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This Thursday morning, Initial Jobless Claims came in exactly as expected at 227K, remaining in the low-cycle range on the past few weeks, and up 6000 new claims from the previous week’s unrevised 221K, which was the cycle low. Continuing Claims, reported a week in arrears from new claims, are also near cycle lows: 1.700 million is up from the 1.68 million longer-term jobless claims reported the previous week, which remains the cycle low, and well off the 1.8+ million pace we had been on back in April of this year.
This is more strong jobs data ahead of tomorrow’s Employment Situation report from the U.S. government. In fact, thus far this week has shown nothing but a labor force apparently immune to outside forces working against the economy. Tuesday’s JOLTS report saw a continuing meltdown in overall job openings, -34K for June, while yesterday’s private-sector jobs release from ADP (ADP - Free Report) showed another big upside surprise in jobs filled, with Leisure & Hospitality bringing in 200K new jobs last month all by itself.
Q2 Productivity jumped above expectations this morning, with the non-farm headline +3.7%; +2.3% had been expected, following -2.1% reported for Q1. This figure is the highest we’ve seen since Q3 of 2020, when the bump off a Covid wave brought us +6.5%. Also, Unit Labor Costs came in lower than expected — more good news — at +1.6%, the lowest we’ve seen since Q4 of last year. Basically, if productivity is high but labor costs are low, that’s a recipe for a very strong economy.
Before today’s opening bell, Warner Brothers Discovery (WBD - Free Report) shares had been up roughly +6% even though the company missed expectations on both top and bottom lines, but pre-market trading has now brought the stock down to yesterday’s close. Negative earnings of -44 cents per share missed the -39 cents in the Zacks consensus, while revenues of $10.34 billion missed the $10.47 billion expected. The positive take seems to have come from its debt load relief projected: after already paying down $9 billion in debt since the two companies merged, WBD now has a tender offer to pay up to $2.7 billion in additional debt.
Shake Shack (SHAK - Free Report) also reported Q2 earnings before today’s regular trading session, doubling expectations on the bottom line with earnings of 18 cents per share, while revenues of $271.8 million missed the Zacks consensus by -0.95% (though notably above the year-ago $230.75 million). Shares are trading down -4% this morning, but consider this stock has grown by leaps and bounds, +80% year to date, more than 4x the S&P 500. For more on SHAK's earnings, click here.
After today’s close, Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) close out the so-called FAANG earnings reports for the quarter. Estimates for Apple is for slightly negative year-over-year comparisons on both earnings and overall sales, while Amazon looks for super +240% earnings growth in its Q2, with revenues expected up +8.5%. Both companies are up strong year to date — Apple +53% and Amazon +49% — and carry a Zacks Rank #3 (Hold) into the earnings releases. Questions or comments about this article and/or author? Click here>>
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Jobs, Productivity Illustrate Strong Economy; WBD, SHAK Report
This Thursday morning, Initial Jobless Claims came in exactly as expected at 227K, remaining in the low-cycle range on the past few weeks, and up 6000 new claims from the previous week’s unrevised 221K, which was the cycle low. Continuing Claims, reported a week in arrears from new claims, are also near cycle lows: 1.700 million is up from the 1.68 million longer-term jobless claims reported the previous week, which remains the cycle low, and well off the 1.8+ million pace we had been on back in April of this year.
This is more strong jobs data ahead of tomorrow’s Employment Situation report from the U.S. government. In fact, thus far this week has shown nothing but a labor force apparently immune to outside forces working against the economy. Tuesday’s JOLTS report saw a continuing meltdown in overall job openings, -34K for June, while yesterday’s private-sector jobs release from ADP (ADP - Free Report) showed another big upside surprise in jobs filled, with Leisure & Hospitality bringing in 200K new jobs last month all by itself.
Q2 Productivity jumped above expectations this morning, with the non-farm headline +3.7%; +2.3% had been expected, following -2.1% reported for Q1. This figure is the highest we’ve seen since Q3 of 2020, when the bump off a Covid wave brought us +6.5%. Also, Unit Labor Costs came in lower than expected — more good news — at +1.6%, the lowest we’ve seen since Q4 of last year. Basically, if productivity is high but labor costs are low, that’s a recipe for a very strong economy.
Before today’s opening bell, Warner Brothers Discovery (WBD - Free Report) shares had been up roughly +6% even though the company missed expectations on both top and bottom lines, but pre-market trading has now brought the stock down to yesterday’s close. Negative earnings of -44 cents per share missed the -39 cents in the Zacks consensus, while revenues of $10.34 billion missed the $10.47 billion expected. The positive take seems to have come from its debt load relief projected: after already paying down $9 billion in debt since the two companies merged, WBD now has a tender offer to pay up to $2.7 billion in additional debt.
Shake Shack (SHAK - Free Report) also reported Q2 earnings before today’s regular trading session, doubling expectations on the bottom line with earnings of 18 cents per share, while revenues of $271.8 million missed the Zacks consensus by -0.95% (though notably above the year-ago $230.75 million). Shares are trading down -4% this morning, but consider this stock has grown by leaps and bounds, +80% year to date, more than 4x the S&P 500. For more on SHAK's earnings, click here.
After today’s close, Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) close out the so-called FAANG earnings reports for the quarter. Estimates for Apple is for slightly negative year-over-year comparisons on both earnings and overall sales, while Amazon looks for super +240% earnings growth in its Q2, with revenues expected up +8.5%. Both companies are up strong year to date — Apple +53% and Amazon +49% — and carry a Zacks Rank #3 (Hold) into the earnings releases.
Questions or comments about this article and/or author? Click here>>