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The good news just keeps coming this week for the stock market. Following a Fed meeting that cut rates -25 basis points (bps), raised growth estimates and lowered inflation projections, Weekly Jobless Claims and the U.S. Trade Balance came in better than expected, for the most part. Bond yields are even winding down off near-term highs ahead of the Fed announcement.
Jobless Claims Higher on Initial, Much Lower Continuing
Initial Jobless Claims for last week bounded back up to trend after a big drop the previous week. This morning’s +236K new jobless claims was actually the highest since the outlier +263K reported the week after Labor Day, but it followed the big drop to +192K two weeks ago, which was revised only slightly higher. Today’s +236K is roughly the median on new jobless claims over the past full year.
Continuing Claims, reporting a week in arrears, reported a perhaps not-so-surprising big drop to 1.838 million from a downwardly revised 1.937 million the prior week. This is a major -99K drop week over week — and the lowest since mid-April — but may, like the initial claims post a week ago, ultimately be a blip on the screen.
However, should these numbers tack lower over time, we will have seen an extraordinary high in jobless claims without once tipping into territory that might warrant concern. For 32 weeks, long-term jobless claims was over 1.9 million without once ever touching 2 million, which would be a psychological touchpoint of a potentially unraveling labor market. It’s too early to say we dodged a bullet on this matter, but for today, consider this very good news.
U.S. Trade Deficit Falls to Lowest Level in 5 Years
More good news: the U.S. Trade Balance (Deficit) shrank to its lowest level since June of 2020 in today’s (delayed) September report at -$52.8 billion, following a downwardly revised -$59.3 billion the previous month. This is -60% lower than it was back in March when the trade deficit set a record low, although that was due to trade merchants getting ahead of the April “Liberation Day” tariffs.
Earnings Update: LOVE, AVGO, COST, etc.
For some not-so-great news, furniture retailer Lovesac (LOVE - Free Report) missed estimates on its bottom line — negative earnings of -$0.72 per share versus -$0.70 anticipated — and its top-line — $150.17 million, -2.37% from the Zacks consensus. Shares are down another -14% on the news, adding to the -42% loss in the stock year to date.
After today’s close, a trio of Zacks Rank #3 (Hold) companies report quarterly earnings. Chipmaking giant Broadcom (AVGO - Free Report) is expected to see +31.7% growth on earnings, +24.5% on revenues — largely due to AI infrastructure supply — and warehouse membership behemoth Costco (COST - Free Report) is projected to yield +11.5% earnings growth on +8.3% revenues. Lululemon (LULU - Free Report) , on the other hand, is estimated to come in -22.7% lower on earnings and +3.5% on revenues.
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Trade Deficit Comes in Lowest in Five Years
The good news just keeps coming this week for the stock market. Following a Fed meeting that cut rates -25 basis points (bps), raised growth estimates and lowered inflation projections, Weekly Jobless Claims and the U.S. Trade Balance came in better than expected, for the most part. Bond yields are even winding down off near-term highs ahead of the Fed announcement.
Jobless Claims Higher on Initial, Much Lower Continuing
Initial Jobless Claims for last week bounded back up to trend after a big drop the previous week. This morning’s +236K new jobless claims was actually the highest since the outlier +263K reported the week after Labor Day, but it followed the big drop to +192K two weeks ago, which was revised only slightly higher. Today’s +236K is roughly the median on new jobless claims over the past full year.
Continuing Claims, reporting a week in arrears, reported a perhaps not-so-surprising big drop to 1.838 million from a downwardly revised 1.937 million the prior week. This is a major -99K drop week over week — and the lowest since mid-April — but may, like the initial claims post a week ago, ultimately be a blip on the screen.
However, should these numbers tack lower over time, we will have seen an extraordinary high in jobless claims without once tipping into territory that might warrant concern. For 32 weeks, long-term jobless claims was over 1.9 million without once ever touching 2 million, which would be a psychological touchpoint of a potentially unraveling labor market. It’s too early to say we dodged a bullet on this matter, but for today, consider this very good news.
U.S. Trade Deficit Falls to Lowest Level in 5 Years
More good news: the U.S. Trade Balance (Deficit) shrank to its lowest level since June of 2020 in today’s (delayed) September report at -$52.8 billion, following a downwardly revised -$59.3 billion the previous month. This is -60% lower than it was back in March when the trade deficit set a record low, although that was due to trade merchants getting ahead of the April “Liberation Day” tariffs.
Earnings Update: LOVE, AVGO, COST, etc.
For some not-so-great news, furniture retailer Lovesac (LOVE - Free Report) missed estimates on its bottom line — negative earnings of -$0.72 per share versus -$0.70 anticipated — and its top-line — $150.17 million, -2.37% from the Zacks consensus. Shares are down another -14% on the news, adding to the -42% loss in the stock year to date.
After today’s close, a trio of Zacks Rank #3 (Hold) companies report quarterly earnings. Chipmaking giant Broadcom (AVGO - Free Report) is expected to see +31.7% growth on earnings, +24.5% on revenues — largely due to AI infrastructure supply — and warehouse membership behemoth Costco (COST - Free Report) is projected to yield +11.5% earnings growth on +8.3% revenues. Lululemon (LULU - Free Report) , on the other hand, is estimated to come in -22.7% lower on earnings and +3.5% on revenues.