Thursday, December 16, 2021
Indexes continue to ride the post-Fed-meeting tide higher in today’s pre-market activity, as the quickening taper of asset purchases into early 2022 was met with understanding and relief yesterday afternoon. “Understanding” because this move by the Fed had been indicated weeks ago by Fed Chair Powell; “relief” because the Fed took pains yesterday to say bringing asset purchases to zero is separate from rising interest rates.
Thus, after a big upswing in the final couple hours of Wednesday’s trading day, Thursday morning we’re seeing the Dow up another +270 points, the Nasdaq +50 and the S&P 500 +30 points. We also have plenty of new economic data this morning which helps smooth out our narrative into the final two weeks of 2021.
Initial Jobless Claims did rise last week back above 200K to 206K, off the post-pandemic low we continue to see from the previous week, which was upwardly revised to 188K. Still, sub- or near-sub 200K still resembles something like pre-pandemic jobless claims, which is what we look for.
Continuing Claims did reach a post-Covid low (which makes sense, as it’s relative to last week’s Initial Claims data) to 1.845 million, down from the 1.999 million reported a week ago. These jobless claims figures — both new and longer-term — look to be normalizing back to pre-pandemic levels overall, which fits most other employment data we’ve gotten over the past few weeks. Good news; we’re not sweating the 206K headline.
Housing Starts for November outperformed expectations: 1.68 million was well above the 1.56 million estimate, and strongly up from the downwardly revised 1.50 million the previous months. This is encouraging, as well — the housing market had been getting stuck in the mud from a very promising early part of the year, on supply chain issues leading to delays in construction and FAR higher housing costs. It’s the start of seasonally slower starts data, so it’s nice to see a bump up regardless.
Building Permits, also for November, were able to top estimates as well: 1.71 million on the headline was better than the 1.66 million expected, and a step forward from October’s unrevised 1.65 million. Again, we’re headed in the right direction here.
Philly Fed for December was a big miss: 15.4 versus 30.0 anticipated, and 39.0 for the previous month. These sorts of data — not unlike the Empire State survey in this way — can be a little volatile month over month. That said, this is by far the weakest month of the past 12. On the other hand, it follows a strong October headline, so we’ll reserve judgment until we see if this is just some volatility shaking out, results of a Covid outbreak, or whatever.
Industrial Production for November reached +0.5%, which is 10 basis points below estimates. The previous month, however, bumped up 10 basis points to 1.7%. We’re still down from Spring 2021 highs, but we’ll take it. Capacity Utilization came in at a post-Covid high this morning, 76.8%. In fact, it was the highest figure in two full years. Also a nice increase from the previous month’s upwardly revised 76.5%
Questions or comments about this article and/or its author? Click here>>
Image: Bigstock
Markets Stay Green Post-Fed, New Econ Data
Thursday, December 16, 2021
Indexes continue to ride the post-Fed-meeting tide higher in today’s pre-market activity, as the quickening taper of asset purchases into early 2022 was met with understanding and relief yesterday afternoon. “Understanding” because this move by the Fed had been indicated weeks ago by Fed Chair Powell; “relief” because the Fed took pains yesterday to say bringing asset purchases to zero is separate from rising interest rates.
Thus, after a big upswing in the final couple hours of Wednesday’s trading day, Thursday morning we’re seeing the Dow up another +270 points, the Nasdaq +50 and the S&P 500 +30 points. We also have plenty of new economic data this morning which helps smooth out our narrative into the final two weeks of 2021.
Initial Jobless Claims did rise last week back above 200K to 206K, off the post-pandemic low we continue to see from the previous week, which was upwardly revised to 188K. Still, sub- or near-sub 200K still resembles something like pre-pandemic jobless claims, which is what we look for.
Continuing Claims did reach a post-Covid low (which makes sense, as it’s relative to last week’s Initial Claims data) to 1.845 million, down from the 1.999 million reported a week ago. These jobless claims figures — both new and longer-term — look to be normalizing back to pre-pandemic levels overall, which fits most other employment data we’ve gotten over the past few weeks. Good news; we’re not sweating the 206K headline.
Housing Starts for November outperformed expectations: 1.68 million was well above the 1.56 million estimate, and strongly up from the downwardly revised 1.50 million the previous months. This is encouraging, as well — the housing market had been getting stuck in the mud from a very promising early part of the year, on supply chain issues leading to delays in construction and FAR higher housing costs. It’s the start of seasonally slower starts data, so it’s nice to see a bump up regardless.
Building Permits, also for November, were able to top estimates as well: 1.71 million on the headline was better than the 1.66 million expected, and a step forward from October’s unrevised 1.65 million. Again, we’re headed in the right direction here.
Philly Fed for December was a big miss: 15.4 versus 30.0 anticipated, and 39.0 for the previous month. These sorts of data — not unlike the Empire State survey in this way — can be a little volatile month over month. That said, this is by far the weakest month of the past 12. On the other hand, it follows a strong October headline, so we’ll reserve judgment until we see if this is just some volatility shaking out, results of a Covid outbreak, or whatever.
Industrial Production for November reached +0.5%, which is 10 basis points below estimates. The previous month, however, bumped up 10 basis points to 1.7%. We’re still down from Spring 2021 highs, but we’ll take it. Capacity Utilization came in at a post-Covid high this morning, 76.8%. In fact, it was the highest figure in two full years. Also a nice increase from the previous month’s upwardly revised 76.5%
Questions or comments about this article and/or its author? Click here>>