News

Shares of Delta Airlines are up 6.7% shortly after the open after a strong earnings forecast revealed the US consumer are spending again.

The company reported:”

• Earnings per share: $1.71 adjusted vs. $1.53 expected
• Revenue: $15.2 billion adjusted vs. $15.06 billion expected

The numbers for Q3 were stronger than expected but the real driver is the Q4 forecast, with the company seeing $1.60-$1.90 compared to the consensus at $1.65.

There was a spring swoon, Delta CEO CEO Ed Bastian said in an interview with CNBC. “Starting in July, cash sales picked up.”

The way he outlined it, consumers pulled back around Liberation Day but as trade deals started to come, so did the spending.

“The uncertainty started to clear and people got back out on the road,” he said.

He said in Q2, domestic sales were down 5% but Q3 is up 2% and the momentum has continued into Q4. He also noted that corporate travel was up 8% in Q3 compared to 1% in Q1 and Q2.

This was also revealing:

“There are two consumers out there, fortunately we’re focused on the premium consumer,” he said. “The lower end consumer is clearly struggling.”

In terms of holiday travel, he said it was early but looking good.

I take all of this as a great sign of the US consumer and think airlines are a very interesting spot because they benefit from both the aging demographic (which is wealthy) and the schism between rich and poor.

I touched on airlines yesterday in a post where I highlighted how older US cohorts will continue to spend. The JETS ETF of airlines is up 2.9% today.

The boomers are absolutely flush and
will continue to spend for at least the next 10 years. It breaks all the
economic correlations because their spending has virtually zero
correlation with employment. There is a huge opportunity in markets to
figure out how this will play out.

I think
it’s ultimately inflationary, particularly in an anti-immigrant setting
but there are many knock-ons. One spot that comes to mind is travel and
airlines, which remain cheap parts of the market that I suspect will be
more resilient than the have been in past downturns (whenever a downturn
comes).

This article was written by Adam Button at investinglive.com.

The Trump administration is under fire for refusing to make public investigative files about Jeffrey Epstein, a former friend of President Donald Trump.

The Euro (EUR) edges higher against the Swiss Franc (CHF) on Thursday, erasing earlier losses after a volatile start to the day.

Yesterday in the USDCAD, traders tried to stretch the market out of its narrow box—but both attempts failed. First, the pair extended its 30-pip range to the upside, only to run out of steam – quickly. Then it broke lower, extending to the downside, and that too fizzled. The net effect? The 5-day trading range has only widened slightly, from about 30 pips to roughly 40 pips—hardly impressive and still extremely narrow.

That failure on both ends doesn’t change the broader takeaway: when ranges get this tight, the market is primed for a break. Right now, the 5-day high sits near 1.3971 and the low is anchored at 1.3931. A decisive move beyond either of those boundaries could trigger momentum and a directional run.

In the meantime, traders are left watching a cluster of key moving averages—including the 200-day, plus the 100- and 200-hour MAs—all packed into the zone between 1.39427 and 1.3953. That tight confluence is acting as a short-term bias barometer, and whichever side of it holds could help define the next tilt in sentiment.

This article was written by Greg Michalowski at investinglive.com.

USD/JPY dipped on this comment.

• Says Japanese bonds are overwhelmingly held by domestic investors, Japanese bond market is the most-stable in the world
• There are both benefits and demerits in a weak yen, which provides buffer for exports but pushes up imports

This article was written by Adam Button at investinglive.com.