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Good Morning!
Happy Tuesday! It is a busy day in the markets:
👉 Consumer spending is strong
👉 United Health earnings are in
👉China’s economy grew
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CONSUMER: Spending Is Strong
Despite rising inflation in March, consumer spending remained strong, exceeding expectations with a 0.7% increase in retail sales, according to the Commerce Department. This growth was higher than predicted and outpaced the inflation rate of 3.5% for the month. Excluding cars, retail sales rose 1.1%, and the core control group, important for GDP calculations, matched this increase.
Source: AP
Higher gas prices contributed to the overall rise in retail sales, with a notable 2.1% increase at service stations. Online sales led the growth, up 2.7%, while other retail sectors also saw gains. However, some areas like sporting goods and electronics reported declines.
🎯 GRIT TAKE: Robust consumer spending…upgrade to VIP now to read the full GRIT Take!
EARNINGS: United Health
UnitedHealth Group exceeded first-quarter revenue expectations, despite challenges from a cyberattack on its subsidiary, Change Healthcare. Revenue grew by 9% to $91.9 billion, but a $7 billion charge from selling its Brazil operations and the cyberattack impacts led to a net loss of $1.53 per share. The cyberattack is expected to reduce earnings by $1.15 to $1.35 per share for the full year.
Source: WSJ
UnitedHealth's medical cost ratio, which measures spending on medical costs as a proportion of premium income, was slightly higher than expected at 84.3% due to the cyberattack. Shares of UnitedHealth rose over 6% in premarket trading, although they are down about 15% for the year. The company's two divisions, Optum and UnitedHealthcare, both reported revenue growth, driven by an increase in services and number of people served.
CHINA: Economy Grew
China's economy grew faster than expected in the first quarter, but signs suggest potential challenges ahead. The GDP increased by 5.3%, mainly due to strong performance in the first two months. However, March saw weaker retail sales and industrial production.
Source: CNN
Despite global demand boosting manufacturing, issues like a persistent real estate downturn and declining factory prices indicate deeper economic problems, including deflation and overcapacity. Concerns about economic momentum continue to affect regional markets that caused significant drops in Asian stocks and emerging market currencies. Recent data also highlighted the uneven nature of the recovery. While sectors like integrated circuits and new-energy vehicles grew rapidly, cement production suffered its largest drop since 1995, reflecting the ongoing housing slump.
Headlines You Need To Know: 🎙
Bank of America profits drop
Morgan Stanley earnings snapshot
Johnson & Johnson tops quarterly profit
Israel’s war cabinet is making final decision
China’s overcapacity is backfiring
Chart of the Day
📊 The Cost of College In The U.S.
Source: CNBC
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Source: @ebit.dank
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