Takeaway: Taking the data at face value, it's less good. However, it's unclear whether CA is still causing a meaningful distortion.

The Fed’s innovative and, thus far, enigmatic “communication tool” continues to propagate both investor uncertainty and asset volatility as speculative handicapping of every domestic macro data point on prospective policy adjustment timing is back to serving as the prevailing driver of daily price action. 


The dollar is up and treasury yields are both higher in today’s iteration as the Chicago PMI surged to its highest level since March 2011 and initial claims declined modestly. 


Bloomberg’s weekly reading of consumer confidence, meanwhile, declined again sequentially as the hangover in confidence stemming from the Gov’t shutdown continues to manifest across the preponderance of age and income demographics.    


With the immediate term correlation between the dollar and equities strongly inverse at -0.86, stocks are red this morning on stronger data.   However, we continue to view the combination of #StrongDollar + #RatesRising as a pro-growth signal and are looking for a sustained return to that dynamic (which characterized much of the YTD) to stay bullish on U.S. growth prospects over the intermediate term.   


This morning’s initial jobless claims numbers aren’t adding any clarity to the macro picture as residual noise from California continues to complicate a clear discernment of the underlying Trend in the domestic labor market.  We should have improved clarity come next week. 


Below is the detailed breakdown of this morning's claims data from the Hedgeye Financials team.  If you would like to setup a call with Josh or Jonathan or trial their research, please contact 


-  Hedgeye Macro







Processing, Processing, ...

The labor market appears to have lost a step in the latest week, but conflicting reports over whether California's tech issues are finally out of the data make it hard to state definitively what is happening. The year-over-year rate of improvement in non-seasonally adjusted initial jobless claims slowed to 6.6% from 9.8% in the prior week. The state level California data, which is only available on a 1-week lag, is showing that CA claims were still running above the prior year level by ~15k. Assuming this 15k was still present in the data in the current week it would significantly alter the conclusion, as the data would instead appear to be resuming its pre-California/Govt shutdown run-rate. We expect greater clarity in the week ahead as we'll be able to see next week whether California's level of claims for this week were distorted.


Nuts & Bolts 

Seasonally adjusted initial jobless claims fell 10k to 340k WoW and there was no revision to the prior week's data. Meanwhile, the 4-week rolling average of seasonally-adjusted claims rose 8k WoW to 355.25k.


The 4-week rolling average of NSA claims, which we consider a more accurate representation of the underlying labor market trend, was lower by 3.8% YoY, which is a sequential deterioration versus the previous week's YoY change of -5.8%


















Joshua Steiner, CFA


Jonathan Casteleyn, CFA, CMT


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

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