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Jobless Claims, Q3 Earnings Power Forward

Thursday, October 21, 2021

A new Thursday morning brings us new jobs data — specifically, weekly Initial Jobless Claims, which have come down to a new post-Covid low: 290K beats the previous week’s upwardly revised 296K and analysts’ expectations for 300K new claims. It’s now the second week in a row new claims have ratcheted down to the lowest levels we’ve seen since March 2020, when pandemic conditions first took hold on the labor market.

Continuing Claims, reported a week in arrears, also posted a fresh post-Covid low: 2.481 million is another leg down from the previous week’s upwardly revised 2.603 million, which itself was a new post-pandemic low weekly total. All of this is very good news for employment overall; those jobs gains in the monthly numbers that have been rather stingy over the past quarter-year or so are making nice strides currently, ahead of the all-important holiday shopping season.

We also see a new Philly Fed survey, which tracks productivity in the U.S.’s 6th-largest city. The headline 23.8 was below the consensus expectation 24.5 and lower than the 30.7 reported for September, but it’s still a higher level than we’d seen in two of the last three months. That said, today’s figure comes in less than half of this cycle’s high, which was a robust 50.2 in April. Still, we’re in the upper half of Philly Fed reads going back five years. And there may be more upside as economic traction gains going forward.

AT&T T put up impressive numbers in its Q3 report this morning, demonstrating the wisdom behind the telecom giant buying WarnerMedia last spring: 87 cents per share outpaced the 78 cents analysts were looking for and the 76 cents per share reported in the year-ago quarter. Revenues, on the other hand, came in -1.5% light of estimates to $39.92 billion, and lower than the $42.34 billion in the year-ago quarter. But its HBO ownership helped net adds boost by 1.2 million in the quarter. Shares are up +1.4% in early trading. For more on T’s earnings, click here.

American Airlines AAL beat estimates for its fifth straight quarter this morning, posting a loss of -99 cents per share, which was narrower than the -$1.04 in the Zacks consensus and the -$5.54 per share reported in the Covid-hampered year-ago quarter. Revenues of $8.97 billion outpaced expectations by +0.48%. We’ve seen improvement in the airlines so far in Q3 overall, going back to Delta’s DAL report last week. Shares are up nearly 1% in the pre-market, and the stock is +23.8% year to date. For more on AAL’s earnings, click here.

Pre-market futures are dropping, however, even as Q3 earnings power on with better-than-expected results. Investors may be eyeballing the 10-year Treasury yield, now escalating to 1.675% this morning, which brings with it a host of speculation about the next Fed move early next month regarding tapering asset purchases and, later, raising interest rates. We’ve also been on a strong trajectory so far this week, so booking profits may be in order somewhat, as well. The Dow is -75 points, the S&P 500 is -8 and the Nasdaq -30.

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