1.74mm people were 'continuing' to claim jobless benefits before Donald Trump was elected. In a mysterious fluke of statistical smoke and mirrors, that marked the absolute trough in the data series - showing just how awesome the economy was for Hillbama. Last week's 2.46mm print for continuing claims suggests (while seasonal aspects are at play), over 700,000 more people are now claiming unemployment benefits than before Trump was elected.
European and Asian shares, and S&P futures slipped, while government bond yields jumped to multi-week highs on Thursday after Yellen's hawkish speech. Oil rose after API reported a drop in crude inventories. The euro rebounded as investors look to Mario Draghi to address rising European inflation that make the ECB's stimulative policies look increasingly out of sync.
The week ahead will be a busy one, with a plethora of events including the Davos shindig, where particular focus will be on Chinese President Xi Jinping, the first Chinese president to attend. China will also announce GDP on Friday, which also marks the inauguration of Donald Trump as the 45th US president. Tuesday brings Theresa May's long-awaited Brexit speech.
With all eyes likely on wage growth indications in the subtext of tomorrow's payrolls report (following The Fed Minutes' comments on full employment), Goldman Sachs is forecasting a better-than-expected 0.3% rebound in average hourly earnings (helped by more favorable calendar effects) and a better-than-expected 180k payrolls print (albeit with a small rise in the unemployment rate). However, they are careful to note that any downside can be blamed on "a considerable drop in temperatures."
Initial jobless claims plunged 28k to 235k - the second lowest print since 1973 - after surging in the post-Trump era. However, completly opposite to that possible holiday-related print, continuing jobless claims rose once again to its highest since the beginning of September.
Initial Jobless Claims dropped once again, back near 43 year lows this week (-4 to 254k) as Continuing Claims picked up 11k to 2.018 million. As the following two charts show, this is all very humorous...
There’s seemingly no stopping the equity side of the “Trumpflation” trade in what may be developing into an epic year end blow-off top. The euphoria which took the S&P 500, Russell 2000 and the Transports to all-time highs yesterday, and the Dow to less than 500 points away from 20,000 carried over into Asian stocks (+0.8%) as they followed bullish trend, while European stocks rose for a fourth day.
In a quiet overnight session in which Japan was closed, European shares are mixed as financials and auto weigh, Asian stocks rise led by materials while S&P futures little changed against a backdrop of the continuing commodity rally with oil holding near $48 a barrel, up fractionally on the session.
More of the same this morning as the dollar extended its advance on the still undeteremined Trump reflationary policy measures after Yellen signaled an interest-rate hike could be imminent, while bond yields around the globe rose again, metals declined, European stocks advanced and futures were modestly in the red just shy of all time highs.
After an ugly October, November has seen two straight weeks of improvements in initial jobless claims (plunging 11.6%, 31k - the most since Jan 2015 - to 235k). This is the lowest initial jobless claims since Nov 1973... The US Economy fell into recession the next month.
Global bond yields and the dollar both weakened after the Bank of Japan offered to buy an unlimited amount of debt at fixed yields, stabilizing the global bond rout, while investors awaited testimony from Fed Chair Janet Yellen that will help shape the outlook for interest rates ahead of a December rate hike that is now seen as near certain.
While the October payrolls report, due out at 8:30am on Friday, has taken on a secondary importance in light of the market's near certainty that the Fed will hike rates in December (absent a Trump victory and/or a market crash), analysts and traders will surely be concerned any prominent outlier prints that deviate too far from the consensus estimate of 175K. So, in preview of tomorrow's biggest economic update, here is a snapshot of what Wall Street expects.
The last four weeks have seen initial jobless claims rise over 7.7% (~19k), the fastest pace in 5 months, pushing to 265k, the highest level since the start of August. For context, while initial claims have been stable at near record lows this year, claims have not 'improved' since July 2015.
Asian stocks, S&P futures and European shares trade flat as a tightening race for the U.S. presidency spurs demand for haven assets including the yen while weighing on stocks and Mexico’s peso. A turbulent overnight session saw some early risk off following the plunge in Facebook shares and the Fox News report that an FBI probe into the Clinton foundation may lead to a "likely indictment."
Global stocks were modestly higher, before the European Central Bank gives its policy update, while investors weigh mixed earnings results. Asian stocks rise, U.S. equity-index futures are little changed. The euro touched its weakest level since July and stocks in the region fell after their first back-to-back gains in two weeks.