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Q1 Earnings Season Maintains its Momentum

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Ahead of the opening bell this morning, we see a new all-time low U.S. Trade Deficit for March: -$74.4 billion, slightly less than analysts’ expectations of -$74.8 billion, but deeper than a downwardly revised -$70.5 billion for February. Our trade deficit has been sinking like a stone since the start of 2020; we now haven’t had a narrower trade deficit than $60 billion for more than a year.

These trade numbers go all the way back to 1950, so all-time lows may retain a significance not being fully appreciated at this stage. The last deep crevasse was filled partly during the bailout of the Great Recession; without that, we may be well lower than our current levels. Prior to the late 70s, we almost never saw out trade balance veer in either direction off zero. Since the start of the century, those days appear to be long gone.

Coronavirus-buster Pfizer (PFE - Free Report) beat estimates on quarterly earnings and sales in its Q1 report released in today’s pre-market: 93 cents per share topped the 79 cents expected, as well as the 80 cents per share posted in the year-ago quarter. Quarterly sales of $14.58 billion for the Covid-vaccine major surged past expectations by 8.1%, and nicely higher than the $12.03 billion a year ago.

But Pfizer’s stock performance has lagged the S&P 500 year to date (8% vs. 11%), and have gained 11.75% over the past year. Considering the impact of its vaccine developed with biotech firm BioNTech (BNTX - Free Report) , this might come as a bit of a surprise. Even today’s Q1 beat has garnered only 0.7% in gains this pre-market session. A sense of caution has begun to permeate the market off near-all-time highs in the indexes, and Pfizer looks to be a recipient of this today.

Zacks Rank #2 (Buy)-rated UnderArmour (UAA - Free Report) easily took out estimates on both top and bottom lines in its Q1 earnings report this morning: 16 cents per share quadrupled the 4 cents in the Zacks consensus, marking a huge year-over-year increase from -34 cents in the pandemic ravaged Q1 of 2020. Revenues came in at $1.26 billion from the $1.20 billion analysts were looking for, on 32% growth in North America and +69% International. Online sales are up 69%.

New motor vehicle sales data shows robust demand for Ford (F - Free Report) , which saw 64.8% growth. Compared to April 2019 — discounting any pandemic impact from the past year — we saw 24% demand. The company disclosed a record-high transaction price of $43,600 per vehicle, with demand keeping inventories relatively low: 35 days’ supply. Most remarkably, the average Ford Bronco currently stays on a showroom floor for a very low 13 days.

After the market opens, new Factory Orders for March are expected to bounce back +1.3% from the -0.8% reported for February. Economic metrics like these from our rear view help demonstrate how quickly our economy has experienced a turnaround: while 1.3% would be a marked improvement, other manufacturing data would suggest we will see even bigger growth numbers in the coming months.

Tomorrow morning brings us private-sector payroll data from Automatic Data Processing (ADP - Free Report) , where expectations are for 800K jobs to have been filled in April. Friday’s nonfarm payroll report from the U.S. Bureau of Labor Statistics are looking for an even 1 million new jobs created last month. The labor market appears to be ahead of where the Fed had been projecting over the past several months. Should these figures surprise to the upside, they will surely command headlines.

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