Posts Tagged ‘jobless claims’

JOBLESS CLAIMS POINT TO JOB GAINS

JOBLESS CLAIMS POINT TO JOB GAINS

Courtesy of The Pragmatic Capitalist

Jobless claims continue their slow grind lower.  The latest reading of 432K was substantially better than the expectations of 460K.   Claims have made a dramatic improvement from their April peak of 658K.  Perhaps most important is the vast improvement in continuing claims.  Continuing claims came in at 4.98MM this week versus their cycle high of 6.77MM earlier this year.  All of this points to jobs gains in 2010.  Next week’s jobs report is currently pointing to a flat jobs report, but this data is almost certain to turn into jobs gains by early next year.   The tepid pace of gains is a clear sign of the weak recovery, but a recovery no less.

showimage.asp 3 JOBLESS CLAIMS POINT TO JOB GAINS

 


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A sustainable recovery with 530,000 weekly claims?

A sustainable recovery with 530,000 weekly claims?

unemployment, jobless claimsCourtesy of Edward Harrison at Credit Writedowns

That’s what we seem to be expecting based on the huge uptick in equities since March. While stock markets have long since moved it up a gear, the employment market is stuck in neutral. The latest seasonally-adjusted jobless claims numbers came in at 530,000. The widely-followed four week average is still 526,250 and is not coming down.

These numbers are more consistent with a loss of 200,000 jobs per month than of one of declining unemployment. When you have more people losing jobs than getting them, you don’t have the pre-conditions for a sustainable recovery. The economy needs to move it up a notch or we are looking at a double dip. 

UNEMPLOYMENT INSURANCE DATA FOR REGULAR STATE PROGRAMS


 

Advance

 

 

 

Prior1

WEEK ENDING

Oct. 24

Oct. 17

Change

Oct. 10

Year


Initial Claims (SA)

530,000

531,000

-1,000

520,000

485,000

Initial Claims (NSA)

492,456

460,430

+32,026

509,730

449,389

4-Wk Moving Average (SA)

526,250

532,250

-6,000

533,000

477,750

 

Advance

 

 

 

Prior1

WEEK ENDING

Oct. 17

Oct. 10

Change

Oct. 3

Year


Ins. Unemployment (SA)

5,797,000

5,945,000

-148,000

6,034,000

3,773,000

Ins. Unemployment (NSA)

4,968,019

4,916,574

+51,445

4,953,947

3,233,118

4-Wk Moving Average (SA)

5,960,750

6,039,500

-78,750

6,093,250

3,746,500

Source

Weekly Unemployment Claims Report – ETA Press Releases

 


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Weekly Initial Unemployment Claims Remain Stubbornly High

Weekly Initial Unemployment Claims Remain Stubbornly High

Courtesy of Mish

Weekly unemployment claims have probably peaked this cycle. However, initial claims still remain stubbornly high.

Here is the Weekly Unemployment Claims Report for the week ending October 17, 2009.

In the week ending Oct. 17, the advance figure for seasonally adjusted initial claims was 531,000, an increase of 11,000 from the previous week’s revised figure of 520,000. The 4-week moving average was 532,250, a decrease of 750 from the previous week’s revised average of 533,000.

The advance seasonally adjusted insured unemployment rate was 4.5 percent for the week ending Oct. 10, a decrease of 0.1 percentage point from the prior week’s revised rate of 4.6 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Oct. 10 was 5,923,000, a decrease of 98,000 from the preceding week’s revised level of 6,021,000. The 4-week moving average was 6,030,750, a decrease of 59,250 from the preceding week’s revised average of 6,090,000.

To smooth out weekly noise, most look at the 4-Week Moving Average of Initial Claims.

Initial Claims 4-Week Moving Average

click on chart for sharper image

In the last recession, unemployment continued to rise until weekly claims dropped stayed 400,000. This recession things might be worse because of rampant retail overcapacity, and no housing boom to look forward to.

Continuing Claims

click on chart for sharper image

Although everyone is watching initial claims, continuing claims help fill in the details. Once people lose a job, they are staying out of work longer than any time in history, even population adjusted.

Bear in mind the above chart is understated. It does not reflect extended benefits, Emergency Unemployment Compensation, or those who have simply expired all benefits.

Please see Dismal Unemployment Situation In Chart Form written August 6, for details. I will see if I can get an update that includes extended benefits and emergency compensation.

Mike "Mish" Shedlock


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THOUGHTS ON THIS MORNING’S DATA

THOUGHTS ON THIS MORNING’S DATA

Courtesy of The Pragmatic Capitalist

Earnings aren’t the only thing driving the market higher this morning – better than expected economic data is also giving a lift to stocks.  Jobless claims came in at 521K which was better than the 540K analysts expected.  Continuing claims also declined to 6.04MM – this is a good sign for future hiring.

The more important news of the day was chain store sales which rhymed with the ICSC data that showed improvement in recent reports.  Overall, the sales remain sluggish, but were better than anticipated. Target reported a 1.7% decline, Nordstrom reported a 2.4% decline, Neiman Marcus reported a 17% decline, Kohls reported a 5.5% increase, JC Penney reported a 1.4% decline and CostCo reported a 3% increase.  All in all, the numbers are decent, but comps to last year were very easy.  Econoday reports:

Chain stores posted very strong results in September pointing to a significant month-to-month increase for the non-auto non-gas category of next Wednesday’s retail sales report from the Commerce Department. This year’s shift of the Labor Day weekend deeper into September helped the month’s results with year-ago comparisons especially helped by last year’s hurricanes, Ike and Gustav, not to mention the turmoil following the Lehman Brothers collapse. Chains did report weakness in home furnishings, perhaps a hint of trouble for the building materials component. Still, today’s reports are very positive though strength in non-auto non-gas sales is not likely to offset the post-clunker plunge in vehicle sales. But vehicles aside, the consumer, despite weak confidence and job troubles, is showing some spark.

Are we on the verge of a consumer rebound?  Michael P. Niemira thinks so:

“Let the retail recovery begin,” said Michael P. Niemira, chief economist at International Council of Shopping Centers. “This is the start of a better performance and better fundamentals.”

Unfortunately, one month a trend does not make.  The recent data on consumer credit and auto sales tells a drastically different story….

 


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5 REASONS THE RALLY IS BUILT ON QUICKSAND

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5 REASONS THE RALLY IS BUILT ON QUICKSAND

rally built on quicksandCourtesy of The Pragmatic Capitalist

From the desk of David Rosenberg this morning:

1. This remains a hope-based rally (with strong technicals). I say that because during this six-month 50%+ rally in the S&P 500, the U.S. economy has shed 2.4 million jobs, which is almost as many as we lost during the entire 2001-02 tech wreck — in just six months. The market’s ability to shrug off the loss of 2.4 million jobs is either a sign that it is treating this as old news or sees the cost-cutting as good news for profits. Either way, what we are seeing transpire is without precedent — the magnitude of the employment slide versus the magnitude of the market advance. Truly fascinating stuff.

It’s remarkable to add that jobless claims were 550K this morning – a staggering number this deep into a recession.  But fear not – it was “better than expected”.

2. Companies have not really been beating their earnings estimates — only the very final estimates heading into the reporting quarter. For example, the consensus view for 3Q EPS at the start of the year was $21.00, last we saw the estimates were down to just over $14.00. But there is a deeply rooted belief that earnings are coming in better than expected. This is a psychology that is difficult to break. It is completely unknown (for some reason) that corporate revenues are running at a -25% YoY rate, which compares to the -10% we saw at the worst part of the 2001-02 bear market and the -3% trend at the most negative point in 1991.

It’s also interesting to note the very real weakness in corporate revenues.  The bottom line can be manipulated, but revenues never lie….

3. Valuation is a poor timing device but even on “normalized” trailing 10-year earnings, the S&P 500 is trading near 18x, which is now above the historical average of 16x.

Market value matters less to me at this juncture.  If we were to get a much stronger than expected recovery you could easily argue that the market is cheap.  PE ratios are a moving target based on guesses.  That is what makes them poor market timing indicators.

4. All the


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IS THIS MARKET RESILIENT OR COMPLACENT?

IS THIS MARKET RESILIENT OR COMPLACENT?

IS THIS MARKET RESILIENT OR COMPLACENT?Courtesy of The Pragmatic Capitalist

Today’s market action has been odd to say the least.  Futures were up well over 100 points heading into the retail sales and jobless claims data.  The strength has been attributed to strong international markets, good GDP figures from Europe, the John Paulson bank purchase and the IEA report of higher demand for oil.

In case you missed it retail sales came in at -0.1% and -0.6% ex-autos.  Analysts were expecting 0.8% and 0.1%.  When the market learned that retail sales were an utter disaster and that jobless claims jumped up to 558K the market temporarily cratered.  Econoday reports:

The rate of layoffs is heavy but steady as first-time jobless claims were little changed in the Aug. 8 week, at 558,000 vs. 554,000 in the prior week. The numbers, in a plus, are a little bit below the four-week average, which is at 565,000. Continuing claims fell steeply, down 141,000 for data in the Aug. 1 week to 6.202 million. But the decline is hard to read, reflecting either new hirings and/or the expiration of benefits. The economy may be in recovery or at least is steady but the outlook for the jobs market, and how far it lags, is a serious concern for the economic outlook and for policy makers.

The futures fell 70 points or so, but remained positive.  The market then opened and immediately tanked.   S&P futures dropped as far as 998 before rebounding miraculously on no news.   If you had told me the retail sales figures would have come in negative I’d tell you that the S&P would have at least retraced all of yesterday’s gains.  In an economy that is 70% consumers you have to begin to wonder how long the market can ignore these incredibly weak retail sales figures.  And more importantly, is the market resilient or just downright complacent?  This late into a rally I am more inclined to side with complacency.  This market should be down well over 200 points today on this news that puts a mighty large dent in any v-shaped recovery theories.  Efficient market?  Keep dreaming….

 

 


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WHAT’S ON TAP?

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WHAT’S ON TAP?

Courtesy of The Pragmatic Capitalist

Another huge week for the markets coming up.  Another 18% of the S&P 500 will report earnings, but the shift will move from major market leaders to second tier companies.  Very few of the reports will be major market movers like we’ve seen in recent weeks.  I expect the impact of earnings to diminish substantially in the coming two weeks.  This is one less log on the rally fire.   The economics news will be front and center including the grand daddy of ‘em all, the NFP report on Friday.

  • Monday: July ISM manufacturing survey, July construction spending, July auto sales
  • Tuesday: June personal income and spending, June pending home sales
  • Wednesday: July ISM services index, June factory orders, July ADP employment survey, weekly crude inventories
  • Thursday: weekly initial jobless claims
  • Friday: July unemployment and change in nonfarm payrolls, June consumer credit

I’ve turned neutral on the market here.  The risk reward appears most unfavorable.  Although I am not directly shorting the equity markets I do have a number of pseudo shorts via the currency and derivatives markets.  My equity exposure has been cut to 0% at this point.  I feel very comfortable with my Thursday sell near S&P 995 after the disturbing late day action on Thursday and Friday.  They say the smart money transacts after 3PM  and the smart money was selling both days.  We’ll see if it materializes into real selling in the coming weeks.  I am having trouble finding a new catalyst for the rally.  Positive earnings and an all out economic recovery are largely being priced into stocks here.  Sentiment is wildly positive in the near-term.  All of this makes me less than excited about buying into the market at these levels.

 

 


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THE ONLY NEWS THAT MATTERED TODAY

THE ONLY NEWS THAT MATTERED TODAY

UPSCourtesy of The Pragmatic Capitalist

Forget the seasonal strength in the housing numbers.  Jobless claims slightly better than expected?  Who cares.  UPS reported their earnings today.  That’s all you should care about.   UPS and FedEx are, in my opinion, the two best barometers of economic growth in the world.  While the market rips higher on “better than expected” earnings and the strong housing numbers they are completely overlooking the fact that UPS sees no signs of recovery.  As a middle man in almost every transaction it is nearly impossible to see a sharp recovery that UPS is not involved in.  CFO Kurt Kuehn had these comments on the call this morning:  

“Our trends so far in July show no material uptick in growth, We don’t have any confidence that either demand or activity is going to pick up substantially.”

And directly from the earnings release:

“The economic environment continues to be difficult. Declines in both our domestic and international businesses appear to be stabilizing but volumes will remain significantly below last year’s levels,” said Kurt Kuehn, UPS’s chief financial officer.

“Although declines in economic indicators are less dramatic than earlier in the year, questions remain as to when business activity will begin to strengthen,” he continued. “The business environment in the third quarter should be similar to the second quarter.

FedEx airplaneMeanwhile, on the other side of the pond Deutsche Post DHL is reporting similar sentiment.  CEO Frank Appel says:

“We still don’t have a clear view of . . .further economic development. Though economic conditions haven’t worsened – with new business bustling and our strong market position in Asia – we are not yet seeing any substantial improvement.”

So, the stock market is now getting very euphoric while the underlying fundamentals still show no real sign of a strong recovery.  I’m making a list and checking it twice.  Although my S&P 1,000 call is still intact, it’s time to start planning for a tactical short position in this environment.  The fundamentals don’t rhyme with this market action in the last few weeks.

Photo: FedEx DC10, taken by Kevin McCoy, photo and license posted at Wikipedia.

 


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Data: Existing Home Sales – New Unemployment Claims

Data: Existing Home Sales – New Unemployment Claims

Courtesy of Tom Lindmark at But Then What

Existing-home sales

The NAR reported that existing home sales increased 3.6% June over May. Unit sales in June were 4.89 million versus 4.72 million in June. Inventory fell to 3.82 million which represents a 9.4 month supply. Nothing here to knock your socks off but by the same token we are at least moving up. Hey, any port in a storm.

Jobless claims

Initial claims for unemployment were up 3.6% for the week. They rose by 30,000 to 554,000. Remember we’ve been talking about some seasonality adjustments that skew this number. Those adjustments artificially reduced the number for the last two weeks and now this report is skewed upwards. A look at the more reliable four-week moving average shows it was down by 19,000 to 566,000. Still horrible numbers but at least the trend is positive.

We probably need to get used to slow steady improvement and hope that some other shoe doesn’t fall on us. Right now it looks like a long climb to mediocrity. Wish it were better.

more: here and here (Calculated Risk for a good discussion of housing)

 


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Investors Looking to Tech to Pull U.S. Stocks – and the Economy – Out of Their Doldrums

Investors Looking to Tech to Pull U.S. Stocks – and the Economy – Out of Their Doldrums

tech stocksCourtesy of William Patalon III
Executive Editor, Money Morning

Stock investors will key next on earnings from tech giant Intel Corp. (Nasdaq: INTC) and banks including J.P. Morgan Chase & Co. (NYSE: JPM) for hints of what to expect in the third quarter — and how badly the recession hurt businesses in the second quarter. The Standard & Poor’s 500 Index and Dow Jones Industrial Average declined for the fourth straight week last week – the longest string of losses since stocks hit their low point in March – and investors are looking at the tech sector to squelch the ongoing decline.

The Nasdaq Composite Index composit lost 2.47% in the week ended Friday.

Earnings reports this week from computer-chip giant Intel and several big banks – including JPMorgan Chase & Co. - could provide investors and economists some insights on where the U.S. economy appears to be headed. Earnings are expected to improve over the last quarter, even though they’ll still be down substantially on a year-over-year basis, Binky Chadha, chief U.S. equity strategist at Deutsche Bank AG (NYSE: DB), told MarketWatch.com, "A necessary condition for the markets to go up from here is that earnings have to deliver, and we need a dissipation of the uncertainty about earnings," Chadha said.

Year-over-year (annual) earnings comparisons are typically the financial yardstick that analysts use to assess whether the U.S. economy is growing or declining, meaning that "sequential" (quarter-to-quarter) earnings aren’t as crucial. This time around, however, the quarterly numbers may be viewed as important because they might give a better picture of the economy’s health.

During periods of extreme uncertainty, earnings estimates for companies tend to be widely dispersed – a function of investors not really knowing what to expect. That’s particularly true right now of banks and financial-services companies – and companies that derive most of their income from discretionary consumer spending.

And that makes sense, given that those are the two most uncertain portions of the U.S. economy – thanks to the ongoing global financial crisis and a jobless recovery that is badly crimping consumer confidence.

After mounting one of the strongest surges in history from their March lows, U.S. stocks have fallen back in recent weeks as investors dealt with a growing…
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Kimble Charting Solutions

DAX Index Hits Two 18-Year Support Lines, Creates Large Bullish Reversal

Courtesy of Chris Kimble

Has the DAX index from Germany experience a large decline of late? Yes, it has!

Has the decline broken long-term rising support lines? Not so far!

This chart looks at the DAX index on a monthly basis over the past 25-years. Over the past 6-years, it has traded sideways inside of the blue rectangle at (1).

The decline this year saw the DAX hit two 18-year rising support lines at (2) last month, where a large bullish reversal took place.

Until broken, important support remains in play at (2), which is bullish for this key index....



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Zero Hedge

Aaand Its Gone... The Biggest Support For Asset Prices

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Authored by Lance Roberts via RealInvestmentAdvice.com,

Since the passage of “tax cuts,” in late 2017, the surge in corporate share buybacks has become a point of much debate. I previously wrote that stock buybacks were setting records over the past couple of years. Jeffery Marc...



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Here's how scientists are tracking the genetic evolution of COVID-19

Why do scientists care about mutations on the coronavirus? Alexandr Gnezdilov Light Painting

Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

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Here's how scientists are tracking the genetic evolution of COVID-19

 

Here's how scientists are tracking the genetic evolution of COVID-19

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Niema Moshiri, University of California San Diego

When you hear the term “evolutionary tree,” you may think of Charles Darwin and the study of the relationships between different species over the span of millions of years.

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Activists demand revamp of anti-redlining law

By Anna Peel. Originally published at ValueWalk.

Over 100 California Community Organizations and Leaders Call for Banking Regulators to Stop Planned Revamp of Anti-Redlining Law during COVID19 Crisis

Q1 2020 hedge fund letters, conferences and more

Worker, Housing, and Small Business advocates call on all resources to be dedicated to saving lives and responding to Coronavirus

San Francisco--Amongst an unprecedented public health crisis that threatens hundreds of thousands of lives, as small businesses are shuttered across California and the nation, and as millions file for...



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The Big Short movie guides us to what is next for the stock market

Courtesy of Read the Ticker

There is nothing new in WallStreet, it is only the players that change. Sometimes a market player or an event gets ahead of the crowd and WallStreet has to play catch up.

Previous Post Dow 2020 Crash Watch Dow, Three strikes and your out!

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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

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10 ways to spot online misinformation

 

10 ways to spot online misinformation

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Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

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Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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About Phil:

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