Stock traders are ready for the kickoff of Q1 2024 earnings season with many bulls hoping it will turn some attention away from all the inflation worry that’s dominated Wall Street this week.

The season “unofficially” starts today with JPMorgan, Wells Fargo and Citigroup reporting results before markets open this morning. BlackRock and State Street also report this morning.

Big Wall Street banks and others in the financial sector will dominate earnings next week as well. Those highlights include Charles Schwab and Goldman Sachs on Monday; Bank of America, Bank of New York Mellon, Morgan Stanley, and PNC Financial on Tuesday; Citizens Financial, Discover Financial, and US Bancorp on Wednesday; Blackstone on Thursday; and American Express and Fifth Third Bancorp on Friday.

Also worth noting are ASML on Wednesday and Taiwan Semiconductor on Thursday. ASML has a virtual monopoly on the highly specialized machines needed to produce advanced AI chips while Taiwan Semiconductor just got a +$6.6 billion injection from the US government for three new US factories. Strong results from this pair could help boost the bulls ahead of big tech earnings, the bulk of which start rolling the week after next (April 22-26).

Other earnings of interest include JB Hunt, Johnson & Johnson, United Airlines; United Health on Tuesday; Abbott Labs, CSX, and Prologis on Wednesday; Alaska Air, DR Horton, Netflix, Nokia, and SnapOn on Thursday; and Procter & Gamble and Schlumberger on Friday.

Overall, Wall Street remains pretty optimistic about upcoming earnings but with stocks at or near record levels, many also want proof that corporate profits justify this year’s gains. For some of the biggest tech companies, stock prices this year have already climbed by double digits - Google-parent Alphabet and Microsoft are both up over +15%, Amazon is up over +26%, Facebook-parent Meta has gained over +50%, while Nvidia is close to doubling its stock price with a hefty gain of nearly +90%.

On top of the packed earnings calendar next week, investors will also have several key economic reports to digest, including Retail Sales, Business Inventories and the NAHB Housing Index on Monday; Housing Starts & Permits and Industrial Production on Tuesday; the Fed’s Beige Book on Wednesday; and Existing Home Sales on Thursday. 

Don't Forget The Tax Man... Interesting History and Data: April 15th is Monday! If you file an extension, you will have six more months to get your return to the IRS and not be subject to the late-filing penalty. For 2024, this means that, with an extension, you’ll have until October 15, 2024.  Before the Civil War, the government received most of its revenue through tariffs — taxing goods as they came into the ports. This had its limits, though. Essentially meaning, "tariff duties" are a great way to raise money for a country just as long as you're not fighting a war. In the 19th century, war meant blockaded ports, sunk ships — and almost no revenue from tariffs. It was actually during the Civil War, Congress decided it had to try some sort of "income tax." In order to get people to pay, the powers that be devised a clever plan that made tax-returns public record. In other words, the tax returns of even the President were released to the public. In some cases, the competitive nature and honesty of our American ancestors kept many from hiding or lying about their total earnings. They were proud to be donating and supporting their young country.  It was in the 19th century that a few of the wealthy started to realize and make note of the fact "income tax" or in this case supporting our nation, was falling almost exclusively on the rich. In 1895, with the help of some very good lawyers, the wealthy argued all the way to the Supreme Court that "income tax" was unconstitutional. In a vote of 5-4, the Supreme Court agreed. It wasn't until 1913 when Congress and the states amended the Constitution to allow for "income tax," that it once again became law. In 1913 Congress passed a law that allowed them to get around the constitutional issues, and the first Federal Income Tax Day was named March 1, 1914. The rates were 1% on income under $3,000 and up to 6% for the highest incomes. In 1918, the date was pushed to March 15th. It was actually during this year (fiscal year 1918), annual internal revenue collections for the first time passed the billion-dollar mark. The withholding tax on wages was not introduced until 1943 and was instrumental in increasing the number of taxpayers to 60 million and tax collections to $43 billion by 1945. It wasn’t until 1955 that the date was pushed out a month further to April 15th, where it remains to this day.  Some politicians like to argue (in order to gain more votes) that the rich need to pay more of their fair share.  But the latest data from the government show the top 50% of all taxpayers paid 97% of all individual taxes, while the bottom 50% paid the remaining 3%. The top 1% paid a greater share of individual income taxes than the bottom 90% combined. In fact, according to IRS data, the top 10% of earners bore responsibility for 76% of all income taxes paid, and the top 25% paid 89% of all income taxes. Last year, about 59.9% of U.S. households paid some sort of income tax. The remaining 40.1% of households paid no individual income tax.  

Cities That Saw the Biggest Eclipse Boost: Monday’s solar eclipse sold out hotels and Airbnbs all along the path of totality as tourists flocked to see the celestial phenomenon. But early data on spending, foot traffic and road congestion patterns suggest that not all destinations benefited equally. Syracuse, in upstate New York, saw a 28% year-over-year increase in spending at hotels and restaurants for the period from last Friday through Monday, double the US average change of 13.7%. Syracuse and Buffalo experienced a greater boost than most other major US cities in or near the path of totality, according to the data, likely because of their relative proximity to New York City and other East Coast population centers. Ohio was another popular destination in the days leading up the eclipse, with Cleveland seeing a particular boost in spending and foot traffic, perhaps thanks in part to a Cleveland Guardians game that coincided with the eclipse. Weather was likely a big factor in several areas. Among the cities with cloudy forecasts in the days leading up to the eclipse were San Antonio, Memphis and Little Rock in the South, which saw lower foot traffic and spending  Source Bloomberg

Airline Industry Struggling to Find Enough Clean Fuel: In a glimmer of progress for the daunting task of reducing air travel’s climate impact, a newly built plant in rural Georgia is expected to begin pumping out the world’s first commercial quantities of a new type of cleaner jet fuel this month. The $200 million plant from LanzaJet Inc. will be the first to turn ethanol into a fuel compatible with jet engines. The facility is one of many efforts around the globe attempting to crack one of the biggest problems facing greener air travel: finding and developing cleaner feedstocks that can generate enormous quantities of fuel without triggering ripple effects that end up worsening the climate and biodiversity crises. Progress thus far has been very limited. Efforts to produce new types of cleaner fuels require hundreds of millions of dollars. But investors have remained wary with would-be plants routinely suffering lengthy delays and struggling to become operational. At its new facility dubbed Freedom Pines Fuels, LanzaJet plans to produce 9 million gallons of sustainable aviation fuel (SAF) per year. In one sense, that’s just a tiny step forward: It would take 100 of these plants to fulfill just 1% of the ravenous appetite of the world’s commercial air carriers, which consumed 90 billion gallons of jet fuel last year.   Source Bloomberg

Ford Cuts Some EV Truck Prices: Ford cut prices of some variants of its F-150 Lightning electric pickup truck by as much as $5,500, the Detroit automaker said on Thursday, as it navigates a competitive EV market. Demand for EVs has been volatile, prompting automakers to focus on hybrid vehicles instead as consumers prefer the flexibility offered from dual powertrains. Ford's XLT variant will cost $2,000 less at $62,995, while the Lariat variant will now be down 3.14%, carrying a suggested price of $76,995. Prices for its PRO and Platinum variants remain unchanged. The announcement comes after Ford said it was shipping out the new F-150 and Ranger pickup trucks to North American dealers and restarting shipments of F-150 Lightning electric trucks, which it halted in February.  Source Reuters

Food at The Masters Might Be Cheapest in Sports: There’s not much inflation at the 2024 Masters golf tournament’s concession stands. While some Americans may have been alarmed by the hotter-than-expected consumer-inflation report for March, the menu at Augusta National Golf Club, where the Masters is played, has not changed the $1.50 price for its famous pimento cheese sandwich, and no food item costs more than $3. A fan at the tournament could buy one of every item on the Masters menu for less than $70 total. A $6 white wine is the most expensive item on the menu, and a beer is only $6. By comparison, the average National Football League stadium charges roughly $10 for a 16-ounce beer.  Source Market Watch

Hidden Costs of Homeownership Are Skyrocketing: Homeownership affordability fell to its lowest level since the 1980s last year as mortgage rates reached a 23-year high and home prices set new records. Borrowing costs have eased somewhat this year, with the average rate for a 30-year home loan down about a percentage point since October. But other prices related to homeownership keep rising and show little sign of abating. Property taxes and home-maintenance costs are climbing in much of the country. Non-mortgage costs including property taxes, maintenance, utilities, and insurance make up more than half of homeowners’ overall costs, according to a 2022 analysis by Fannie Mae economists. The average property tax for U.S. single-family homes was $4,062 in 2023, up +4.1% from 2022, according to real-estate data firm Attom. Some major metro areas are contending with much bigger increases. In Charlotte, N.C., the average property tax rose +31.5% from 2022 to 2023. In Indianapolis it was up nearly +19%. Meanwhile, home maintenance fees have risen. It cost an average of $6,663 a year to maintain a home in the fourth quarter of 2023, up +8.3% from a year earlier, according to home-improvement tech company Thumbtack. Surging home insurance costs are hitting homeowners hardest of all. The average annual home insurance cost rose about +20% between 2021 and 2023 to $2,377, according to insurance-shopping site Insurify, which projects another +6% increase in 2024  Source WSJ


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