Thursday, May 27, 2021
Lots of new economic data hit the tape ahead of today’s opening bell, in a week without a lot of pivot points with which to draw a new definitive direction. Not only jobless claims, as we get every Thursday morning, but also Durable Goods Orders, a Q1 GDP revision and Personal Consumption Expenditures help give investors — as well as the Fed — a focused glimpse at how our economy is moving.
Let’s start with the first revision to Q1 Gross Domestic Product (GDP), which reached the same conclusion as the initial release: +6.4%. There were murmurs on the Street that this number may have adjusted higher upon revision, but 6.4% is nothing to sneeze at. The third and final read will come out as initial Q2 prints begin to file in.
Personal Consumption Expenditures (PCE) — perhaps the single-most important economic metric influencing the Fed’s decisions on interest-rate policy — jumped to 11.3 from its initial read of 10.7, reaching 3.7% on the pricing index. PCE core, quarter over quarter, came in at 2.5% (2.3% was the consensus estimate). These are strong growth numbers, though notably off the 3.4% PCE pricing seen in Q3 of last year.
Preliminary Durable Goods Orders for April swung to a disappointing -1.3% from the expected +0.9%. However, when we strip out volatile transportation durables, we see this pop back up to +1.0%. Subtracting orders in the Defense industry, the figure is unchanged. But in the non-Defense, ex-aircraft read — a proxy for “normal” business investment — we see a jump to +2.3%, which is indicative of a strong and strengthening economy. Shipments vs. orders were in-line at +0.9%.
Last but not least, Initial Jobless Claims continue to ratchet down to new pandemic lows: 406K was a nice drop from the unrevised 444K the previous week. We are tantalizingly close to breaking through the floor of the 400Ks — maybe next week? In any case, it’s a sizable journey downward from the 765K reported for the second week of March. A year ago at this time, we were well above 1.5 million new weekly jobless claims.
Continuing Claims, reported a week in arrears, also came down: 3.64 million was another step lower from the 3.75 million reported the previous week. While not technically the lowest we’ve seen since the pandemic era began, we are nevertheless is a long valley from the large slopes we saw a year ago, prior to Pandemic Unemployment Assistance (PUA) passed through Congress to help slow the bleeding of a badly damaged labor market.
Market indexes have improved in today’s pre-market following these economic prints. Whether their meanings have all been automatically absorbed upon impact may be in doubt, investors likely are seeing growth advancing in measured, less-than-erratic ways.
The Dow was up 80 points before the data but now looks to open 150 points, the S&P 500 has swung to positive futures, -4 points to +4 points, and the Nasdaq, which had been expected to open -70 points this morning, has nearly cut this deficit in half.
Questions or comments about this article and/or its author? Click here>>
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>
Image: Bigstock
PCE Up, Durable Goods Down, Jobless Claims Slow-Melt
Thursday, May 27, 2021
Lots of new economic data hit the tape ahead of today’s opening bell, in a week without a lot of pivot points with which to draw a new definitive direction. Not only jobless claims, as we get every Thursday morning, but also Durable Goods Orders, a Q1 GDP revision and Personal Consumption Expenditures help give investors — as well as the Fed — a focused glimpse at how our economy is moving.
Let’s start with the first revision to Q1 Gross Domestic Product (GDP), which reached the same conclusion as the initial release: +6.4%. There were murmurs on the Street that this number may have adjusted higher upon revision, but 6.4% is nothing to sneeze at. The third and final read will come out as initial Q2 prints begin to file in.
Personal Consumption Expenditures (PCE) — perhaps the single-most important economic metric influencing the Fed’s decisions on interest-rate policy — jumped to 11.3 from its initial read of 10.7, reaching 3.7% on the pricing index. PCE core, quarter over quarter, came in at 2.5% (2.3% was the consensus estimate). These are strong growth numbers, though notably off the 3.4% PCE pricing seen in Q3 of last year.
Preliminary Durable Goods Orders for April swung to a disappointing -1.3% from the expected +0.9%. However, when we strip out volatile transportation durables, we see this pop back up to +1.0%. Subtracting orders in the Defense industry, the figure is unchanged. But in the non-Defense, ex-aircraft read — a proxy for “normal” business investment — we see a jump to +2.3%, which is indicative of a strong and strengthening economy. Shipments vs. orders were in-line at +0.9%.
Last but not least, Initial Jobless Claims continue to ratchet down to new pandemic lows: 406K was a nice drop from the unrevised 444K the previous week. We are tantalizingly close to breaking through the floor of the 400Ks — maybe next week? In any case, it’s a sizable journey downward from the 765K reported for the second week of March. A year ago at this time, we were well above 1.5 million new weekly jobless claims.
Continuing Claims, reported a week in arrears, also came down: 3.64 million was another step lower from the 3.75 million reported the previous week. While not technically the lowest we’ve seen since the pandemic era began, we are nevertheless is a long valley from the large slopes we saw a year ago, prior to Pandemic Unemployment Assistance (PUA) passed through Congress to help slow the bleeding of a badly damaged labor market.
Market indexes have improved in today’s pre-market following these economic prints. Whether their meanings have all been automatically absorbed upon impact may be in doubt, investors likely are seeing growth advancing in measured, less-than-erratic ways.
The Dow was up 80 points before the data but now looks to open 150 points, the S&P 500 has swung to positive futures, -4 points to +4 points, and the Nasdaq, which had been expected to open -70 points this morning, has nearly cut this deficit in half.
Questions or comments about this article and/or its author? Click here>>
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>