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US wholesale inventories rise by 1.3% in March

U.S. wholesale inventories rose sightly less than initially estimated in March as sales surged amid robust demand. The Commerce Department said on Friday that wholesale inventories increased 1.3%, instead of 1.4% as estimated last month. Stocks at wholesalers gained 1.0% in February. The component of wholesale inventories that goes into the calculation of gross domestic product increased 1.3% in March.

Wholesale inventories shot up 4.5% in March from a year earlier. Sales at wholesalers jumped 4.6% after being unchanged in February.

Overall, business inventories were depleted in the first quarter amid a burst in domestic demand. The inventory drawdown subtracted 2.64 percentage points from GDP growth last quarter. Still, the economy grew at a robust 6.4% annualized rate in the March-January period after expanding at a 4.3% pace in the fourth quarter. At March’s sales pace it would take wholesalers 1.22 months to clear shelves, down from 1.26 months in February. Nick Note: This is the best number in ten years… red hot and getting hotter all the time… they will soon figure it out….

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Breaking: US adds 266,000 jobs in April vs. 978,000 expected

Nonfarm Payrolls (NFP) in the US rose only by 266,000 in April, the data published by the US Bureau of Labor Statistics showed on Friday. This reading followed March’s increase of 770,000 (revised from 916,000) and missed the market expectation of 978,000 by a wide margin. Further details of the press release revealed that the Unemployment Rate rose to 6.1%, compared to analysts’ estimate of 5.8%, and the Average Hourly Earnings increased by 0.7% on a monthly basis. The number of unemployed persons stood at 9.8 million, more than in March. The figure for those on temporary layoff also increased since the previous month to 2.1 million. The labor force participation rate remained virtually unchanged, coming in at 61.7%, down by 1.6% year-on-year. Meanwhile, the number of people working from home due to the COVID-19 pandemic decreased to 18.3% month-on-month.

More to come…

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Fed: Asset prices vulnerable if risk appetite falls

  • Rising asset prices are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.
  • Fed Governor Lael Brainard said the situation bears watching and points up the importance of making sure the system has proper safeguards.

“Asset prices may be vulnerable to significant declines should risk appetite fall,” the central bank said.Rising asset prices in the stock market and elsewhere are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday. In its semiannual Financial Stability Report, the central bank said that while the system overall has remained largely stable even through the Covid-19 pandemic, future dangers are rising, in particular should the aggressive run on stocks tail off. Investors have snapped up equities, corporate bonds and cryptocurrencies. They’ve poured billions into blank-check companies called SPACs, and the market has been mostly brisk for traditional initial public offerings. Fed Chairman Jerome Powell and others have been asked repeatedly about whether they’re concerned over the rising prices. Powell specifically has said that as long as interest rates stay low, the valuations are justified. However, the report notes that there’s danger lurking should market sentiment change. “High asset prices in part reflect the continued low level of Treasury yields. However, valuations for some assets are elevated relative to historical norms even when using measures that account for Treasury yields,” the report states. “In this setting, asset prices may be vulnerable to significant declines should risk appetite fall.” In an accompanying statement, Fed Governor Lael Brainard said the situation bears watching and points out the importance of making sure the system has proper safeguards. She specifically mentioned having banks increase their capital requirements during economic expansions as a buffer against downturns. The report also mentions risk at hedge funds and other nonbank financial institutions on several occasions as potential threats to the system. “Vulnerabilities associated with elevated risk appetite are rising. Valuations across a range of asset classes have continued to rise from levels that were already elevated late last year,” Brainard said. “The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.” The report notes that particular sectors including energy, travel and hospitality have particularly high vulnerabilities because of their sensitivity to the pandemic. The Fed also talks about potential threats from money market and open-end funds. The Fed goes into a few specific scenarios that show potential risks to the system. It specifically talked about the Archegos Capital Management episode, when the firm could not meet margin calls, causing several large banks to take big losses. “While broader market spillovers appeared limited, the episode highlights the potential for material distress at [nonbank financial institutions] to affect the broader financial system,” the report said. Overall, the Fed said the current state of the system is sound, with household balance sheets in good shape, and corporations supported by an improving economy and low interest rates that have allowed default rates to fall. Even the $1.7 trillion in student loans pose “limited” risks to the economy, given that most education debt is held by the top 40% of earners. A survey the Fed conducted across a variety of 24 market contacts showed that the biggest worry is virus-related, specifically focusing on vaccine-resistant variants. That’s followed by a sharp increase in interest rates, a surge in inflation, and tensions between the U.S. and China.

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Biden favors corporate tax rate increase to 25-28%

  • On Thursday, Biden said the corporate tax rate should be raised to between 25% and 28%.
  • He previously proposed 28% to offset infrastructure spending, but some Democrats have balked at that.
  • Biden’s comments signal he may be open to compromise with moderate party members.

In an address in Louisiana, President Joe Biden said the corporate tax rate should be between 25% and 28% — a potential sign of compromise with moderate Democrats. Biden had proposed a 28% corporate tax rate, an increase from its current rate of 21%, to offset his planned infrastructure spending. The rate was slashed from 35% in former President Donald Trump’s 2017 tax law. “That’s a couple hundred billion dollars,” Biden said of upping the rate. “We can pay for these things. I’m not talking about deficit spending.” He added: “What I’m proposing is badly needed and able to be paid for and still grow. Trickle-down ain’t working very well, man.”  Nick Note: Like everything else in the times we are in people have a hissiefit over nothing. I heard talking heads rant about a stock market crash because the capital gains tax will be going over 40%….. Really? The 22% present capital gains tax will go to 24% so everyone can calm down and back away from the ledge.

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China’s services activity expands sharply in April Industrial production in Germany up 2.5% in March

China’s services activity expands sharply in April

Caixin China PMI landed at 56.3 in April, landing in line with expectations and marking an increase compared to the figure of 54.3 recorded in March, according to a report released by the IHS Markit on Friday. China’s service sector business activity saw another solid increase in April, with the figure marking the steepest rate of growth seen for four months and showing sustained improvement as the headline index has remained above the neutral 50 for ten months straight. “The reading hit the highest level this year, signaling an accelerated recovery of the services sector,” said Senior Economist at Caixin Insight Group Dr. Wang Zhe. “Surveyed service providers were confident about the control of the epidemic and the economic recovery,” he cocnluded.

Industrial production in Germany up 2.5% in March

German industrial production in March increased 2.5% compared to the previous month, beating market expectations, the Federal Statistical Office reported on Friday. Moreover, year-over-year industrial output increased by 6.5%. Excluding non-energy manufacturing and construction, industrial production in March 2021 was up 0.7% when compared to February 2021, with the productions of intermediate goods and consumer goods rising 1.2% and 2.9% respectively. The production of capital goods was the only area where there was a decrease, falling 0.4% month-over-month, as energy production climbed 2.4% and construction output surged 10.8%.

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Initial jobless claims in US down 92,000 to 498,000 US job cuts down to 22,913 in April

Initial jobless claims in US down

The number of initial jobless claims in the United States for the week ending April 30 declined 92,000 compared to the previous week’s revised figure of 590,000 to 498,000, beating market expectations, the US Labor Department unveiled on Thursday. The reported level is the lowest since March 14 of last year, where it stood at 256,000. The previous week’s level was upped to 590,000, an increase of 37,000. Meanwhile, the 4-week moving average dropped 61,000 from the previous week’s revised average to 560,000. The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending April 24, remaining unchanged from the previous week’s unrevised rate. Insurance unemployment during the same week increased by 37,000 from the week-over-week revised level to 3,690,000.

US job cuts down to 22,913 in April

Job cuts in the United States in April decreased 25% when compared to the previous month to 22,913, a report published by Challenger, Gray & Christmas Inc. on Thursday showed. This is the lowest monthly total since June 2000 and equates to a year-on-year decline of 96.6%. Senior Vice President Andrew Challenger stated: “The good news is that employers are no longer undergoing massive cuts, consumers are beginning to feel safe traveling and spending, and the number of job openings is edging higher. The bad news is we’re experiencing a labor shortage despite millions of Americans still out of work.” Nick Note: these are incredible numbers… And this is just the start of the recovery………. Nick Note: The big deal will be tomorrows 8:30 AM releace of Aprils employment report.

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ViacomCBS Inc. reported its revenue increased by 14% operating income rose by 69%

Another high tech stock wall street trashed…… its now soaring!

ViacomCBS Inc. reported on Thursday its revenue in the first fiscal quarter of 2021 increased by 14% year-on-year to reach $7.41 billion. Diluted earnings per share were $1.42. The company’s operating income rose to $1.52 billion which marks a 69% jump compared to the first quarter of 2020, while net income was up 79% to $899 million. “In Q1, we accelerated our expansion in streaming with the launch of Paramount+ further enhancing ViacomCBS’ ecosystem of premium, pay and free services. The strong consumer response we have seen is evident in today’s numbers – we have grown global streaming revenue 65 percent year-over-year and we added 6M global streaming subscribers, driven by Paramount+, to reach 36M streaming subscribers globally. […] Our early momentum in streaming is a testament to the breadth and relevance of our differentiated offerings,” ViacomCBS Chief Executive Officer Bob Bakish stated. ViacomCBS shares rose 2.92% in pre-market trading shortly after the report was published.

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The Assholes still do not grasp the coming BOO

The market is taking a bit of a pause thinking… the best news might be behind us: Strategist

NB: It boils down to a simple proposition. Has the recovery peeked along with the stock market. Or is this the start of the biggest boom ever. Because if this is the start of the reopening boom the rally in the stock market has just begun. And fears of interest rates going higher. Or higher taxes are no more then static. The economic reports and earnings PROVE to me this rally has legs and is in its infacicy

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Banks Booming too: UniCredit’s revenue at $4.7B, up 7.1% YoY Societe Generale revenue rises 20.8% to €6.24B in Q1

UniCredit’s revenue at $4.7B, up 7.1% YoY

Italian banking giant UniCredit SpA announced on Thursday its revenue increased 7.1% in the first quarter to reach a figure of €4.7 billion. The bank’s net operating profit jumped to €2.1 billion from €624 million in the first quarter of 2020, while the stated net income was at €887 million. Operating expenses stood at €2.4 billion, 3.1% less than 12 months ago. This resulted in the lowest quarterly cost/income ratio in over a decade, at 51.5%. The bank’s CET1 ratio was strong at 15.92%. “As we look to the future, it will take time to re-energise and strengthen the business, moving from a period of active retrenchment to one defined by disciplined profitable growth and healthy organic capital generation. We will reinforce client centricity in everything we do. We will deliver increased integration of technology and simplify the business as we seek to remove blockers and obstacles that prevent us from adequately serving our clients,” stated Chief Executive Officer of UniCredit SpA Andrea Orcel.

ING’s net result soars 50% to €1B in Q1

ING Groep N.V. announced on Thursday that its net result in the first quarter of 2021 jumped 50% year on year to €1 billion and result before tax was up 43.9% to €1.5 billion. The Dutch bank’s total income amounted to €4.7 billion, climbing 4.2% compared to the same period a year earlier. Meanwhile, net fee and commission income rose 9.1% to €854 million. “ING delivered a strong performance in the first quarter of 2021. The sharp rebound in net profit compared to the year-earlier period was driven by a good increase in fee income and lower risk costs,” CEO Steven van Rijswijk stated.

Societe Generale revenue rises 20.8% to €6.24B in Q1

Societe Generale SA announced on Thursday that its revenue stood at €6.24 billion in the first quarter of fiscal 2021, rising by 20.8% compared to last year’s starting quarter. Its gross operating income landed at €1.49 billion, down from 2020’s first-quarter income of €492 million. The company reported an EPS of €0.79 for the time period, which marks an increase compared to last year’s loss per share of €0.57. “This excellent start to the year confirms, in particular, the relevance of the decisions taken in recent quarters and their successful execution. It is a major milestone for the Group and enables us to approach 2021 with confidence and determination, confirming our ability to achieve our financial targets,” said Group’s Chief Executive Officer Frederic Oudea. Nick Note: This is a global boom and you need to grasp the reality here. Reality is this is the START of the boom NOT the end!

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S&P 500 Index: Earnings upgrades to drive further upside – DBS Bank

Strong corporate earnings underline the resilience of US equities

Riding on the tailwinds of robust macroeconomic data and strong corporate earnings, the rally in the S&P 500 Index remains unabated. The strong showing displayed by US corporates in the 1Q21 reporting season suggests that the positive momentum will persist, according to economists at DBS Bank. “87% reported positive earnings surprise and the momentum was particularly strong in sectors like Technology (97%), Consumer Discretionary (93%), and Financials (93%).” “Actual earnings exceeded consensus forecast by 23% in aggregate. The strongest earnings beat is seen in the following sectors: Consumer Discretionary (62%), Financials (37%), and Communications Services (35%).” “Given the strong set of earnings in 1Q21, we believe that there is a compelling case for upward earnings revisions in coming months. Market consensus is expecting US earnings to grow 48.1% in 2021, underpinned by a combination of moderate top-line growth and substantial margin expansion.”  “As the US economic recovery gathers momentum, top-line revenue will likely come in stronger than expected in the coming months.” Nick Note: Do not be shaken… Stick to your guns. We are about to see the greatest boom time economy ever. And a huge i mean humongous stock market rally…