Hello, this is James Mayer, Branch Manager, from the Huffman Mayer Wealth Management Group of Wells Fargo Advisors.  We hope you all had a wonderful holiday weekend and are ready for the summertime heat. We appreciate you tuning in for May’s edition of “The Market Recap”. Let’s see what Phil has to say!

 

Thanks James.

 

·         According to FactSet, with 93% of companies having reported 1Q24 results, 60% have beat on the top line and 78% have beat at the earnings level. That said, corporate outlook is deteriorating somewhat, with 59% of companies that issued earnings guidance expecting results below the Wall Street consensus for 2Q24.

·         Inflation has perhaps been the most watched economic metric over the last 4 years, as it effects consumers, corporate margins, and the Fed’s decisions on rates. Inflation rose at a y/y rate of 3.4% in April according to the U.S. Bureau of Labor Statistics. According to FactSet, the percentage of S&P 500 companies mentioning inflation on quarterly calls is down to 47% for 1Q24, versus a high of 82% in 2Q22. As a reminder, the Fed generally targets inflation of around 2.0% for “price stability.”

·         According to the International Air Transport Association, passengers have logged 22% more miles on average over the past 6 months than they did for the same 6-month period in 2022-2023. If this growth trend continues, this Summer’s busy months could finally eclipse the record of 823 million kilometers of monthly air travel, which was set in August of 2019.

Graph Source: Intl Air Transport Assoc.

 

In Summary:

1.       The majority of companies are beating 1Q24 estimates on the top and bottom lines. That said, guidance has been underwhelming, with 59% of companies guiding below EPS consensus for 2Q24.

2.       Inflation grew at a 3.4% y/y rate in April, and there has been a marked reduction in mentions of inflation on earnings calls over the past 2 years.

3.       Air Travel continues to recover post-COVID, and if it continues apace, this Summer could see new records set for global kilometers flown.

Now let’s see what James & Ryan have to say.

 

JAMES: Thank you Phil. I know a lot of you are big fans of our currently #1 Cleveland Guardians. I know Ryan is.

 

RYAN: That’s right James. I really am looking forward to these games. I hope we can keep the #1 title.  Are you planning on going to any games this summer?

 

JAMES: I might go to a few, we will have to see how golf plays out.

 

JAMES & RYAN banter…..

 

 

 

We always want to talk with you.  If you feel you know someone who would enjoy this video please feel free to send them the link.

As always stay happy, safe, and healthy and hopefully we will see you very soon.

Huffman Mayer Wealth Management Group of Wells Fargo Advisors

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