Seniors are rushing to get back on planes: Morning Brief

Yahoo Finance’s Julie Hyman, Myles Udland and Brian Sozzi discuss how vaccines are having a major impact on airlines.

Video Transcript

JULIE HYMAN: Also, of course, we are watching the implications for the reopening trade. And that's something that Myles wrote about in this morning's Morning Brief. Some new research showing the people who are most likely to be vaccinated, of course, are older people across the United States. So those are the people who are most consistently and uniformly allowed to be vaccinated. First, it was 75 and over. Now it's 65 and older. And it turns out those people are booking flights. It looks like, Myles, that's what some new research showed, which is at the same time interesting and entirely expected perhaps.

MYLES UDLAND: Yeah, I think so. And I love the work that the team of Bank of America, and JPMorgan does this as well. They'll use their in-house credit and debit card data to give us a picture of what real-time spending in the economy tends to look like. And the data are often quite good. So the chart that we highlighted today, which I think we have, shows the generation that B of A calls traditionalists, I guess it's silent generation, the age group 73 to 92.

My grandparents' age group. They have ramped their spending on airlines since vaccines were rolled out for the 65 plus population by 4x, relative to where it was in June of 2020. Now granted, in June of 2020, pretty much no one in this age group is thinking about flying at all. Though, interestingly enough, you see the red line here. These folks did get on planes, or did spend on airlines at a faster rate in the Fall. Maybe they were anticipating some kind of winter vaccine rollout. Maybe they said, I've had it, I'm definitely going to go see.

Some of them said, I'm going to go see some family members for the holidays. And of course, COVID cases then surged throughout the country all through the holiday period. But the data here are quite clear. As you outlined, Julie, maybe not a huge surprise. But I do think instructive that the line Jay Powell has said over and over is the economy will not have a full recovery until people are fully comfortable doing a wide range of activities.

And I see this inflection point as vaccines rolled out with older populations as a clear sign that once folks were comfortable with a wide range of activities, things inflected up into the right and quite abruptly. I don't know for, let's say a millennial, who maybe they said, oh, I'll do a week down in Florida or something like that. I'm not sure if it'll inflect quite the same way for them that it inflects for older populations.

But we've talked about the idea of pent up demand. Some economists don't like it because it's a vague concept. But it is undeniable that there is economic energy that people will unlock once they are vaccinated and once they are comfortable doing a lot of stuff that they weren't able to do, didn't feel right doing, weren't allowed to do, were discouraged from doing by friends and family, so on and so forth. So I think probably just the leading edge though of what we're looking at, and certainly the projections we hear from people across our programming and the notes we see in our inbox, certainly suggest this is only the leading edge of a very interesting year economically.

JULIE HYMAN: Yeah, three things I just quickly want to say about this. One, I'm seeing this anecdotally. My father and his girlfriend booked a trip to Jamaica after they got their vaccines scheduled and had some visibility as to when they were going to get it. Two, Too this is also, of course, reflected in this morning's jobs numbers. When you have that big growth in leisure and hospitality, it's because of the anticipation for the reopening happening, further spending happening. And three, what's going to be interesting is how this plays out with the stocks.

If you look at an American Airlines, just as one example, the shares are up this year alone about 35%. They have now lapped where they were post-pandemic. They've come back above that level where they were before the coronavirus pandemic. So is this priced in already? How much more growth is going to be priced in to some of these leisure and hospitality stocks. That's going to be really fascinating to see how that plays out, Brian.

BRIAN SOZZI: Yeah, Julie, you must be looking at my Yahoo Finance Premium screen I'm looking at right now because I'm looking at these travel stocks here and you got Marriott up about 15.5% in the past month. Delta shares up 15% in the past month. And you have Hilton, really which had a challenging 2020, obviously because the lodging sector came under severe pressure, up close to 10%. So Myles, you're starting to see the travel trade, already one of the hottest trade on Wall Street so far.

MYLES UDLAND: I mean, it's anticipated growth and here we are with the realized growth. I mean, the market doesn't look forward from nothing, it looks forward for things that eventually come through. And so again, another reminder, we are going to see crazy comps as it relates to these businesses' earnings and other kinds of economic data. All right, opening bell here down on the floor of the New York Stock Exchange. InterPrivate ringing the opening bell.

Viewers know what a ticker that ends in .U means. This is a SPAC. This is a SPAC looking for some deals out there. And interesting guys. I saw some data, street insider flagging that there were a couple of SPACs that went public yesterday that traded below that $10 per share bogey. Just a little bit of pressure. Brian Sozzi calling out the SPCX ETF we were following earlier on. And we'll see how that evolves through today's trading session.