To The Moon

On Thu, 10 Jul 2025, all 3 major US stock indexes closed higher, with both S&P 500 & Nasdaq Composite reaching new record highs, yet again.

According to Wall Street, this was largely attributed to investors focus on positives from corporate earnings and on the M&A front.

$Delta Air Lines(DAL)$ that reported its better-than-expected Q2 2025 earnings, has been identified as one of the bright sparks that helped to lift the US market.

By the time trading ended on Thursday: (see above)

• DJIA: +0.43% (+192.34 to 44,650.64).

• S&P 500: +0.27% (+17.20 to 6,280.46).

• Nasdaq: +0.09% (+19.33 to 20,630.66). This is its 6th record close in 2025.

Jobless Claims.

The other reason was US jobless claims out on Thursday.

(1) Weekly Jobless Claims.

• For week ending 5 Jul 2025, new applications for jobless benefits unexpectedly fell to a 7-week low.

• It fell by -5,000 to a seasonally adjusted 227,000 vs Wall Street 236,000 forecast vs last week’s downwards revised claims of 232,000 claims.

Fed chair has rightly pointed this out during 18 Jun 2025, post FOMC conference, that in the current (a) low-hiring and (b) low-firing environment, any increase in layoffs could rapidly push up the unemployment rate.

Just this week, news of mass layoffs from megacap companies like $Microsoft(MSFT)$ and $Intel(INTC)$ made the news. (see below)

The staff layoff will become part of the job’s statistics in the later part of July 2025 and into August 2025.

As highlighted by Jeffries, Chief US economist, Thomas Simons:

• Seasonally adjusted jobless claims, that economists watch closely to guage US job market, reached their highest point in early June 2025, and have gone down each week since then.

• Additionally, private businesses have kept profits up by cutting labour costs - (a) by not replacing workers who leave, (b) reducing work hours, and (c) using more part-time staff instead of large layoffs.

• This approach is likely to continue, but it may not work for much longer.

Traders decided to lock-in on this set of numbers for positive reinforcement and continued to pound the US stock market.

(2) US Continuing Claims.

As mentioned previously, I prefer the “continuing claims” report. It provides a more factual snapshot of US labour market.

The latest rise in continuing jobless claims stands in stark contrast to what the unemployment rate suggests about the labour market.

Claims data now points to rising labour market slack, as business conditions grow increasingly uncertain amid shifting trade, fiscal and monetary policies.

For week ending 28 Jun 2025, continuing claims rose to 1.965 million, up by +10,000 claims from 1.955 million in the prior week.

It’s now harder for unemployed workers to find jobs than at any point in the past 3 years.

On a brighter note, Delta Airline Q2 2025 earnings helped lifted US market higher on Thursday.

For the 3 months ended 30 Jun 2025, earnings compared to LSEG’s estimates were:

• Earnings per share (adjusted) : was $2.10 vs $2.05 expected vs Q2 2024’s $2.36. It is a -11.02% YoY decline.

• Revenue (adjusted): was $15.51 billion vs $15.48 billion expected vs Q2 2024’s $15.41 billion. It is a +0.65% YoY gain. (see above)

• Net income: was $1.37 billion vs Q2 2024’s $1.53 billion, a -10% YoY decline.

According to Delta airlines, CEO, Ed Bastian:

• Bookings have stabilized after a drop in demand earlier in 2025.

• However, it will be at lower levels than DAL has forecast at the start of 2025.

In spite of a “muddled” set of numbers, DAL rose because:

• DAL has reinstated its 2025 profit outlook.

• Full year earnings (adjusted) will be between $5.25 - $6.25 a share, with the midpoint above Wall Street’s consensus of $5.11–$5.31.

• Decision to raise quarterly dividend by +25% reflects DAL management’s strong confidence in airline’s (a) future cash flow generation and (b) overall financial health.

• Delta’s success in targeting higher-margin customers, resulting in +5% revenue growth from premium cabin sales and loyalty program revenue, that amounted to $2 billion in Q2 2025.

• Rounding off, its expectation of a stronger summer travel season compared to Wall Street’s anticipation, goes a long way to boost investors’ confidence in the airline too.

Stock Price Movement.

• DAL stock had a massive surge of +12.08% to $56.78 per share, on Thursday prior to market opened for trading.

• YTD it is still falling short by -3.88% (or $2.29) on its $69.06 peak achieved on 4 Feb 2025.

Price Target Revision.

After DAL reported its Q2 earnings, two banks, other financial institutions & research houses revised their price targets for the stock:

• $Goldman Sachs(GS)$ raised its price target for DAL to $67, from $60 and maintain a “Buy” rating.

• $Deutsche Bank AG(DB)$ raised DAL price target to $63, from $53 while maintaining a “Buy” rating as well.

Is there any reason/s not to like airline stocks going forward ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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