INITIAL JOBLESS CLAIMS IMPROVEMENT LIKELY TO REVERSE

Initial Claims See Another Late July Distortion

Initial claims dropped 20k last week (24k post the revision to the prior week) to 398.  Breaking through the 400k line for the first time since April is a positive signal.  However, we are cautious around the timing, since late July generally sees a distortion of the seasonal adjustment related to manufacturing layoffs.  Manufacturing employees are usually furloughed for a period during the summer, and submit initial claims when furloughed.  However, the timing of these furloughs shifts by a couple of weeks, which means the Bureau of Labor Statistics' seasonal adjustment factor doesn't do a great job of capturing them.  For evidence of this, check out the typical volatility in late July (as seen in the first chart) and the similar-looking, but not identical, patterns in the NSA data in the second chart. NSA claims dropped more than 100k WoW, well outside of the average move.  

 

Bottom line, we would expect claims to increase back above 400-410 sometime in the next 2-3 weeks as we roll out of the seasonal distortion.  

 

INITIAL JOBLESS CLAIMS IMPROVEMENT LIKELY TO REVERSE - seasonality

 

INITIAL JOBLESS CLAIMS IMPROVEMENT LIKELY TO REVERSE - NSA

 

INITIAL JOBLESS CLAIMS IMPROVEMENT LIKELY TO REVERSE - rolling

 

INITIAL JOBLESS CLAIMS IMPROVEMENT LIKELY TO REVERSE - reported

 

Joshua Steiner, CFA

 

Allison Kaptur

 


Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more


Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

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