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Today in the Market (1/18/2023)

Good Evening! The government’s monthly data on retail sales revealed a downturn in consumer purchasing activity on Wednesday, but reading on wholesale inflation revealed a decline in prices.

After reversing previous gains, the S&P 500 fell 1.56%, while the Dow Jones dropped 1.81%. The Nasdaq Composite lost 1.24%.

POSITIVE EARNINGS BUT STILL DOWN

United Airlines (UAL) shares are trading lower on Wednesday even after the company beat profit and revenue projections despite rising airfares and robust demand.

  • Revenue: $12.40 Billion vs. $12.20 Billion expected
  • Earnings Per Share: $2.46 per share vs. $2.10per share expected  

Going forward! The airline has expressed confidence that it would meet its financial goals for this year. United anticipates first-quarter revenue that is 50% higher than the same period last year and profitability between $0.50 – $1, above analyst projections of $0.25. United intends to increase capacity by around 20%, which is still a drop of about 2.5% compared to 2019.

FUNERALS > BABY SHOWERS!

china, beijing, tiananmen-4644682.jpg

China had its first population decline in nearly six decades in 2022, according to official data. The last time this occurred was in 1960 when the disastrous Great Leap Forward economic program (30-45 million Chinese civilians died as a result of starvation, execution, and forced labor, as well as huge economic and environmental degradation.) resulted in severe famines.

What is causing the decline? The birthrate in China has been declining for years, hitting a record low in 2022. Observers attribute this phenomenon to the expensive cost of motherhood, strict Covid lockdowns, and decades of the one-child policy. Which resulted in funerals exceeding baby showers by around 850,000 last year.

What would this mean if the decline continues? If the economy of the world’s second-largest country were to fall, the rest of the globe would also be affected. Fewer employees in the exporting powerhouse of China might result in higher prices for global customers and a decline in demand for goods and services imported from elsewhere.

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