I hope this newsletter finds you well as we move through the first full week in April. To bring you today’s issue we cast a wide net, sourcing granular data from e-commerce, air travel and company earnings quality.
Chief Data Officer, Quandl
Major e-commerce categories show clear divergence. Spending on Animals & Pet Supplies exploded in March, while spending on Apparel & Accessories collapsed. However, we note that both effects show some reversion from the extremes seen 2 weeks ago, perhaps reflecting the beginning of a return to normalcy. Overall e-commerce spending is back to being positive YOY, though not yet at the levels of January and early February.
(Source: Quandl proprietary data — aggregated first-party e-commerce transactions from 250+ online stores accounting for $15B in annual sales, global coverage.)
A more granular inspection of e-commerce sales reveals both obvious and unexpected patterns. The Luggage & Bags category is down considerably, while both Toys & Games and Sporting Goods are up. Health & Beauty remains volatile, as supply and demand for these products changes week to week. At the brand level, we note that cosmetic brands trend relatively well, while many healthcare brands are seeing reduced sales (possibly due to depleted inventories).
(Source: same as above.)
Both actual current passenger counts and indicators of future activity such as searches, clicks and booking page visits have declined dramatically for airlines across the globe. Of particular interest is the timing of these declines. Passenger intent for APAC airlines declined earliest and continues to fall, but the rate of decline has slowed and in some countries and for specific carriers we do see the beginnings of an uptick. EMEA airlines declined next, with budget carriers hit significantly harder than full-service airlines. The decline in booking intent for US carriers was the last to materialize, and remains shallower than other geographies.
(Source: Quandl proprietary data — aggregated first-party customer air travel intent over 70,000 routes for 800 airlines at 4,000 airports. Note: global decline is approximate.)
Tracking passenger booking intent sliced by destination country reveals similar patterns of decline over time. Flights to China fell far before any other country, but there appear to be indications of a rebound. South Korea and Japan have seen flights drop steadily all year long, while European destinations (especially Italy and Spain) have faced steeper declines that began further into the year. The United States saw next to no decrease until early March, dipping late in the month.
(Source: same as above.)
Earnings quality offers an interesting lens through which to view equity performance over the last 15 months, especially when compared with the corresponding window leading up to the global financial crisis in 2008. In both 2007 and 2019 (the post facto high point for the economy and for markets) low- and high-quality stocks initially tracked each other very closely; there was no advantage to be gained from owning quality. However, leading into each crisis we see high-quality begin to outperform. In 2008, high-quality stocks continued to outperform on the way down and throughout the recovery; we shall be watching to see if a similar dynamic plays out during the current period.
(Source: Quandl proprietary data — earnings quality ranking of publicly traded stocks using forensic accounting techniques to determine which companies have earnings that are likely to persist over time.)
* All year-over-year comparisons are versus the same day of the corresponding week for 2019. Certain daily datasets have been intentionally lagged for contractual reasons. If you would like access to the latest data, please contact us.
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Charts and data about the impact of COVID-19 on the economy, from Quandl and other real-time sources.
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