By Ciara Linnane, MarketWatch
Wuhan, Former Pandemic Center, Emerges as Tourist Hot Spot
Wuhan, the city at the center of the coronavirus pandemic, had the most tourists of any Chinese city during a public holiday in October. Wuhan is overcoming its pandemic past and benefiting from its hero-city status to become a top travel destination. Photo: Getty Images
The number of confirmed cases of COVID-19 world-wide now stands at 41.3 million, Johns Hopkins data shows, and the death toll is 1.13 million. At least 28 million people have recovered from COVID-19.
Brazil has the second highest death toll at 155,403 and is third by cases at 5.3 million. India is second in cases with 7.7 million, and third in deaths at 116,616.
Mexico has the fourth highest death toll at 87,415 and 10th highest case tally at 867,559.
The U.K has 44,248 deaths, the highest in Europe and fifth highest in the world, and 792,194 cases.
China, where the disease was first reported late last year, has 91,055 cases and 4,739 fatalities, according to its official numbers.
What’s the economy saying?
The number of Americans who lost their jobs and applied for unemployment benefits in mid-October slid by 55,000 to a new pandemic low of 787,000, but the decline stemmed in part from fewer new claims in California after a temporary applications freeze, MarketWatch’s Jeffry Bartash reported.
Initial jobless claims filed through state programs fell below the 800,000 mark for the first time since the coronavirus epidemic began in March, the Labor Department reported Thursday. Economists polled by MarketWatch had forecast new claims to be 860,000 in the week ended Oct. 17.
New claims in the prior week were also revised down to 842,000 from 898,000 in an unusually large revision.
What makes the latest report harder to decipher was the inclusion again of new jobless claims from California after a two-week pause. The state stopped accepting applications temporarily to work down a large backload, update its computer systems and install new fraud-detection measures. The updated figures from California contributed heavily to the large downward revision two weeks ago.
California said new jobless claims totaled an unadjusted 158,877 in the past week, down from 176,083 two weeks ago. The state’s numbers had been frozen at 226,179 in the U.S. Labor Department’s national summary while it worked to improve its unemployment-compensation system. California typically accounts for almost 20% of all new jobless claims in the country, but it’s run closer to 30% during the coronavirus pandemic
Separately, existing-home sales increased for the fourth consecutive month in September, as the U.S. housing market benefited from low interest rates. Total existing-home sales rose 9.4% from August to a seasonally-adjusted, annual rate of 6.54 million, the National Association of Realtors reported Thursday.
Compared with a year ago, home sales were up nearly 21%. The fast pace of home sales has quickly dwindled the remaining supply of homes on the market, however. The total inventory of homes for sale at the end of the month dropped to a 2.7 months’ supply, the lowest on record.
What are companies saying?
• American Airlines Group Inc. /zigman2/quotes/209207041/composite AAL -2.47% reported a narrower-than-expected third-quarter loss and revenue that fell less than forecast as it continues to struggle with lower demand for travel during the pandemic. The company swung to a net loss of $2.40 million, or $4.71 a share, from net income of $425 million, or 96 cents a share, in the year-ago period. Excluding non-recurring items, the adjusted per-share loss was $5.54, beating the FactSet loss consensus of $5.86. Revenue dropped 73.4% to $3.17 billion, but was above the FactSet consensus of $2.81 billion. Load factor fell to 57.9% from 86.6%, as traffic declined 74.2% while capacity dropped 61.5%. For the fourth quarter, the company expects capacity to be more than 50%, with long-haul international capacity down about 75%.
• AT&T Inc. /zigman2/quotes/203165245/composite T +0.62% reported a third-quarter adjusted profit that matched expectations, while revenue fell less than forecast during the pandemic. Postpaid subscriber net additions were 1.1 million, with phone net adds of 645,000, while prepaid subscriber net adds were 245,000. Total postpaid churn was 0.85%, with postpaid phone-only churn was 0.69%. Communications revenue fell 3.1% to $34.3 billion but beat the FactSet consensus of $33.6 billion, and WarnerMedia revenue dropped 10.0% to $7.5 billion but beat expectations of $7.3 billion. The company sees fourth-quarter revenue being hurt by the partial closure of movie theaters and postponement of theatrical releases as a result of the COVID-19 pandemic, and by the decline in international roaming wireless services revenue due to reduced travel.
• Coca-Cola Co. /zigman2/quotes/209159848/composite KO +0.60% reported third-quarter earnings and revenue that beat expectations. Revenue improved compared with last quarter, but continues to feel the pressure of the declines in away-from-home channels like movie theaters and sporting events during the pandemic. The company continues its revamp, which includes a 50% reduction in the number of brands in its portfolio. It has already announced that Odwalla juices, Zico coconut water and Tab diet soda will be discontinued. Coca-Cola did not provide detailed guidance due to uncertainty from the pandemic.
• Kimberly-Clark Corp. /zigman2/quotes/201766540/composite KMB +3.25% reported third-quarter earnings that missed Street estimates. Sales dropped in the professional segment of the business due to the pandemic. “While earnings in the quarter were down as expected, we’re raising our full-year outlook and now expect adjusted earnings per share will grow 9%-to-11% this year,” said Mike Hsu, Kimberly-Clark chief executive, in a statement. Kimberly-Clark expects 2020 adjusted EPS of $7.50 to $7.65 up from previous guidance for $7.40 to $7.60. And sales are expected to increase 2% to 3%. The FactSet consensus is for EPS of $7.71 and sales of $18.88 billion, suggesting a rise of 2.3%. Kimberly-Clark’s company restructuring is expected to be complete in 2021 with total charges at the high end of the range of $1.70 billion and $1.90 billion. The revamp is expected to produce an annual pre-tax savings of $500 million to $550 million.
• Netgear Inc. /zigman2/quotes/204742131/composite NTGR +2.26% reported fiscal third-quarter results that soundly beat Wall Street estimates. Netgear reported net income of $25.5 million, or 85 cents a share, compared with net income of $12.5 million, or 41 cents a share, in the year-ago quarter. Revenue shot up 42% to $378.1 million from $265.9 million a year ago. Analysts surveyed by FactSet had expected net income of 66 cents a share on revenue of $314 million. Netgear shares are up 49% this year as it continues to feel the effects of the pandemic.
• Quest Diagnostics Inc. /zigman2/quotes/201001842/composite DGX +0.41% beat third-quarter earnings estimates and raised guidance, buoyed by demand for COVID-19 testing. “Quest had a very strong third quarter, benefiting from continued demand for COVID-19 testing and the rapid recovery of health care utilization,” Chief Executive Steve Rusckowski said in a statement. “Quest Diagnostics. “Quest has performed over 22 million COVID-19 molecular and serology tests to date, more than any other provider.” The company is seeing signs that the health care system is returning to pre-pandemic levels, as base testing volume, excluding COVID-19 molecular and antibody testing, continued to recover through the quarter. “We are grateful for the CARES Act funding that provided our company with support earlier this year at a time of great uncertainty for our nation,” said Rusckowski. “Several months into this pandemic, we do not require this funding. As a result, we believe returning these funds to the government now is the right thing to do.” The company raised its guidance and now expects revenue to range from $8.8 billion to $9.1 billion, up from prior guidance of $8.4 billion to $8.8 billion. It expects adjusted EPS of $9.00 to $10.00, compared with prior guidance of $7.50 to $9.00. The FactSet consensus is for EPS of $8.82 and sales of $8.8 billion.
• Southwest Airlines Co. /zigman2/quotes/201071949/composite LUV -3.73% reported a narrower-than-expected third-quarter loss as revenue fell less than forecast, though the airline continues to struggle with lowered demand for travel during the pandemic. Revenue dropped 68.2% to $1.79 billion, above the FactSet consensus of $1.70 billion, as monthly declines lessened in each month of the quarter. Load factor fell to 44.9% from 83.5%, but beat the FactSet consensus of 43.4%, while passenger revenue per available seat mile (PRASM) declined 58.7% to $5.49 but topped expectations of $3.45. The company reduced its October revenue decline guidance range to 65% to 70% from 65% to 75% and raised its load factor outlook to 50% to 55% from 45% to 55%.