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Jobless Claims Come in Lower Than Expected

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Aside from this past Tuesday’s very important Consumer Price Index (CPI) report, this Thursday morning contains the biggest market data of the week. It’s sheer volume on both economic prints and Q4 earnings reports. We’ll do the best to assess them all in what little time and space we have here, but the pre-market futures are taking away overall positive vibes: the Dow is +116 points at this hour, the S&P 500 is +13 and the Nasdaq is +53 points ahead of the opening bell.

Weekly Initial Jobless Claims keep on keepin’ on: 212K on headline is once again lower than projections, following a slight upward revision the previous week to 220K. This is the lowest weekly print since the second week in January, which was also the last time we saw new claims sub-200K. The following week, we jumped to 227K, but have come down steadily in the weeks since. This illustrates a still-strong labor market on a week-by-week scale.

Continuing Jobless Claims, on the other hand, bounced to their highest level since mid-November last year, ratcheting up to 1.895 million two weeks ago (Continuing Claims report a week in arrears from Initial Claims). This follows a downwardly revised 1.865 million the previous week; the first week of 2024 carries the lowest level (which may well be the result of seasonality) at 1.806 million. Breaking out past 1.9 million seems only a matter of time, although anything under 2 million longer-term claims per week remains consistent with a healthy employment picture.

Retail Sales for January came in surprisingly lower: -0.8% on headline, 4x lower than the -0.2% consensus. This represents the biggest month-over-month drop since March of 2023, and comes off a downwardly revised +0.4%, which was nevertheless the highest print since September of last year. Ex-auto sales, -0.6% is 3x lower than the +0.3% analysts were expecting. Ex-autos and gas reached -0.5% and the Control number was -0.4% — both spell the worst performance since March of last year. Goods prices, particularly in Building Materials and Gardening, Motor Vehicles and Electronics. Furniture and overall Services rose in the month.

Meanwhile, Import Prices, also for January, surprised to the upside: +0.8% from the -0.1% anticipated. However, this is off a significant revision the previous month, from 0.0% originally reported to -0.7% this morning. Ex-fuel, this moves to +0.6%, still much higher than expected, though off those revisions that showed a  much weaker December. Year over year Import Prices are -1.3% for the month, revised down to -2.4% for the year. Exports swung to +0.8% from -0.7% previously, -2.4% year over year is up from the revised -2.9%.

February Empire State manufacturing surprised to the upside, at “only” -2.4, the best read since last November (and the last time it was a positive number); we had expected -13.5. This comes off an extraordinarily low -43.7 the previous week (which was the worst month since the 2020 pandemic). Meanwhile, Philly Fed manufacturing notched only its second positive month in more than a year and a half: +5.2, swinging from a -9.0 expected and a -10.6 reported the prior month. This marks only the second headline in the green since August of 2023.

Deere & Co. (DE - Free Report) beats estimates on both top and bottom lines in the company’s fiscal Q1, posting earnings of $6.23 per share for a +20% surprise over the $5.19 expected. Revenues of $10.49 billion eked past the Zacks consensus by +0.53%. Shares are coming down in early trading, however, by roughly -3.5%. This nearly doubles the company’s selloff so far year-to-date.

Wendy’s (WEN - Free Report) and Shake Shack (SHAK - Free Report) also reported Q4 earnings ahead of today’s open, with Wendy’s missing earnings estimates by 2 cents while Shake Shack beat by two cents. Both quick-service restaurants are coming off long strings of quarterly earnings beats. Revenues for Wendy’s came in slightly below forecasts, while Shake Shack posted a top-line surprise. As a result, we’re seeing WEN shares selling off -3% in today’s pre-market, while Shake Shack is enjoying a strong +17% rally ahead of the opening bell.

After today’s close, we’ll see more earnings results from key firms such as Coinbase (COIN - Free Report) , Applied Materials (AMAT - Free Report) , Dropbox (DBX - Free Report) and The Trade Desk (TTD - Free Report) . We’ll also get an updated survey on Homebuilders’ confidence, and we’ll hopefully be able to give a little time to examining Industrial Production and Capacity Utilization numbers out in the next few minutes. In the meantime, we’ll see if the market can hold onto current gains.

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