United Airlines’ two predictions reflect turbulence

Airplanes are one of the few modes of transport that lead you in almost straight lines from your hometown to your destination. But United Airlines, one of the largest airlines in the United States, does not have the luxury of a direct route when it comes to forecasting its finances. The airline on Tuesday provided two annual revenue estimates. One is the original due to January. The other is a newly revised forecast if there is a recession.

On the one hand, it is recognized that it is impossible to predict the economy. Consider the number of analysts who are sure the recession will attack the US in 2023. On the other hand, it is rare for businesses to do so.

However, volatility appears to be calming for now, according to the VIX, which is considered the CBOE volatility index or Wall Street’s “horror gauge.” Stocks retreated on Tuesday, but compared to last week’s huge plunge, they were at a marginal drop. The journey is relatively smooth right now, but as United Airlines’ extraordinary movement suggests, turbulence may still be ahead.

Market Volatility Retreat
US stocks skated on Tuesday. S&P 500 Decrease of 0.17% Dow Jones Industrial Average Lost 0.38% Nasdaq Composite It was just below 0.05%. VIX It fell to about 30 after hitting a high of around 60 last week. Regions of Europe Stoxx 600 The index rose 1.63%. LVMH The stock sank 7.8% after the company reported Monday a 3% decline in first quarter sales, a 3% year-on-year increase, causing a loss of analysts’ expectations for slight growth.

Nvidia charges $5.5 billion
nvidia The shares fell around 6% after the company said on Tuesday it needed a quarterly bill of about $5.5 billion related to exporting H20 graphics processing units to China and other destinations. On April 9, the US government told NVIDIA it needed a license to export chips to China and a few other countries, the company said in its submission. The H20 is a Chinese AI chip designed to comply with US export restrictions.

Rare Earth Control in China
Amidst China’s Trump tariffs, Beijing imposed export restrictions earlier this month on seven major rare earth elements used in defense, energy and automotive technology. The Center for Strategic International Studies reports that if China’s trade control leads to such a halt of exports, the US cannot fill the gap. This could threaten Washington’s military capabilities.

Estimating revenues in a recession
United Airlines It took the extraordinary step of reporting revenues on Tuesday and providing two revenue outlooks. The company left its expectations as is issued in January, but also provided revenue estimates in the event of a recession. “The company’s outlook relies on a macro environment that it believes is impossible to predict this year with confidence,” he said in his securities application.

India’s inflation is slower
India’s annual inflation rate fell to 3.34% lower than expected in March, the country’s Ministry of Statistics’ implementation ministry reported on Tuesday. This marked the fifth monthly decline, with economists voted by Reuters below the expected 3.6% reading.

(Pro)US retail reports may be deceptive
Wednesday’s US retail sales report should be solid as consumers are still spending their money. Economists expect a healthy growth reading. But the details will be a different story. CNBC’s Jeffcox is why investors shouldn’t take over to their heading numbers:

Trump’s tariffs, who sold safe haven assets?

Last week, investors fled from safe shelters in the US Treasury market. This is an extraordinary move that adds to the market disruption caused by US President Donald Trump’s “mutual” tariffs.

Only a few sessions will yield 10-year-old Ministry of Finance It surged to 4.592% on Friday, the highest since February. Similarly, 30-year-old Ministry of Finance Yields were marked the highest since November 2023 on last Wednesday. Since then, yields have been declining, but have remained rising.

Among the possible causes behind bond sales are China, Japanese life insurance companies, hedge funds and “bond vigilantes.”