Stimmy Checks Bring Record Personal Income: +21.1%

Friday, April 30, 2021

We close both the month of April and the trading week on a downward trajectory, despite often excellent Q1 earnings reports from some of the biggest companies on Wall Street, and economic metrics enhancing expectations — indeed, realizations — of a Great Reopening. Yet investors are starting to feel the thinner air up near all-time highs, and appear cautious to be bidding up much further from current valuations.

The economic reports continue this morning, as well: Personal Income for March stretched to a new record high on government stimulus checks: 21.1%, from a slightly upwardly revised -7.0% for February. These figures reach all the way back to 1959, and only twice before has this monthly read ever gotten above 10% — both within the past year. Consumer Spending, however, also for March, was +4.3% — still higher than expected, but far from the income heights.

Part of this spending performance has to do with the still-shuttered parts of the retail economy. But those days are vanishing before our eyes. Last month, Goods gained a solid +8% but Services was only +1.7%; we expect this to even out in the coming months.

Meanwhile, Core Inflation for March reached +0.4%, beating expectations of +0.3% and notably higher than +0.1% posted a month ago. This is another sign that we are entering a new economic era at last; for more than a year, the Fed has basically dared inflation to make an appearance in the U.S. economy. Should we see 30-basis-point gains every month, we’ll be back to discussing higher interest rates before we know it.

The Employment Cost Index for Q1 also came in higher than expected: +0.9% versus +0.7% estimated and reported in Q4 2020. This would indicate hiring back employees into the workforce is beyond the low-hanging (low wage) fruit, and/or that paying employees more may be the way forward for companies ensuring their workforce is of acceptable quality.

Not to be forgotten — and rather quickly — let’s run through a few key calendar Q1 earnings reports posted here at the end of the week:

Zacks Rank #1 (Strong Buy)-rated ExxonMobil XOM beat expectations on both top and bottom lines: 65 cents per share topped the Zacks consensus by 6 cents on $59.15 billion in revenues, which outperformed estimates by 7.24%. Shares are trading down a bit in the pre-market, but are +43% year to date. For more on XOM’s earnings, click here.

Exxon rival Chevron CVX in the integrated oil super-major category, missed the Zacks consensus by 2 cents to 90 cents per share. Revenues of $32.03 billion, on the other hand, topped expectations by 3.66%. Weakness in volume affected by the winter storm in Texas was the main headwind in the quarter. For more on CVX’s earnings, click here.

Phillips 66 PSX narrowed its bottom line loss per share to -$1.16 from the -$1.41 per share expected, on $21.93 billion in revenues which outperformed estimates by nearly 30%. Shares are trading down in a weak pre-market, but had been +16% year to date. For more on PSX’s earnings, click here.

Fiscal Q3 numbers for Clorox CLX also surpassed expectations on its bottom line: $1.62 per share versus $1.47 (also down from the $1.89 per share reported in the year-ago quarter), though revenues of $1.78 billion missed the Zacks consensus by 4.7%. The Oakland, CA-based cleaning products giant are trading down, now more than -11% year to date. For more on CLX’s earnings, click here.

Questions or comments about this article and/or its author? Click here>>

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
The Clorox Company (CLX) : Free Stock Analysis Report
 
Phillips 66 (PSX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report