Pre-market futures are mixed this Thursday, changing a bit — not much — following a new batch of economic reports. This is not a particularly busy week for new data, but today brings the goods: Advance Trade Balance, Retail/Wholesale Inventories and, being a normal Thursday, Initial and Continuing Jobless Claims. After the opening bell, we’ll get Pending Home Sales for November.
Initial Jobless Claims rose +12,000 to 218K last week, the highest level in three weeks and seemingly back to its trajectory we thought we were seeing going back to mid-November. We’re off the 233K we saw six weeks ago, but above the 203K reported a couple weeks ago. I think we knew those near-sub-200K levels weren’t sustainable; we are mature in our current labor market, with weakness widely expected. The economy has done better than expected, however, through 2023 — how long can this continue?
Continuing Jobless Claims, reported a week in arrears from new claims, were pretty much in-line with expectations at 1.875 million — up from the 1.861 million reported a week ago. Even still — and even though we’re clearly up from the 52-week lows in early September of around 1.655 million, anything under 2 million longer-term jobless claims remains consistent with a healthy labor market.
November’s Advance Trade Balance in Goods was a bit lower from last month’s print — -$90.3 billion versus -$89.6 billion previously reported — and the deepest cut since July. Still not as bad as the -$97.5 billion we saw back in April of this year, but at least we’re back in the median of the 2020s trade deficit, after dragging deeply to below -$12 billion in early 2022. Historically, upon climbing out of the Great Recession, we paid down this deficit to better than -$40 billion. Going back even further, we were solvent on Advance Trade up until the 1980s.
Advance Retail Inventories for November came in consistent with the previous month’s tally of -0.1%, lower than the +0.1% expected. Meanwhile, Advance Wholesale Inventories for November cut its expected downturn — -0.2% versus -0.4% expected. In terms of negative monthly prints, these are pretty good ones: higher inventories are risky for an economy, in that they must be worked down before more goods are produced.
Pre-market futures suggest the Santa Claus Rally is losing steam. The Dow has slid to -40 points since the economic prints have been released, while the S&P 500 is essentially flat and the Nasdaq has come down from +60 points to +25. Bond yields are staying down: the 10-year is currently 3.805% — it was 3.88% this time a year ago, by the way — and the 2-year is 4.255%. Obviously, we’re still inverted on the yield curve, but we’re 100 basis points off where we were around Halloween. Nothing explains this late-2023 rally better than this one fact.
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Trade Balance Comes in Lower
Pre-market futures are mixed this Thursday, changing a bit — not much — following a new batch of economic reports. This is not a particularly busy week for new data, but today brings the goods: Advance Trade Balance, Retail/Wholesale Inventories and, being a normal Thursday, Initial and Continuing Jobless Claims. After the opening bell, we’ll get Pending Home Sales for November.
Initial Jobless Claims rose +12,000 to 218K last week, the highest level in three weeks and seemingly back to its trajectory we thought we were seeing going back to mid-November. We’re off the 233K we saw six weeks ago, but above the 203K reported a couple weeks ago. I think we knew those near-sub-200K levels weren’t sustainable; we are mature in our current labor market, with weakness widely expected. The economy has done better than expected, however, through 2023 — how long can this continue?
Continuing Jobless Claims, reported a week in arrears from new claims, were pretty much in-line with expectations at 1.875 million — up from the 1.861 million reported a week ago. Even still — and even though we’re clearly up from the 52-week lows in early September of around 1.655 million, anything under 2 million longer-term jobless claims remains consistent with a healthy labor market.
November’s Advance Trade Balance in Goods was a bit lower from last month’s print — -$90.3 billion versus -$89.6 billion previously reported — and the deepest cut since July. Still not as bad as the -$97.5 billion we saw back in April of this year, but at least we’re back in the median of the 2020s trade deficit, after dragging deeply to below -$12 billion in early 2022. Historically, upon climbing out of the Great Recession, we paid down this deficit to better than -$40 billion. Going back even further, we were solvent on Advance Trade up until the 1980s.
Advance Retail Inventories for November came in consistent with the previous month’s tally of -0.1%, lower than the +0.1% expected. Meanwhile, Advance Wholesale Inventories for November cut its expected downturn — -0.2% versus -0.4% expected. In terms of negative monthly prints, these are pretty good ones: higher inventories are risky for an economy, in that they must be worked down before more goods are produced.
Pre-market futures suggest the Santa Claus Rally is losing steam. The Dow has slid to -40 points since the economic prints have been released, while the S&P 500 is essentially flat and the Nasdaq has come down from +60 points to +25. Bond yields are staying down: the 10-year is currently 3.805% — it was 3.88% this time a year ago, by the way — and the 2-year is 4.255%. Obviously, we’re still inverted on the yield curve, but we’re 100 basis points off where we were around Halloween. Nothing explains this late-2023 rally better than this one fact.