US Employment: Nasty Data Point, On The Margin

Initial jobless claims came in at 589,000 this morning (up from 527K in the prior week - an upwards revision from 524k) and almost 7k higher that the 4 week moving average of 519,250. Everything that matters in our macro models happens on the margin and, on the margin, this is bad.

Looking at the chart below, this data point puts the thesis of making lower highs in US weekly claims under assault, for now… next week we’ll get the river card.

In between now and then, I expect the SP500 to give the Bear camp the benefit of the doubt. I have downside support for the SP500 at 799 (5% lower than yesterday’s close.)

Keith R. McCullough
CEO & Chief Investment Officer