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Airline stocks soared across the board, and the NASDAQ index came out of three consecutive downturns | Barron watches US stocks

Driven by the leading rise in technology stocks, the NASDAQ and the S&P 500 index finally ended three consecutive declines on April 13. The NASDAQ rose more than 2%, and US bond yields fell further.

US stocks closed on April 13. The Dow rose 344.23 points, or 1.01%, to 34564.59 points; the NASDAQ rose 272.02 points, or 2.03%, to 13643.59 points; and the S&P 500 rose 49.15 points, or 1.12%, to 4446.60 points.

The earnings season kicked off, and airline stocks surged across the board overnight

On April 13, companies such as J.P. Morgan Chase, Delta Air Lines, and BlackRock took the lead in announcing results, kicking off the first quarter earnings season for US stocks in the first quarter of 2022.

Dragged down by increased spending and reduced expenses in the Wall Street division, JPMorgan Chase (JPMorgan Chase)'s profit for the first fiscal quarter fell 42% to US$8.28 billion, with earnings of US$2.63 billion per share. Earnings for the same period last year were US$14.3 billion, or US$4.50 per share; revenue fell from US$32.27 billion to US$30.7 billion. The bank also warned of impending economic challenges and announced that it authorized the repurchase of $30 billion of shares. After the earnings report was released, J.P. Morgan's stock price fell by $4.24 to $127.30, or 3.2%.

Asset management company BlackRock (BlackRock) shares fell $1.09 to $715.74, or 0.2%, after the company reported a profit increase in the first quarter but a decrease in assets under management. Goldman Sachs (Goldman Sachs), Citigroup (Citigroup), Morgan Stanley (Morgan Stanley), and Wells Fargo (Wells Fargo) will announce results on Thursday.

Aviation stocks rose strongly after the announcement of Delta Air Lines (Delta Air Lines) earnings report. Delta Air Lines reported quarterly losses, but said it resumed profits in March and is expected to report second-quarter profits. The stock closed up 6.21% to $41.02 on the same day after the earnings report was announced. Aviation stocks then rose, and American Airlines (American Airlines) shares rose by $1.82 to $18.95, or 10.6%. Southwest Airlines (Southwest Airlines) rose $3.23, or 7.5%, to close at $46.05. $Delta Air Lines (DAL.US)$$American Airlines (AAL.US)$$Southwest Airlines (LUV.US)$

“Barron's” reports that after two years of sluggish profits, as travelers hope to make up for time lost during the COVID-19 pandemic, the time for airlines to rebound and benefit from surging travel demand in 2022 is finally coming soon.

According to statistics, over 6.5 million people passed TSA (US Transportation Safety Administration) security checks last weekend (April 9-10), which is only about 500,000 fewer than the same period in 2019. Meanwhile, in March alone, airline spending increased 91% year over year, according to the Bank of America Research's monthly consumer statistics.

According to Bank of America global research analyst Andrew Didora (Andrew Didora), in the first quarter of 2022, aviation stocks returned 4.3%, compared to -4.9% for the same period. DiDora said that despite being affected by Omicron's COVID-19 variant, aviation stocks still performed well in January and February of this year, while their performance in March was slightly lower.

“Given the geopolitical environment and the 36% increase in aviation fuel prices since the end of February, we believe (aviation stocks)'s performance in March and year-to-date is impressive, and shows that the demand environment is very strong as leisure and business travel returns after the COVID-19 variant rages on,” DiDora wrote in a research report.

A-share Hong Kong Stock Express: The rise in the White Horse boosted the confidence of the bulls

On April 14, the rise of the White Marathon led the Shanghai Composite Index to run at a high level throughout the day, boosting the confidence of the bulls. GEM hit a new low in the intraday market, and the Ningde era was weak. On the market, the real estate, coal, and liquor sectors rose strongly. Kweichow Moutai rose 2.26%, Wuliangye rose 5.7%, and Shanxi Fenjiu rose 6.29; Poly Development and the Shaanxi coal industry reached record highs. Shanxi Coking and Jinke Co., Ltd. blocked the rise, and Luzhou Laojiao hit the market for a while.

Looking at the sector, the brokerage, steel, home appliances, catering and tourism sectors are doing well; the vaccine sector is under pressure, Zhifei Biotech and Wantai Biotech both crashed, and the photovoltaic, wind power, and lithium battery sectors were adjusted.

The Shanghai Composite Index closed at 3225.64 points, up 1.22%; the GEM Index reported 2466.29 points, down 0.02%; the Shenzhen Stock Exchange reported 11714.62 points, up 1.27%; the Shanghai and Shenzhen 300 reported 4191.57 points, up 1.25%; Science and Technology Innovation 50 reported 975.57 points, up 1.11%; the Shanghai Composite 50 reported 2928.6 points, up 1.61%; Wandequan A reported 4954.7 points, up 1.18%.

The CITIC Securities Mingming Bond Research Team said that based on the current market situation, they believe the downgrade is likely to be implemented in the near future. The People's Bank of China may announce a downgrade arrangement in the next two days, while not ruling out the possibility of interest rate cuts. The executive meeting of the State Council pointed out that monetary policy tools such as downgrades will be used in due course to further increase financial support for the real economy, especially industries seriously affected by the epidemic, micro, small and medium-sized enterprises, and individual businesses, to make reasonable concessions to the real economy and reduce comprehensive financing costs.

In terms of the China-US dollar spread and exchange rate, the team clearly expects that the trend of narrowing of the China-US dollar spread will continue, and the inversion of the China-US dollar spread may continue for some time. The team believes that the difference between China and the US is not a factor that dominates the RMB exchange rate. The disturbance of the RMB exchange rate is more on an emotional level. The inversion of the spread between China and the US may trigger market expectations of the depreciation of the RMB, and stabilizing the RMB expectations in the future is still the key.

In terms of Hong Kong stocks, the three major indices all recorded gains at the close. The Hang Seng Index rose 0.67%, the State-owned Enterprises Index rose 0.97%, and the Hang Seng Technology Index rose 1.2%.

On the sector side, most of the constituent stocks of the Ke Index rose, with JD Health rising by more than 6%; auto stocks rose strongly; Xiaopeng Motor rose more than 5%, BYD shares rose nearly 5%, NIO Auto rose more than 4%, Ideal Auto rose more than 3%; restaurant stocks soared, Helens rose more than 11%, Haidilao rose 10%, Nai Xue's tea rose more than 8%, and Jiumaojiu rose more than 7%.

Article | Barron's China Market Watch Group

Editor | Leung Mu

An original article from “Barronschina” (Barronschina) may not be reproduced without permission.

(This article is for readers' reference only and does not constitute investment, accounting, legal, or tax advice.)

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