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This is a big day for market data. Not only is this the biggest session of Q2 earnings season to date, but Thursday Jobless Claims, Durable Goods Orders and pre-PCE numbers like new Gross Domestic Product (GDP) are all out ahead of the bell. Following the worst trading day of the year so far, this data has helped swing pre-market indices into the green since much of this data was released: the Dow is +55 points, the S&P 500 is +5 and the Nasdaq +25 points at this hour.
The first look at Q2 GDP is +2.8%. This doubles the final entry for Q1 GDP, though with two revisions pending in the coming months, we’re far from the final word on this. As inventory metrics yesterday helped illustrate, a build-up in inventories is at least partly responsible for this GDP gain (and inventories are the “worst” type of growth: if stored goods don’t sell, they need to be worked off, which would help reduce growth in the future). But this is also better than the +2.1% expected, and the strongest quarter of growth since +3.4% in Q4 of last year.
Another pre-PCE print, the Price Index, came down notably for the quarter. A headline +2.3% was 30 basis points (bps) lower than expected and -80 bps from the +3.1% reported last month. It’s also the lowest since +1.6% in Q4 of last year. The Core Price Index, on the other hand, came in 20 bps higher than anticipated to +2.9%, from the +3.7% posted for Q1 (+2.0% was the Q4 print). Domestic growth with lower prices, high inventories aside, is about as Goldilocks as we can expect.
Initial Jobless Claims came in-line with estimates at 235K. This is down -10K from the upwardly revised 245K the previous week. Since late May, we’ve had two weeks above 240K and two weeks below 230K, displaying a new jobless claim range about 20K higher than we were seeing this past spring. Continuing Claims, reported a month in arrears from new claims, reached 1.851 million — the seventh straight week north of 1.8 million, but still not showing much strain in the labor market so far.
Durable Goods Orders fell precipitously, -6.6%. Expectations were for +0.3%, and this marks the first negative month since January’s -6.9%. However, strip out volatile Transportation goods — think airplane parts, etc. — and this figure shifts to the positive: +0.5%, up from an expected -0.1%. Non-defense, ex-aircraft orders — a proxy for “normal” business spending — came in at a healthy +1.0%, reversing the -0.9% revision to the prior month. Shipments came in at +0.1%, up from -0.7% previously.
We’ll do a quick recap of the Q2 earnings reports out this morning. This is by no means a complete list:
Hasbro (HAS - Free Report) shares are up +9% in the pre-market. This is due to its +58% bottom-line surprise in Q2, with earnings of $1.22 per share outshining the 77 cents projected. Revenues came in +5.6% ahead of the Zacks consensus, on quarterly strength in digital games (as compared to traditional toys and games).
American Airlines (AAL - Free Report) is having a worse time of it. While the major airline carrier beat estimates by 5 cents on its bottom line, it missed slightly, -0.6%, on the top line. That, plus significantly lower forward guidance, has brought shares down -6.6% in the pre-market.
Southwest Airlines (LUV - Free Report) is also out with Q2 numbers this morning. This airline beat estimates on both top and bottom lines — by +16% and +0.41%, respectively — but is still seeing a -5% selloff in today’s pre-market.
Honeywell (HON - Free Report) is also seeing lower pre-market futures after beating estimates. Both a top-line beat of +1.86% and a bottom-line earnings outperformance of 7 cents per share were admirable, but mixed guidance has sent shares in early trading down -4.5%.
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Q2 2024 U.S. GDP Jumps
This is a big day for market data. Not only is this the biggest session of Q2 earnings season to date, but Thursday Jobless Claims, Durable Goods Orders and pre-PCE numbers like new Gross Domestic Product (GDP) are all out ahead of the bell. Following the worst trading day of the year so far, this data has helped swing pre-market indices into the green since much of this data was released: the Dow is +55 points, the S&P 500 is +5 and the Nasdaq +25 points at this hour.
The first look at Q2 GDP is +2.8%. This doubles the final entry for Q1 GDP, though with two revisions pending in the coming months, we’re far from the final word on this. As inventory metrics yesterday helped illustrate, a build-up in inventories is at least partly responsible for this GDP gain (and inventories are the “worst” type of growth: if stored goods don’t sell, they need to be worked off, which would help reduce growth in the future). But this is also better than the +2.1% expected, and the strongest quarter of growth since +3.4% in Q4 of last year.
Another pre-PCE print, the Price Index, came down notably for the quarter. A headline +2.3% was 30 basis points (bps) lower than expected and -80 bps from the +3.1% reported last month. It’s also the lowest since +1.6% in Q4 of last year. The Core Price Index, on the other hand, came in 20 bps higher than anticipated to +2.9%, from the +3.7% posted for Q1 (+2.0% was the Q4 print). Domestic growth with lower prices, high inventories aside, is about as Goldilocks as we can expect.
Initial Jobless Claims came in-line with estimates at 235K. This is down -10K from the upwardly revised 245K the previous week. Since late May, we’ve had two weeks above 240K and two weeks below 230K, displaying a new jobless claim range about 20K higher than we were seeing this past spring. Continuing Claims, reported a month in arrears from new claims, reached 1.851 million — the seventh straight week north of 1.8 million, but still not showing much strain in the labor market so far.
Durable Goods Orders fell precipitously, -6.6%. Expectations were for +0.3%, and this marks the first negative month since January’s -6.9%. However, strip out volatile Transportation goods — think airplane parts, etc. — and this figure shifts to the positive: +0.5%, up from an expected -0.1%. Non-defense, ex-aircraft orders — a proxy for “normal” business spending — came in at a healthy +1.0%, reversing the -0.9% revision to the prior month. Shipments came in at +0.1%, up from -0.7% previously.
We’ll do a quick recap of the Q2 earnings reports out this morning. This is by no means a complete list:
Hasbro (HAS - Free Report) shares are up +9% in the pre-market. This is due to its +58% bottom-line surprise in Q2, with earnings of $1.22 per share outshining the 77 cents projected. Revenues came in +5.6% ahead of the Zacks consensus, on quarterly strength in digital games (as compared to traditional toys and games).
American Airlines (AAL - Free Report) is having a worse time of it. While the major airline carrier beat estimates by 5 cents on its bottom line, it missed slightly, -0.6%, on the top line. That, plus significantly lower forward guidance, has brought shares down -6.6% in the pre-market.
Southwest Airlines (LUV - Free Report) is also out with Q2 numbers this morning. This airline beat estimates on both top and bottom lines — by +16% and +0.41%, respectively — but is still seeing a -5% selloff in today’s pre-market.
Honeywell (HON - Free Report) is also seeing lower pre-market futures after beating estimates. Both a top-line beat of +1.86% and a bottom-line earnings outperformance of 7 cents per share were admirable, but mixed guidance has sent shares in early trading down -4.5%.