We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
We are in the final half-day of trading in a holiday shortened week (Merry Christmas, by the way), and we see a whole host of economic prints hitting the tape at the same time, and hour ahead of the opening bell. At this hour, we’re not seeing any impact on early trading: the Dow is +100 points, the S&P 500 is +12 and the Nasdaq +25. Should these levels continue, it will be our first week closing in the green since the week ended December 10th.
Initial Jobless Claims stayed constant week over week, matching the slightly downwardly revised 205K new claims made from the previous week. These remain off pandemic lows of 188K the week after Thanksgiving, but other than being back above the psychologically significant 200K, this is still a good headline.
Continuing Claims, on the other hand, have once again set a new low in the pandemic era: 1.859 million is slightly below the upwardly revised 1.867 million from the previous week. Longer-term jobless claims are reported a week in arrears from new claims, so if the initial claims are any indication, we may see a plateauing in continuing claims in the weeks to come. Then again, we’re at an atypical point in the calendar year, so perhaps we’ll withhold expectations until 2022 gets rolling.
The latest Personal Consumption Expenditures (PCE) Price Index came in at a healthy +0.6% on headline, with nominal personal income in-line with expectations at +0.4% and nominal consumer spending at +0.6%. Core inflation month over month matched the previous month’s +0.5%. These figures are from November, and for the most part they follow an even more robust October.
Year over year, the PCE deflator comes in at +5.7% — the highest single-month read in almost 40 years. It also follows an upwardly revised +5.1% from October. With what we know about the overall strength in the economy from other metrics already reported, these figures are less surprising than supportive. They are also closely followed by the Fed, which remains active in its pursuit of aligning monetary policy with the economy’s overall needs.
Preliminary Durable Goods Orders, also for November, beat expectations by 100 basis points to +2.5%. The previous month’s revision swung from a negative -0.4% to a positive +0.1%. However, strip out volatile month-over-month Transportation orders and we see this read fall to +0.8%. Non-defense, ex-aircraft (a proxy for “normal” business spending) came in at -0.1%, which is obviously not so desirable.
We know that Boeing (BA - Free Report) had a big month in filling aircraft orders, which demonstrates the wisdom of looking at monthly durables numbers absent the transportation sector. What economists would like to see going forward is the auto industry getting back on track; supply chain issues, often relating to microchips used in new car dashboards, created a bottleneck of sorts in this industry earlier in the year. We’ll keep an eye on this in the months to come, as well.
After the market opens, we’ll see even more economic data: New Home Sales for November are expected to ramp up to 766K, a new University of Michigan survey for December looks for a steady 70.4, and 5-year inflation expectations as of this month are currently +3.0%. Again, as none of this morning’s reads seem to be influencing the early trade, we don’t suspect these later prints will, either.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Economic Data Deluge
We are in the final half-day of trading in a holiday shortened week (Merry Christmas, by the way), and we see a whole host of economic prints hitting the tape at the same time, and hour ahead of the opening bell. At this hour, we’re not seeing any impact on early trading: the Dow is +100 points, the S&P 500 is +12 and the Nasdaq +25. Should these levels continue, it will be our first week closing in the green since the week ended December 10th.
Initial Jobless Claims stayed constant week over week, matching the slightly downwardly revised 205K new claims made from the previous week. These remain off pandemic lows of 188K the week after Thanksgiving, but other than being back above the psychologically significant 200K, this is still a good headline.
Continuing Claims, on the other hand, have once again set a new low in the pandemic era: 1.859 million is slightly below the upwardly revised 1.867 million from the previous week. Longer-term jobless claims are reported a week in arrears from new claims, so if the initial claims are any indication, we may see a plateauing in continuing claims in the weeks to come. Then again, we’re at an atypical point in the calendar year, so perhaps we’ll withhold expectations until 2022 gets rolling.
The latest Personal Consumption Expenditures (PCE) Price Index came in at a healthy +0.6% on headline, with nominal personal income in-line with expectations at +0.4% and nominal consumer spending at +0.6%. Core inflation month over month matched the previous month’s +0.5%. These figures are from November, and for the most part they follow an even more robust October.
Year over year, the PCE deflator comes in at +5.7% — the highest single-month read in almost 40 years. It also follows an upwardly revised +5.1% from October. With what we know about the overall strength in the economy from other metrics already reported, these figures are less surprising than supportive. They are also closely followed by the Fed, which remains active in its pursuit of aligning monetary policy with the economy’s overall needs.
Preliminary Durable Goods Orders, also for November, beat expectations by 100 basis points to +2.5%. The previous month’s revision swung from a negative -0.4% to a positive +0.1%. However, strip out volatile month-over-month Transportation orders and we see this read fall to +0.8%. Non-defense, ex-aircraft (a proxy for “normal” business spending) came in at -0.1%, which is obviously not so desirable.
We know that Boeing (BA - Free Report) had a big month in filling aircraft orders, which demonstrates the wisdom of looking at monthly durables numbers absent the transportation sector. What economists would like to see going forward is the auto industry getting back on track; supply chain issues, often relating to microchips used in new car dashboards, created a bottleneck of sorts in this industry earlier in the year. We’ll keep an eye on this in the months to come, as well.
After the market opens, we’ll see even more economic data: New Home Sales for November are expected to ramp up to 766K, a new University of Michigan survey for December looks for a steady 70.4, and 5-year inflation expectations as of this month are currently +3.0%. Again, as none of this morning’s reads seem to be influencing the early trade, we don’t suspect these later prints will, either.