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Jobless Claims 553K, Q1 GDP 6.4%: Great Reopening Moves Forward
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Thursday, April 29, 2021
We kick off another trading day, basically in the heart of Q1 earnings season, with a couple key economic metrics for both the past week and past quarter. New jobless claims have buoyed a bit from last week’s release, but are nevertheless re-establishing post-pandemic lows. Meanwhile, the first look at Q1 Gross Domestic Product (GDP) came in hot… only not quite as hot as the “whisper numbers” were looking for.
First, Initial Jobless Claims: for the second week in a row, these weekly unemployment reads have set new lows since the pandemic effect took hold: 553K. However, this is because the previous week’s 547K — the previous pandemic low — was revised upward rather significantly to 566K. Still, after seven straight weeks averaging more than 700K new claims per week, this is the third straight week where we fell all the way through the 600Ks to a 5-handle on claims.
Continuing Claims have bumped up a bit from last week’s pandemic-low read, downwardly revised to 3.65 million, to 3.66 million in this latest print (a week in arrears from Initial Claims). Plenty of these longer-term unemployed are being sopped up by Pandemic Unemployment Assistance (PUA), which is a program that remains on the books for the time being. Overall, we’re still down roughly 8.5 million American jobs from February 2020 levels.
The first read on Q1 GDP came in at 6.4% — the highest quarterly total in nearly 18 years. Expectations, however, were for 6.5% on consensus, with many on the Street whispering they thought the quarter could report as high as 7%. Still, with personal consumption coming in at +10.7% for the quarter, this is the speediest rate of overall economic growth since the Reagan adminstration. That said, this is the first preliminary read; we can expect revisions in the two more prints to come.
But everything investors had been looking for appears to be coming into fruition: the price index of 4.1% was far ahead of the 2.5% expected (and more than doubled Q4’s 2%). Personal Consumption Expenditures in Q1 overall came in at 3.5%, 100 basis points higher than consensus. Held back temporarily by a 5% drop in fixed investment, Goods grew 24% while Services gained 4.6%. But we expect a big surge in Services in Q2 and beyond, as the Great Reopening continues apace.
Pending Home Sales will drop after the market opens today for March: +5.4% is expected — a big rebound from the -10.6% reported for February. Otherwise, the latest FAANG earnings report from Amazon (AMZN - Free Report) comes out after today’s closing bell, looking for a blowout quarter on the level of Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) and Facebook , and an improvement over Netflix’s (NFLX - Free Report) relative disappointment.
Not a lot of time to discuss pre-market earnings reports this morning. Suffice it to say both Comcast (CMCSA - Free Report) and Caterpillar (CAT - Free Report) both gained in early trading on favorable quarterly results. Comcast saw an increase in wireless subscribers in the quarter, while Caterpillar saw a rise in machinery sales.
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Shutterstock
Jobless Claims 553K, Q1 GDP 6.4%: Great Reopening Moves Forward
Thursday, April 29, 2021
We kick off another trading day, basically in the heart of Q1 earnings season, with a couple key economic metrics for both the past week and past quarter. New jobless claims have buoyed a bit from last week’s release, but are nevertheless re-establishing post-pandemic lows. Meanwhile, the first look at Q1 Gross Domestic Product (GDP) came in hot… only not quite as hot as the “whisper numbers” were looking for.
First, Initial Jobless Claims: for the second week in a row, these weekly unemployment reads have set new lows since the pandemic effect took hold: 553K. However, this is because the previous week’s 547K — the previous pandemic low — was revised upward rather significantly to 566K. Still, after seven straight weeks averaging more than 700K new claims per week, this is the third straight week where we fell all the way through the 600Ks to a 5-handle on claims.
Continuing Claims have bumped up a bit from last week’s pandemic-low read, downwardly revised to 3.65 million, to 3.66 million in this latest print (a week in arrears from Initial Claims). Plenty of these longer-term unemployed are being sopped up by Pandemic Unemployment Assistance (PUA), which is a program that remains on the books for the time being. Overall, we’re still down roughly 8.5 million American jobs from February 2020 levels.
The first read on Q1 GDP came in at 6.4% — the highest quarterly total in nearly 18 years. Expectations, however, were for 6.5% on consensus, with many on the Street whispering they thought the quarter could report as high as 7%. Still, with personal consumption coming in at +10.7% for the quarter, this is the speediest rate of overall economic growth since the Reagan adminstration. That said, this is the first preliminary read; we can expect revisions in the two more prints to come.
But everything investors had been looking for appears to be coming into fruition: the price index of 4.1% was far ahead of the 2.5% expected (and more than doubled Q4’s 2%). Personal Consumption Expenditures in Q1 overall came in at 3.5%, 100 basis points higher than consensus. Held back temporarily by a 5% drop in fixed investment, Goods grew 24% while Services gained 4.6%. But we expect a big surge in Services in Q2 and beyond, as the Great Reopening continues apace.
Pending Home Sales will drop after the market opens today for March: +5.4% is expected — a big rebound from the -10.6% reported for February. Otherwise, the latest FAANG earnings report from Amazon (AMZN - Free Report) comes out after today’s closing bell, looking for a blowout quarter on the level of Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) and Facebook , and an improvement over Netflix’s (NFLX - Free Report) relative disappointment.
Not a lot of time to discuss pre-market earnings reports this morning. Suffice it to say both Comcast (CMCSA - Free Report) and Caterpillar (CAT - Free Report) both gained in early trading on favorable quarterly results. Comcast saw an increase in wireless subscribers in the quarter, while Caterpillar saw a rise in machinery sales.
For more on CMCSA’s earnings, click here.
For more on CAT’s earnings, click here.
Questions or comments about this article and/or its author? Click here>>
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>