INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK

Initial Claims Rise from YTD Lows - Seasonal Factors Likely to Dominate Through Year-End

The headline initial claims number rose 26k last week to 436k.  Rolling claims fell to 431k, 5.75k lower than the previous week.  Rolling claims hit a new YTD low, but the reported series moved off of the lows significantly. We continue to look for claims to in the 375-400k range before unemployment can meaningfully improve.  Seasonal factors appear to dominate into the year-end, as the third chart below shows. Over the next few weeks, the pattern of the last two years suggests that claims will rise further before falling sharply in the last weeks of the year. 

 

 INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - initial rolling

 

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - initial raw

 

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - initial claims

 

Yield Curve Continue to Improve

The following chart shows 2-10 spread by quarter while the chart below that shows the sequential change. After falling sharply for two quarters, the 2-10 spread has stabilized thus far in 4Q, rising 8 bps thus far (average of QTD versus average of 3Q).  Yesterday’s closing value of 243 bps is up from 240 bps last week.

 

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - 2 10 spread

 

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - 2 10 spread QoQ

 

The table below shows the stock performance of each Financial subsector over four durations. 

 

INITIAL CLAIMS JUMP 29K (26K AFTER REVISION); SEASONAL FACTORS AT WORK - subsector perf

 

 

 

Joshua Steiner, CFA

 

Allison Kaptur


Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more