Initial Claims Continue To YoYo, Beat Estimates On Seasonals; Durable Goods Ex-Transports Slide
Here are the initial claims prints in the past 3 weeks: 376K, 352K, 388K, 353K (with the last week number naturally revised higher as always). Why the volatility? Same reason as the plunge two weeks ago: "onetime factors such as fewer auto-sector layoffs than normal likely caused the sharp decline." Naturally, this week's headline will say, 35K improvement in initial claims, and Wall Street will be (un)happy because we had a beat of consensus of 380K, which likely means QE is a little bit further. Looking at the other data point today will provide no help: headline June Durable Goods soared by 1.6%, on expectations of 0.3%, with the previous revised from 1.1% to 1.6%. But the number ex-volatile transports plunged from 0.8% to -1.1%, far below expectations of -0.8%, while Capital Goods orders ex air collapsed from a revised 2.7% to -1.4%. Which number is relevant? Probably the one which can be goalseeked to prolong the EURUSD jawboning rally started at 6 am this morning by Draghi, in which as we already showed, he said nothing new by regurgitating his open ended options, and merely awaits the refutation by Merkel et al who over the past 6 months has become the true European paymaster.
Spot the volatility in initial claims:
and Durable Goods Ex-Transports...
Those curious where inventory stockpiles are, here is the answer:
Inventories of manufactured durable goods in June, up twenty-nine of the last thirty months, increased $1.2 billion or 0.3 percent to $366.7 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.4 percent May increase.
Any minute now, record inventory will result in higher demand for said inventory.