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Wednesday January 19, 2022



United Airlines Releases Earnings Report

United Airlines Holdings, Inc. (UAL) posted its fourth-quarter and full-year earnings report on Wednesday, January 20. The airline continues to fall short of the prior year's numbers due to the COVID-19 pandemic.

The company reported total operating revenue of $3.4 billion for the quarter, down 68.7% from the prior year's quarter. For the full year, United reported revenue of $15.4 billion, down from $43.3 billion in 2019.

"Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making," said United Airlines CEO Scott Kirby. "But, the truth is that COVID-19 has changed United Airlines forever. The passion, teamwork and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that's better, stronger and more profitable than ever."

United posted a net loss of $1.9 billion during the quarter, down from net income of $641 million during the same quarter last year. For the full year, the company reported a net loss of $7.1 billion, down from $3.0 billion in net income for 2019.

United Airlines measures its capacity in available seat miles, which equals the number of available seats multiplied by miles flown. For the fourth quarter, United's available seat miles fell 56.8% from the same quarter last year. For the full year, available seat miles fell 56.9%. Total revenue per available seat mile fell 27.5% during the quarter and 17.7% for the full year.

United Airlines Holdings, Inc. (UAL) shares ended the week at $42.14, down 5.5% for the week.

Bank of America Reports Earnings

Bank of America Corporation (BAC) released its latest quarterly and full-year earnings on Tuesday, January 19. The company's revenue and net income fell year-over-year.

Revenue came in at $20.1 billion during the fourth quarter, down from $22.3 billion at this time last year. For the full year, the company reported revenue of $85.5 billion.

"During 2020, we witnessed the dramatic effects of the health crisis on the economy and our company's operations," said Bank of America CEO Brian Moynihan. "In the fourth quarter, we continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers, and strong markets and investing activity."

The company reported net income of $5.5 billion for the quarter, down from $7.0 billion last year at this time. For the full year, Bank of America posted $17.9 billion in net income.

Bank of America's Consumer Banking segment brought in net income of $2.6 billion during the quarter. In addition, it originated 343,000 Paycheck Protection Program loans during 2020 with total outstanding balances at $23 billion. The segment also noted a 23% increase in deposits for the quarter, up to $885 billion.

Bank of America Corporation (BAC) shares ended the week at $31.55, down 2.9% for the week.

Procter & Gamble Posts Quarterly Earnings

The Procter & Gamble Company (PG) reported its second quarter earnings on Wednesday, January 20. The company posted an increase in net sales for the quarter.

Net sales for the quarter were $19.7 billion. This was an 8% increase from $18.2 billion during the same quarter last year.

"We delivered another strong quarter of results across all key measures – top line, bottom line and cash," said Procter & Gamble CEO David Taylor. "We remain focused on executing our strategies of superiority, productivity, constructive disruption and improving P&G's organization and culture."

The company reported net earnings of $3.9 billion for the quarter. This was up from $3.7 billion in net earnings last year at this time.

The Cincinnati, Ohio-based company, offers a variety of popular brands, including Crest, Dawn, Febreze, Gillette, Tide, Pampers and others. The company's Fabric & Home Care segment posted $6.5 billion in net sales, up 12% from the same quarter last year. The Baby, Feminine & Family Care segment and Beauty segment each posted 6% sales increases for the quarter.

The Procter & Gamble Company (PG) shares ended the week at $130.00, down 4.2% for the week.

The Dow started the week at 30,887 and closed at 30,997 on 1/22. The S&P 500 started the week at 3,782 and closed at 3,841. The NASDAQ started the week at 13,133 and closed at 13,543.

Treasury Yields Dip Slightly

Yields on U.S. Treasurys inched downward this week following the presidential inauguration. Investors appear to be cautiously awaiting news related to a potential third round of stimulus payments.

On Wednesday, Joe Biden was sworn in as the 46th President of the United States and Kamala Harris was sworn in as the nation's first female Vice President. Following the festivities, the President got to work, signing a number of executive orders from the Oval Office.

The yield on the 10-year Treasury note peaked on Wednesday at 1.121% before falling to 1.093% during trading on Friday. The 30-year Treasury bond yield reached a high of 1.873% on Tuesday and was down to 1.853% on Friday.

The President has outlined a $1.9 trillion COVID-19 relief plan, which would provide an additional payment of $1,400 for eligible individuals. However, despite Democratic control of both chambers of Congress, questions remain regarding the likelihood and timing of the relief package becoming law.

"I think that they built [the plan] from the bottom up and the number ends up at $1.9 trillion," said Tony Fratto, former White House aide. "The big exception, though, is on checks. That was not a bottom-up thing, that was something that came out of Trump pushing for $2,000 checks."

The 10-year Treasury note yield closed at 1.09% on 1/22, while the 30-year Treasury bond yield was 1.86%.

Mortgage Rates Drop

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, January 21. The report showed a slight change in rates from the prior week.

The 30-year fixed rate mortgage averaged 2.77% this week, down slightly from 2.79% last week. At this time last year, the 30-year fixed rate mortgage averaged 3.60%.

This week, the 15-year fixed rate mortgage averaged 2.21%, down from last week's average of 2.23%. Last year at this time, the 15-year fixed rate mortgage averaged 3.04%.

"Mortgage rates have hovered near historic lows for almost a year, fueling purchase and refinance activity amid a global health crisis," said Freddie Mac's Chief Economist, Sam Khater. "We're now seeing rates fluctuate a bit as political and economic factors drive Treasury yields higher. However, we forecast rates to remain relatively low this year as the Federal Reserve keeps interest rates anchored near zero for a longer period of time, if needed until the economy rebounds."

Based on published national averages for the week of 1/19, the national savings rate was 0.05%. The one-year CD averaged 0.15%.

Published January 22, 2021

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