*** Our Updated Earnings Scorecard for Financials is Included Below ***
Initial Claims Fall 21K to Levels Near Lows of the Year
We won't split hairs. The claims number this morning is solid. It pushes both reported claims and rolling claims to levels near the lows seen YTD. Clealry this is a big step in the right direction. The question is, we've been here before - now multiple times this year - will they go lower or is this as good as it gets? We'll keep a close eye on claims. Remember, claims in the 375-400k range are low enough to start making a dent in the unemployment rate.
The headline initial claims number fell 21k last week to 434k (18k before the revision of last week's print). Rolling claims came in at 453.25, a decline of 5.5k over the previous week.
Yield Curve Moves Wider
The following chart shows 2-10 spread by quarter while the chart below that shows the sequential change. The 2-10 spread (a proxy for NIM) has been collapsing in the past two quarters. Yesterday’s closing value of 231 bps is up from 218 bps last week.
The table below shows the stock performance of each Financial subsector over four durations.
Hedgeye Earnings Scorecard
Below we show our rolling earnings scorecard which includes all financials that have reported thus far in the earnings season, along with subsector averages and our proprietary Hedgeye Earnings Score. The score evaluates company performance across ten measures, looking for either sequential improvement or decline and performance relative to expectations. A "perfect" score would be 10 while the worst possible score is negative 10.
Joshua Steiner, CFA