Jefferies downgraded its ratings for Delta, American Airlines, Southwest, and Air Canada, resulting in declines in airline stocks. Analyst Sheila Kahyaoglu noted ongoing corporate and consumer sentiment challenges due to economic uncertainties. The US Consumer Expectations Index hit a 12-year low, with optimism about income waning. Additionally, Bank of America reported a decrease in credit and debit card spending for travel. United Airlines experienced a revenue drop due to reduced government travel and layoffs affecting the sector.
Jefferies analyst Sheila Kahyaoglu explained that "corporate and consumer sentiment [are expected] to remain soft on swelling macro uncertainty." This paints a clear picture of current market sentiment.
According to Stephanie Guichard, a Senior Economist at the Conference Board, "consumers' optimism about future income... [has] largely vanished, suggesting worries about the economy and labor market have started to spread into consumers' assessments of their personal situations." This highlights a significant decline in consumer confidence.
Bank of America reported a reduction of 7.2% in users' credit and debit card spending. Americans are tightening their belts on travel expenses amid economic uncertainties.
United's Chief Financial Officer Mike Leskinen noted, "government travel has fallen off here post-inauguration," indicating revenue drops linked to government cutbacks in air travel.
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