This was one Wednesday that did not mess around. Yesterday, the U.S. economy let out its first truly big roar of 2021.
America’s big banks blew the doors off with massive earnings. Luxury-goods stocks hit record highs. Planes are flying. Oil demand is back. Heck, people have even stopped hoarding toilet paper.
Dimon Out of the Rough
A year ago, America’s big banks battened down the hatches in anticipation of a coronavirus-induced recession. Now, with over 35% of Americans vaccinated, bank executives see boom times ahead:
- On Wednesday, Wells Fargo announced it earned $18.1 billion in the first quarter, versus $17.5 billion expected by analysts. JP Morgan Chase handily beat expectations with $33.1 billion, versus $30.5 billion expected.
- Both banks released billions in emergency reserves from last year, signaling confidence in the durability of the recovery.
JP Morgan CEO Jamie Dimon took an upbeat tone on the earnings call. He described consumers as “coiled” with “$2 trillion in more cash in their checking accounts than they had before Covid.”
He went on, “With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth.”
Pain for Pleasure
It’s not just the fundamentals, either. With a year of pandemic pain out of the way, it’s already clear that the new normal will include the luxuries of old:
- People still want their $1,200 purses. Luxury industry shares hit a record high Wednesday, after Louis Vuitton reported $16.8 billion in first quarter sales, an 8% increase over pre-pandemic 2019, driven by U.S. and Chinese demand.
- People also want their summer tans. American Airlines said yesterday it expects to fly at 90% domestic seat capacity this summer, and 80% internationally.
To cap it off, the International Energy Agency said the “decidedly stronger” economy will drive oil demand up to 5.7 million barrels a day this year, after prices tumbled to record lows in 2020.
Compared to last year, toilet paper sales fell 32.7% in the first three months of 2021. Paper towels fell 18.3%, and wet wipes fell 15.7%.