Thursday, February 24, 2022
Russia has begun to launch missiles into strategic targets throughout Ukraine, finally shedding the guise that Russian President Putin was only rolling tanks in to protect Russian citizens in the neighboring country. As a result, the price of oil has jumped to over $100 per barrel, which will add to inflation pressure here in the U.S.
Thus, pre-market futures were again taking another step down into the well: the Dow -850 points, the S&P 500 -115 and the Nasdaq -460 points. We’ve since seen a bit of an abatement here since economic data has hit the tape, which at the very least removes a few question marks from our economic view domestically:
Initial Jobless Claims came in-line with expectations at 232K, and also at around the mid-point we’ve seen of weekly claims throughout the start of 2022. This also comes down from the upwardly revised 249K the previous week, which was the third-highest weekly total year to date.
Continuing Claims have now reached a new post-pandemic low of 1.476 million, way below forecasts for 1.580 million, and about 80K fewer long-term jobless claims from the second-lowest weekly read in the past 12-week cycle. These figures remain low even as initial claims began to plump up over the past few weeks. Because Continuing Claims report a week in arrears, we may expect to see further post-Covid lows a week from now.
The first revision to Q4 Gross Domestic Product (GDP) came in 10 basis points higher than the initial read to +7.0%, which is as expected. Personal Consumption dropped 20 basis points to +3.1% (0.4% lower than expectations) while the Price Index ballooned up to +7.1%. In order to find a bigger quarterly jump in prices, you’d have to go back more than 40 years: to Q3 of 1981.
The PCE Price Index and PCE core came in near estimates, which each on either side of expectations: +6.3% on the price index versus +6.5% in the first print; +5.0% versus +4.9% on core. This core read — stripping out volatile food and energy costs — is notably way down from the +6.3% posted in Q3 2021. Thus, while prices have exploded in Q4, they may not be as bad as they seem from the headline. We’ll know more when we can assess further reads down the line.
Obviously, the tragic circumstances in Ukraine are going to dominate headlines for some time. Congress now sees bipartisan support for passing the most crippling sanctions against Russia, which is something of a silver lining considering the heavily partisan combat we’ve seen for years on Capitol Hill. In fact, it’s the first full-throated denouncement of Putin from U.S. elected officials we’ve seen since 2014.
Questions or comments about this article and/or its author? Click here>>
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Russia Bombs Ukraine, Pre-Markets Tank; Jobless Claims, GDP In-Line
Thursday, February 24, 2022
Russia has begun to launch missiles into strategic targets throughout Ukraine, finally shedding the guise that Russian President Putin was only rolling tanks in to protect Russian citizens in the neighboring country. As a result, the price of oil has jumped to over $100 per barrel, which will add to inflation pressure here in the U.S.
Thus, pre-market futures were again taking another step down into the well: the Dow -850 points, the S&P 500 -115 and the Nasdaq -460 points. We’ve since seen a bit of an abatement here since economic data has hit the tape, which at the very least removes a few question marks from our economic view domestically:
Initial Jobless Claims came in-line with expectations at 232K, and also at around the mid-point we’ve seen of weekly claims throughout the start of 2022. This also comes down from the upwardly revised 249K the previous week, which was the third-highest weekly total year to date.
Continuing Claims have now reached a new post-pandemic low of 1.476 million, way below forecasts for 1.580 million, and about 80K fewer long-term jobless claims from the second-lowest weekly read in the past 12-week cycle. These figures remain low even as initial claims began to plump up over the past few weeks. Because Continuing Claims report a week in arrears, we may expect to see further post-Covid lows a week from now.
The first revision to Q4 Gross Domestic Product (GDP) came in 10 basis points higher than the initial read to +7.0%, which is as expected. Personal Consumption dropped 20 basis points to +3.1% (0.4% lower than expectations) while the Price Index ballooned up to +7.1%. In order to find a bigger quarterly jump in prices, you’d have to go back more than 40 years: to Q3 of 1981.
The PCE Price Index and PCE core came in near estimates, which each on either side of expectations: +6.3% on the price index versus +6.5% in the first print; +5.0% versus +4.9% on core. This core read — stripping out volatile food and energy costs — is notably way down from the +6.3% posted in Q3 2021. Thus, while prices have exploded in Q4, they may not be as bad as they seem from the headline. We’ll know more when we can assess further reads down the line.
Obviously, the tragic circumstances in Ukraine are going to dominate headlines for some time. Congress now sees bipartisan support for passing the most crippling sanctions against Russia, which is something of a silver lining considering the heavily partisan combat we’ve seen for years on Capitol Hill. In fact, it’s the first full-throated denouncement of Putin from U.S. elected officials we’ve seen since 2014.
Questions or comments about this article and/or its author? Click here>>