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Jobless Claims Still High but Coming Down, Plus More Q1 Results
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Thursday, April 23, 2020
New Initial Jobless Claims numbers were released before today’s opening bell, and there appears to be something of a good news/bad news scenario, at least if you squint hard enough: 4.427 million new jobless claims were made in the past week, bringing the total of the past 5 weeks of new claims data to north of 26 million workers in the U.S. That’s the bad news. The “good news,” such as it exists, is that we look to be well off the peak of 6.867 million new claims reported on March 29 of this year, hopefully to come down much further in the coming weeks.
Continuing Claims, reported a week behind Initial Claims, spiked to 15.976 million in this latest read, up from 11.916 million from the previous week. This is basically a rate of 9x our long-term average previous to the economic collapse related to measures taken to keep down the spread of the COVID-19 coronavirus, which was historically quite robust. And while we don’t expect these numbers to come down to those previous levels anytime soon, we expect the downward slope of these claims to continue in the right direction.
Re-opening the economy in certain states and certain regions of states demonstrates the hopefulness around bringing these unemployment figures down, as do new bailouts being passed by Congress to help small businesses keep their workforces relatively intact. But these things will take some time. In particular, states whose businesses open their doors too soon risk longer-term coronavirus outbreaks which will beset their economies over a much longer timeline.
Meanwhile, we will suffer through these simply awful numbers. Looked at in a certain way, this is not unlike the coronavirus testing initiatives being bandied about state by state: more testing will result in more confirmed cases, but at least getting a handle on the overall numbers of those infected — and where — will help us recover from the period of mass contagion. Similarly, understanding where our employment weaknesses lie currently will help us understand where most of the assistance in the workforce need to be applied. Simply stated: more information = better solutions.
Q1 Earnings Update
Eli Lilly & Co. (LLY - Free Report) soundly beat expectations on both top and bottom lines in its Q1 earnings report this morning: $1.75 per share beat the Zacks consensus by 20 cents, while $5.86 billion in quarterly revenues outpaced estimates by 6.3%, and easily surpassed the $5.09 billion reported in the year-ago quarter. Shares of Lilly are up roughly 20% year-to-date, including today’s pre-market gains of around 0.8%. For more on LLY’s earnings, click here.
Domino’s Pizza (DPZ - Free Report) soundly beat on its bottom line — $3.07 per share versus $2.29 expected — on $873.1 million in Q1 revenues, which eked out a 0.7% top-line beat. Stocks are selling off roughly 1% on the news, but Domino’s shares had already gained more than 30% year-to-date. For more on DPZ’s earnings, click here.
Rail major Union Pacific (UNP - Free Report) also posted a positive surprise in its Q1 results, with $2.15 per share outpacing the $1.86 expected and the $1.93 reported a year ago. Sales of $5.23 billion were 2.4% above the Zacks consensus, though down from the $5.38 billion reported in Q1 2019. Shares are up close to 5% in today’s pre-market, though still down more than 13% from the first of the year. For more on UNP’s earnings, click here.
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Jobless Claims Still High but Coming Down, Plus More Q1 Results
Thursday, April 23, 2020
New Initial Jobless Claims numbers were released before today’s opening bell, and there appears to be something of a good news/bad news scenario, at least if you squint hard enough: 4.427 million new jobless claims were made in the past week, bringing the total of the past 5 weeks of new claims data to north of 26 million workers in the U.S. That’s the bad news. The “good news,” such as it exists, is that we look to be well off the peak of 6.867 million new claims reported on March 29 of this year, hopefully to come down much further in the coming weeks.
Continuing Claims, reported a week behind Initial Claims, spiked to 15.976 million in this latest read, up from 11.916 million from the previous week. This is basically a rate of 9x our long-term average previous to the economic collapse related to measures taken to keep down the spread of the COVID-19 coronavirus, which was historically quite robust. And while we don’t expect these numbers to come down to those previous levels anytime soon, we expect the downward slope of these claims to continue in the right direction.
Re-opening the economy in certain states and certain regions of states demonstrates the hopefulness around bringing these unemployment figures down, as do new bailouts being passed by Congress to help small businesses keep their workforces relatively intact. But these things will take some time. In particular, states whose businesses open their doors too soon risk longer-term coronavirus outbreaks which will beset their economies over a much longer timeline.
Meanwhile, we will suffer through these simply awful numbers. Looked at in a certain way, this is not unlike the coronavirus testing initiatives being bandied about state by state: more testing will result in more confirmed cases, but at least getting a handle on the overall numbers of those infected — and where — will help us recover from the period of mass contagion. Similarly, understanding where our employment weaknesses lie currently will help us understand where most of the assistance in the workforce need to be applied. Simply stated: more information = better solutions.
Q1 Earnings Update
Eli Lilly & Co. (LLY - Free Report) soundly beat expectations on both top and bottom lines in its Q1 earnings report this morning: $1.75 per share beat the Zacks consensus by 20 cents, while $5.86 billion in quarterly revenues outpaced estimates by 6.3%, and easily surpassed the $5.09 billion reported in the year-ago quarter. Shares of Lilly are up roughly 20% year-to-date, including today’s pre-market gains of around 0.8%. For more on LLY’s earnings, click here.
Domino’s Pizza (DPZ - Free Report) soundly beat on its bottom line — $3.07 per share versus $2.29 expected — on $873.1 million in Q1 revenues, which eked out a 0.7% top-line beat. Stocks are selling off roughly 1% on the news, but Domino’s shares had already gained more than 30% year-to-date. For more on DPZ’s earnings, click here.
Rail major Union Pacific (UNP - Free Report) also posted a positive surprise in its Q1 results, with $2.15 per share outpacing the $1.86 expected and the $1.93 reported a year ago. Sales of $5.23 billion were 2.4% above the Zacks consensus, though down from the $5.38 billion reported in Q1 2019. Shares are up close to 5% in today’s pre-market, though still down more than 13% from the first of the year. For more on UNP’s earnings, click here.
Mark Vickery
Senior Editor
Questions or comments about this article and/or its author? Click here>>
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In this 300-page hardcover, Zacks' Executive VP Kevin Matras reveals almost every stock-picking secret he’s learned from the system that since 1988 has more than doubled the average yearly gain of the S&P 500.
Learn more now >>