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Claims Drop 13k, Remain Flat on a Rolling Basis

Initial claims fell 13k last week, dropping to 414k.  The 4-week average was unchanged, and claims remain higher than they were at the beginning of the year.  We show below initial claims with the S&P and XLF.  Over the last several years, the indices have climbed when claims are dropping, and held flat or pulled back when claims stagnate or rise.  The tight correlation between market performance and Federal Reserve purchases is ominous heading into the end of QE2.


INITIAL JOBLESS CLAIMS STILL STAGNATING - rolling

INITIAL JOBLESS CLAIMS STILL STAGNATING - raw

INITIAL JOBLESS CLAIMS STILL STAGNATING - NSA

INITIAL JOBLESS CLAIMS STILL STAGNATING - s p

INITIAL JOBLESS CLAIMS STILL STAGNATING - XLF

INITIAL JOBLESS CLAIMS STILL STAGNATING - s p and fed

INITIAL JOBLESS CLAIMS STILL STAGNATING - fed

2-10 Spread 

We track the 2-10 spread as a proxy for NIM.  Thus far the spread in 2Q is tracking 11 bps tighter than in 1Q.  This week's spread level of 259 bps compares to 257 bps last week.  

INITIAL JOBLESS CLAIMS STILL STAGNATING - spreads

INITIAL JOBLESS CLAIMS STILL STAGNATING - spreads QoQ

Financials Subsector Performance

The chart below shows the price performance of subsectors over four durations.

INITIAL JOBLESS CLAIMS STILL STAGNATING - subsector perf

Joshua Steiner, CFA

Allison Kaptur