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INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA

Takeaway: Comparing Hurricanes Sandy and Katrina, their impact was similar on jobless claims. We'll know more once the State-level data is released.

This note was originally published November 15, 2012 at 09:48 in Financials

Hurricane Comparisons

Remain calm. In the chart below we profile the trend in initial jobless claims following hurricanes Katrina and Sandy. If, in fact, this week's enormous surge in initial claims is attributable to Sandy, then we can reasonably expect to see it mean revert along a similar path that we saw following Katrina. That said, it took 8 weeks for Katrina to fully renormalize. 

 

There is in fact a way in which we can test the government claim that the rise in claims is attributable to Sandy. The government releases state-level NSA claims. Total NSA claims rose 104k WoW. We would expect to see a preponderance of that increase represented by New Jersey, New York and other hard-hit East coast states. Unfortunately, the state level data is not yet available on the Labor Dept website. Stay tuned.

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - sandy vs katrina

 

 

Initial Jobless Claims: The Data

Initial claims rose 84k last week to 439k (an increase of 78k after a 6k upward revision to last week's data). The rolling claims series rose 11.75k WoW to 384k. On a non-seasonally adjusted basis claims rose 104k to 466k. The year-over-year rolling NSA change made a dramatic jump to ~0% improvement. Last week the YoY rolling NSA change was -6.5%. 

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Seasonality

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - rolling claims NSA YoY data

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Raw

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Rolling

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - NSA

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Rolling NSA

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - SPX

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Fed

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - NSA YoY

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Recessions

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Claims Linear

 

 

Yield Spreads

The 2-10 spread fell 3 bps WoW to 133 bps. So far 4QTD, the 2-10 spread is averaging 1.43%, which is up 6 bps relative to 3Q12.  

 

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - 2 10 spread

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - 2 10 QoQ

 

Financial Subsector Performance

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

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Subsector performance

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Companies

 

Joshua Steiner, CFA

203-562-6500

jsteiner@hedgeye.com

 

Robert Belsky

203-562-6500

rbelsky@hedgeye.com

 


Bearish Signals For Financials

The Financials SPDR (XLF) broke its intermediate-term TREND line of support yesterday. The last time this happened was on May 9 of this year and back on April 13, 2011. Following those two breaks, the XLF posted sizable declines over the ensuing intermediate term. Thus, we believe breaking the TREND line of support indicates that a sell off is near; financials have been slowly trading lower and lower since the election on November 6. Keep in mind we’ve stated before that an Obama win would be negative on the sector.

 

Bearish Signals For Financials - image011

 

Between the aforementioned quantitative view, Obama’s reelection and the ongoing Fiscal Cliff debacle, it’s looking decidedly bleak for financials over the next few months. 

 

Bearish Signals For Financials - image012


JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA

Takeaway: Comparing Hurricanes Sandy and Katrina, their impact was similar on jobless claims. We'll know more once the State-level data is released.

Hurricane Comparisons

Remain calm. In the chart below we profile the trend in initial jobless claims following hurricanes Katrina and Sandy. If, in fact, this week's enormous surge in initial claims is attributable to Sandy, then we can reasonably expect to see it mean revert along a similar path that we saw following Katrina. That said, it took 8 weeks for Katrina to fully renormalize. 

 

There is in fact a way in which we can test the government claim that the rise in claims is attributable to Sandy. The government releases state-level NSA claims. Total NSA claims rose 104k WoW. We would expect to see a preponderance of that increase represented by New Jersey, New York and other hard-hit East coast states. Unfortunately, the state level data is not yet available on the Labor Dept website. Stay tuned.

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 1

 

Initial Jobless Claims: The Data

Initial claims rose 84k last week to 439k (an increase of 78k after a 6k upward revision to last week's data). The rolling claims series rose 11.75k WoW to 384k. On a non-seasonally adjusted basis claims rose 104k to 466k. The year-over-year rolling NSA change made a dramatic jump to ~0% improvement. Last week the YoY rolling NSA change was -6.5%. 

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 2

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 3

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 4

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 5

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 6

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 7

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 8
 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 9

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 10

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 11

 

JOSHUA STEINER: INITIAL JOBLESS CLAIMS: SANDY VS. KATRINA - 12

 

Joshua Steiner, CFA

 

Robert Belsky


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PODCAST: Plenty Of Risk

In today's Morning Investment Call, we discuss the recent weakness in the market and how the S&P 500 broke our key support level of 1364. With the Fiscal Cliff looming, a debt ceiling breach nearly a month away and corporate earnings continuing to slow, how do you properly manage risk? All these topics and more are discussed in our call; we've posted the audio for you to enjoy.

 

 


Jobless Claims: Sandy VS. Katrina

This week’s initial jobless claims surged following the aftermath of Hurricane Sandy. If history is any indicator, we’ll likely see the surge drop off after a few weeks similar to when Hurricane Katrina smacked the South. It took 8 weeks for Katrina to fully renormalize. When state level data is available for New York, New Jersey and other hard-hit East coast states, we’ll be able to tell if the rise in claims is truly attributable to Sandy.

 

Jobless Claims: Sandy VS. Katrina  - sandy vs katrina

 

Jobless Claims: Sandy VS. Katrina  - Seasonality


INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA

Takeaway: Comparing Hurricanes Sandy and Katrina, their impact was similar on jobless claims. We'll know more once the State-level data is released.

Hurricane Comparisons

Remain calm. In the chart below we profile the trend in initial jobless claims following hurricanes Katrina and Sandy. If, in fact, this week's enormous surge in initial claims is attributable to Sandy, then we can reasonably expect to see it mean revert along a similar path that we saw following Katrina. That said, it took 8 weeks for Katrina to fully renormalize. 

 

There is in fact a way in which we can test the government claim that the rise in claims is attributable to Sandy. The government releases state-level NSA claims. Total NSA claims rose 104k WoW. We would expect to see a preponderance of that increase represented by New Jersey, New York and other hard-hit East coast states. Unfortunately, the state level data is not yet available on the Labor Dept website. Stay tuned.

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - sandy vs katrina

 

 

Initial Jobless Claims: The Data

Initial claims rose 84k last week to 439k (an increase of 78k after a 6k upward revision to last week's data). The rolling claims series rose 11.75k WoW to 384k. On a non-seasonally adjusted basis claims rose 104k to 466k. The year-over-year rolling NSA change made a dramatic jump to ~0% improvement. Last week the YoY rolling NSA change was -6.5%. 

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Seasonality

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - rolling claims NSA YoY data

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Raw

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Rolling

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - NSA

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Rolling NSA

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - SPX

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Fed

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - NSA YoY

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Recessions

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Claims Linear

 

 

Yield Spreads

The 2-10 spread fell 3 bps WoW to 133 bps. So far 4QTD, the 2-10 spread is averaging 1.43%, which is up 6 bps relative to 3Q12.  

 

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - 2 10 spread

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - 2 10 QoQ

 

Financial Subsector Performance

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

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Subsector performance

 

INITIAL JOBLESS CLAIMS: SANDY vs. KATRINA - Companies

 

Joshua Steiner, CFA

 

Robert Belsky

 


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