDP from Q4. Consumption (consumer spending) came in at a robust +3.7%, the best level since Q2 2021.
On the Price Index side of this report, we’re seeing trend reversals in Q1: +4% headline is above the +3.7% expected and the +3.9% posted in Q4. Quarter over quarter, we jumped up to +4.9% from +4.4% last time around, and the highest print since the +5.6% we saw in Q1 of last year. Cycle highs here were around +9%, so we’re thankfully off those. However, ticking up quarter over quarter rather than ticking down is not the direction we want, and will do nothing but confirm the Fed’s belief that another quarter-point interest rate hike is in the offing next week.
Initial Jobless Claims reduced from both expectations and our newly found range near 250K claims per week: 230K last week is decidedly down — better for the ever-resilient labor market. The previous week was upwardly revised slightly to 246K, but today’s print brings us back down to the low end of the range we’ve seen since the first week in March. (Just a few weeks ago, Weekly Jobless Claims were recalibrated to more fully assess the jobless situation in this country.)
Continuing Claims also came in slightly below estimates: 1.858 million is down a smidge from the previous week’s 1.861 million — still at cycle highs going back 12 weeks, but comfortably below the psychologically pleasing 2 million per week. In fact, we haven’t seen longer-term jobless claims at this elevated of a level since November 2021.
In earnings news, Caterpillar (CAT - Free Report) beat estimates on both earnings and sales by +29.6% and +4.1%, respectively: earnings of $4.91 per share easily outpaced the $3.79 Zacks consensus, on revenues of $15.89 billion in the quarter. Zacks Rank #2 (Buy)-rated American Airlines (AAL - Free Report) swung to positive earnings from year-ago quarter levels and beat by a penny — 5 cents per share versus 4 cents — while revenues were a hair light of estimates at $12.19 billion in the quarter. Rival airline Southwest (LUV - Free Report) missed on its bottom line: -27 cents per share versus -21 cents expected, with $5.71 billion in sales moderately short of the Zacks consensus.
After today’s open, New Home Sales for March will be hitting the tape. After today’s close, Amazon (AMZN - Free Report) leads the charge of another busy afternoon of earnings reports. Pre-market futures are up at this hour: the Dow is +170 points, the S&P 500 +24 and the Nasdaq +144 points. With any luck, we’ll be able to hang onto these gains throughout the course of the trading day.
For more on CAT's earnings, click here.
For more on AAL's earnings, click here.
For more on LUV's earnings, click here.
Questions or comments about this article and/or its author? Click here>>