So far, so good for earnings season. For S&P 500 companies, revenues are up 10% on average, while earnings are up by a third.
While it’s still early, a record percentage of first-quarter profit reports from major U.S. companies are coming in above Wall Street expectations.
Through Thursday, we had results in from 110 of the S&P 500 companies. And 85.5% of the S&P 500 beat analysts’ estimates for earnings per share. This is according to data from Refintiv.
If that trend continues, it would be the highest beat rate on record going back to 1994. An average of 78% of companies have beaten earnings estimates in the past four quarters.
And if the trend continues, it will help justify stocks’ high valuations. So, the bull market may roll on for a while.
It certainly has been doing well.
CNBC reports that the S&P 500 has risen 24.1% since Election Day. The only administration (going back to 1953, or the beginning of Eisenhower’s term) to rival Biden’s first 100 days were those of John F. Kennedy, who saw an 18.5% rise during the same period.
The Big News
U.S. Vaccinations Rate Slowing
The U.S. has doled out 230.8 million doses of the vaccine since the rollout began in December, the CDC said on Monday. Nearly 141 million Americans have received one or more doses. More than 95 million people are fully vaccinated. That equals 37% of the adult population. But demand for Covid-19 shots has slowed. The U.S. reported 2.74 million new doses given per day over the last week. That’s the lowest level since March 28. The seven-day average peaked at 3.38 million on April 16.
U.S. Airlines Say ‘Worst Behind Us’
U.S. airlines have struck an optimistic note, saying the “worst is behind us”. “This crisis is far from over . . . but there is no doubt, the pace of recovery is accelerating,” American Airlines CEO Doug Parker said on the company’s earnings call. Southwest Airlines CEO Gary Kelly sounded similarly upbeat. “While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” he said.
Demand has started to recover. In April so far, the U.S. Transportation Security Administration has screened 1.39 million passengers a day on average. That is the highest since the start of the pandemic. But it’s still far below the 2.3 million average in the same period in 2019.
You Need Two Doses to Be Protected
Millions of Americans are not getting the second doses of their Covid-19 vaccines. And their ranks are growing. More than five million people, or nearly 8% of those who got a first shot of the Pfizer or Moderna vaccines, have missed their second doses. This is according to the most recent data from the CDC. That is more than double the rate among people who got inoculated in the first several weeks of the nationwide vaccine campaign.
Sanofi to Make Moderna Vaccine
Sanofi (SNY) signed an agreement to help manufacture as many as 200 million doses of Moderna’s Covid-19 vaccine in the U.S., starting in September. The agreement runs through April 2022. It’s the latest to add manufacturing capacity to increase supply. It’s a fresh example of industry collaboration to quickly scale up global production of Covid-19 vaccines. Sanofi said it would fill vials and finish packaging for the Moderna vaccine at its plant in Ridgefield, N.J.
Biden Administration to Aid India
The Biden administration said it will immediately make raw materials needed for India’s coronavirus vaccine production available. It will also release U.S. doses of AstraZeneca vaccine to India. In recent weeks, India has grappled with a staggering rise in new coronavirus infections. Over the weekend, it set another global record for daily cases.
The Coronavirus Numbers
Here are the numbers from Tuesday at 8 a.m. ET from Johns Hopkins University:
- 147,961,579 Infected Worldwide
- 1,026,495,984 Vaccines Given Globally
- 3,123,249 Deaths
- 32,125,549 Infected in the U.S.
- 230,768,454 U.S. Vaccine Doses Administered
- 572,696 Deaths in the U.S.
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Tesla’s shares slipped 2.5% after its earnings report. It posted a record profit in the first quarter. But that’s not because of cars. Instead, it benefited from its huge holding in Bitcoin and the sale of carbon credits.
We’re into the meat of earnings season proper now with 173 S&P 500 companies that account for around half the market capitalization reporting this week.
Watch out for other heavyweights that will report tonight. These include Alphabet (GOOGL) and Microsoft (MSFT), Starbucks (SBUX) and Pinterest (PIN).
One final note: commodities have come back from the pandemic lows and are soaring to multi-year highs.
Copper prices continue to advance, hitting a fresh 10-year high this morning. And in ag, both corn and wheat are at their highest level since 2013. Soybeans are also at an 8.5-year high.
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Yours in Health & Wealth,