Ahead of Wall Street for April 5, 2012

This morning, weekly Initial Jobless Claims numbers were released, and continue to point toward a U.S. economy which is solidifying of the labor market front. New jobless claims reached 357K, down 6000 from the previous month, which has been revised to 359K.

The 4-week moving average fell 4250 to 361,750. Clearly we've been in a favorable zone well below the 400K level for the longest period in 3+ years. But we'd spent so much time since the collapse in late 2008 above the 400K level that it will still take some time before this positivity is felt by the average American. That said, we're closer than we've been in quite some time.

Continuing jobless claims also continue to improve. A total of 3.338 million claims were made in the month of March, down from 3.354 the previous week. However, as our Chief Market Strategist Dirk van Dijk, CFA often points out, there is no way to tell whether those leaving the rolls of continuing claims are due to people finding new jobs or whether their jobless claims have expired.

The market, however, will remain focused on tomorrow's Bureau of Labor Statistics (BLS) non-farm employment payroll report. There, too, the numbers have been healthy of late: February saw job gains of 233K, following January's impressive 285K new jobs. Importantly, we note that the BLS numbers tomorrow will not reflect today's jobless claims numbers, as last week's results will not be included in the BLS tally.

Yesterday's strong ADP (ADP - Snapshot Report) employment report is further evidence that the U.S. labor market is back on track, including its upward revisions for January and February. And the Fed's posturing toward forgoing additional quantitative easing (QE3), while it disappointed the market yesterday, is nevertheless another positive piece to the puzzle.

Concerns about an eventual Spain bailout temper today's mood. And a possible S&P downgrade of Best Buy (BBY - Analyst Report) debt to near "junk" status, as well as Yahoo (YHOO - Analyst Report) preparing to lay off 2000 more employees and Ruby Tuesday (RT - Snapshot Report) closing up to 27 news restaurants may weigh on the market a bit today. On the other hand, Target (TGT - Analyst Report) gave a positive surprise in its March comps and upwardly revised its EPS estimate for Q1.