I imagine that the most-underrated supply of data on the economic system is from company convention calls, significantly these which can be most-sensitive to macro. I went by way of the calls of 16 corporations that reported this week and located the feedback about macro well being, client demand and the outlook.
Listed here are the highlights.
Citi:
- The US client is described as “wholesome but extra discerning.”
- U.S. client dynamics stay in line with prior quarters, with clients being wholesome however extra discerning of their spending.
- “International financial efficiency continues to be surprisingly resilient”
- Europe is experiencing a modest rebound however continues to wrestle with structural challenges round competitiveness.
- “ASEAN, Japan, the Center East, Mexico and Brazil are all notable shiny spots globally.”
- China’s client sentiment and property market stay issues
- Decrease discretionary spending is impacting our retail companies portfolio
- Indicators of stress are remoted to customers with decrease FICO scores.
Proctor & Gamble (simply completed):
- North America natural gross sales grew 4%
- Larger China natural gross sales declined 15% as a consequence of weak market circumstances
- Anticipate China to take just a few extra quarters to return to progress
- Sustaining full yr natural gross sales progress steering of 3-5%
American Categorical (name simply completed):
- Transaction quantity grew 9%, indicating continued buyer engagement
- US client spending remained very secure, with sturdy progress from Millennial and Gen-Z clients (up 12%)
- Restaurant spending, a key class for Amex, grew 7% in Q3 versus final yr
- Airline spend accelerated barely from 5% to six% progress
- Delinquency charges stay very low and in keeping with prior quarters
- The corporate expects continued secure spending tendencies in Q
- Administration believes there’s capability for elevated spending if client and small enterprise confidence improves, raised EPS steering
- “The U.S. client, simply to select the U.S. client has been actually secure. I imply, it has been nearly 6% for the previous couple of quarters.”
- “We’re not seeing something that will point out our credit score metrics are getting any worse. The truth is, you noticed write-offs go sequentially down.”
WD-40:
- The corporate offered steering for fiscal yr 2025 projecting 6-11% internet gross sales progress
- The US skilled strong point-of-sale demand in This fall, although gross sales had been down in comparison with an exceptionally sturdy This fall final yr.
Johnson & Johnson:
- Talked about macroeconomic pressures in Japan, with out specifying particulars
- Elevated its adjusted operational gross sales progress steering for 2024
US Bancorp:
- Asset high quality metrics remained secure, reflecting “ongoing macroeconomic stability.”
- Bank card mortgage balances elevated and revolver charges improved.
- Administration famous “improved underlying market circumstances” contributing to progress in some payment earnings classes.
Metal Dynamics:
- Administration is constructive and optimistic in regards to the metal market and demand atmosphere heading into 2025
- Underlying metal demand stays regular
- North American automotive manufacturing estimates for 2024 had been just lately revised to secure manufacturing over the following a number of years
- They imagine fee cuts will unlock pent-up demand in housing
- AI and cloud computing ought to help nonresidential development by way of knowledge middle buildout
- There’s a important deficit in aluminum provide in North America, which is anticipated to develop significantly
Financial institution of America:
- Exercise is ok total, although customers are cautious of value of dwelling will increase and better charges.
- Industrial enterprise tendencies in line with a decrease progress economic system.
- Companies wish to develop however are being extra cautious as a consequence of issues about closing demand
- CEO: “an economic system that continues to be secure, albeit with slower progress and falling inflation.”
- Shopper credit score losses declined as anticipated
- Anticipate a moderating rate of interest atmosphere to unlock pent-up undertaking work and create new alternatives in 2025
PNC Monetary Providers Group:
- The economic system is described as “fantastic” with customers nonetheless spending.
- Industrial mortgage demand stays smooth, with utilization charges nonetheless low and beneath historic averages
- Firms are dealing with some margin stress as they cannot move on worth will increase as simply
- There’s dialogue of cost-cutting, however this hasn’t translated to important layoffs but
PPG Industries:
- PPG sees a difficult macroeconomic atmosphere persevering with, with blended demand throughout sectors
- Auto OEM trade, significantly within the U.S. and Europe, has seen unscheduled extended downtime, referred to as it a “speedy decline”
- PPG expects this downturn to proceed into This fall, however anticipates an uptick in 2025 based mostly on buyer suggestions and IHS projections.
- Common industrial exercise within the U.S. and Europe stays lackluster and blended by finish use.
- Aerospace sturdy and anticipated to remain sturdy in 2025
- PPG notes ample provide of their provide chain for 2025, which ought to assist to maintain costs down
Blackstone:
- Blackstone is seeing indicators of restoration in industrial actual property
- Blackstone expects elevated M&A and IPO exercise in 2025 as debt prices come down and fairness markets stay sturdy
Insteel Industries:
- Market circumstances remained sluggish in This fall, with weak order backlogs contributing to plant inefficiencies.
- The corporate is being affected person somewhat than attempting to stimulate demand by way of worth reductions
- For fiscal 2025, they anticipate a gradual enchancment in development finish markets, although present indicators are blended
CSX:
- Weak point in metals and automotive markets
- Seeing power in chemical substances, agriculture, forest merchandise, and minerals
- Anticipate modest quantity progress in This fall
- Anticipate advantages from infrastructure spending and potential enchancment in trucking market
Autoliv:
- International gentle automobile manufacturing declined practically 5% in Q3
- Seeing manufacturing cuts in North America, Europe and Asia (ex-China) as a consequence of gradual automobile gross sales and stock changes
- Expects a 9% decline in European gentle automobile manufacturing for This fall.
Alcoa:
- In aluminum, world demand is at report ranges. Particularly in North America and Europe, the packaging section is recovering.
- The transportation market total has been regular with some slowing of progress throughout the automotive sector. For constructing and development, it has been a difficult yr, however fee cuts in Europe and within the U.S. are doubtless to supply some help for a restoration sooner or later.
- Once you examine energy in Spain versus Germany and France, Spain is essentially uncompetitive.
Morgan Stanley (principally referring to the wealth administration enterprise right here)
- So evidently, the markets are enhancing. You are seeing momentum within the economic system. Uncertainties are lifting. And retail purchasers are engaged, each from searching for recommendation, but additionally coming to the platform as new purchasers, which I feel is a very good pattern to observe.
Collective takeaways from me:
- The US economic system is secure with the principle stress on bottom-quartile customers
- China and Europe face challenges and are smooth
- Manufacturing and automotive sectors face ongoing challenges, significantly in Europe and North America.
- Price-sensitive sectors like housing and automotive are underneath stress
- Inflation pressures are easing however stay a priority for companies
- There may be optimism for 2025 as a consequence of fee cuts
I do not suppose there’s a lot to fret about right here as fee cuts ought to assist in the smooth spots and post-election uncertainty ought to raise, although politics had been hardly talked about. As this week’s retail gross sales report confirmed, the patron is ok.
