- Airline earnings front and center as three major carriers report today
- European Central Bank leaves rates and bond buying unchanged
- Jobless claims fall for second week in a row to new post-Covid-19 low
It’s a busy day for the airlines as three major carriers report and investors wait to hear what they might say about summer travel trends. In the meantime, broader market action looks a little unsettled to start the day without much direction one way or another.
It might be a bit of a wait and see kind of day, but the news is starting to trickle in and a lot of it looks positive. First of all, initial jobless claims fell to 547,000 last week, down from a revised 586,000 the week before. It’s a new post-Covid-19 low for this metric, but still about double what we saw before the pandemic. You never want to make too much of one number, but you continue to see the trend move in the right direction and that’s what you want.
If you read this column yesterday, you might remember we suggested that Wednesday could be a test of market sentiment after a two-day pullback. If yesterday was actually a test, it passed with flying colors, with the major indices solidly in the green. The Russell 2000 (RUT) small-cap index, which had been under more pressure earlier this week than its fellow indices, actually had a great day and rose more than 2%.
While yesterday’s weather was sunny on Wall Street, keep in mind that it followed two days of rain, so basically we’re back to where we started the week. Stocks did see some buying in the final hour yesterday, which can sometimes indicate a chance for follow-through. However, the overnight session featured a bit of weakness, so it’s unclear if spillover buying is in store.
Checking overseas, the European Central Bank (ECB) kept rates and bond buying unchanged Thursday. Neither is really a big surprise, so it’s probably not a market-moving event.
Earnings continue to drive the day, and so far they’ve been pretty good. Basically, if you beat consensus on revenue, you’re fine, but if a company misses on revenue, they’re getting hammered. People also want to see companies paint a better picture of the future.
What to Watch with Airlines
Earnings today taxi toward the runway, with Southwest
For now, investors have to take what they can get. A good example is shares of AAL rising 2% in pre-market trading today after the airline’s earnings came in pretty much in line with expectations. LUV shares also moved higher in pre-market trading after beating estimates, and they said their recovery is leisure-driven. The…
Go to the news source: Jobless Claims Add Market Tailwind As Airline Earnings Prepare To Take Off