Thursday, April 4th, 2024
Pre-markets are flowing a bit higher this morning. This follows a Wednesday close that saw only the Dow still mired in negative territory of the major indices. We’re still down for the week, and over the last five trading days, but it’s so far a pretty forgiving pullback: instead of collapsing -2% across the board, this feels more like we popped some bubbles off the top of the froth. The Dow is +120 points at this hour, the S&P 500 is +20 and the Nasdaq currently resides at +90 points.
These reads come directly following two economic prints ahead of the opening bell. Like most Thursday mornings, new Initial Jobless Claims are out: 221K is a notable jump from the 213K expected (and average 211K over the trailing five weeks), and the highest figure in 10 weeks. It comes after a slight upward revision to the previous week of 212K. We’ll keep an eye on this: last summer, we were seeing new jobless claims numbers north of 260K before the weekly figures began to dwindle down to historic lows. But if we see these numbers rise from here, it may be an early indication of softness in the labor market.
Continuing Claims tell a different story. This is likely due to their reporting a week in arrears from new claims, but 1.791 million takes us back below the psychological level of 1.8 million, and the lowest print we’ve seen since mid-February. This follows a downward revision to the previous week to 1.810 million, which is roughly where longer-term jobless claims have been pivoting of late. In actuality, from an historical perspective, anything below 2 million weekly longer-term jobless claims is consistent with a healthy labor market. This may change, but it’s unlikely to do so in the very short term.
Elsewhere, the February U.S. Trade Balance is also out this morning. This has dipped lower than expected: -$68.9 billion from around -$67.7 billion anticipated, and lower than the slight downward revision for the previous month, to -$67.6 billion. While not great news, we’re far from the worst reads on this metric: in the past year, April ’23 brought us -$72.17 billion, while March ’22 came in with the worst deficit in U.S. history: -$102.54 billion. For most of the 20th century, the U.S. trade balance was at or nearly completely solvent.
For the remainder of today’s docket, we’ll hear from a bevy of Fed members. These include Chicago’s Austan Goolsbee, Philadelphia’s Patrick Harker, Cleveland’s Loretta Mester, Minneapolis’ Neel Kashkari and Richmond, VA’s Tom Barkin. Also making an appearance today will be Fed Governor Adriana Kugler, who reiterated just yesterday that interest rate cuts are indeed coming this year. Currently, the market still prices in three 25 basis-point rate cuts for 2024, starting in June.
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Jobless Claims Bump Higher, Trade Deficit Sinks Lower
Thursday, April 4th, 2024
Pre-markets are flowing a bit higher this morning. This follows a Wednesday close that saw only the Dow still mired in negative territory of the major indices. We’re still down for the week, and over the last five trading days, but it’s so far a pretty forgiving pullback: instead of collapsing -2% across the board, this feels more like we popped some bubbles off the top of the froth. The Dow is +120 points at this hour, the S&P 500 is +20 and the Nasdaq currently resides at +90 points.
These reads come directly following two economic prints ahead of the opening bell. Like most Thursday mornings, new Initial Jobless Claims are out: 221K is a notable jump from the 213K expected (and average 211K over the trailing five weeks), and the highest figure in 10 weeks. It comes after a slight upward revision to the previous week of 212K. We’ll keep an eye on this: last summer, we were seeing new jobless claims numbers north of 260K before the weekly figures began to dwindle down to historic lows. But if we see these numbers rise from here, it may be an early indication of softness in the labor market.
Continuing Claims tell a different story. This is likely due to their reporting a week in arrears from new claims, but 1.791 million takes us back below the psychological level of 1.8 million, and the lowest print we’ve seen since mid-February. This follows a downward revision to the previous week to 1.810 million, which is roughly where longer-term jobless claims have been pivoting of late. In actuality, from an historical perspective, anything below 2 million weekly longer-term jobless claims is consistent with a healthy labor market. This may change, but it’s unlikely to do so in the very short term.
Elsewhere, the February U.S. Trade Balance is also out this morning. This has dipped lower than expected: -$68.9 billion from around -$67.7 billion anticipated, and lower than the slight downward revision for the previous month, to -$67.6 billion. While not great news, we’re far from the worst reads on this metric: in the past year, April ’23 brought us -$72.17 billion, while March ’22 came in with the worst deficit in U.S. history: -$102.54 billion. For most of the 20th century, the U.S. trade balance was at or nearly completely solvent.
For the remainder of today’s docket, we’ll hear from a bevy of Fed members. These include Chicago’s Austan Goolsbee, Philadelphia’s Patrick Harker, Cleveland’s Loretta Mester, Minneapolis’ Neel Kashkari and Richmond, VA’s Tom Barkin. Also making an appearance today will be Fed Governor Adriana Kugler, who reiterated just yesterday that interest rate cuts are indeed coming this year. Currently, the market still prices in three 25 basis-point rate cuts for 2024, starting in June.
Questions or comments about this article and/or author? Click here>>