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March 21: Jobs Scenario Improving

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Happy spring!

The market seems to have been celebrating for awhile, but the results are panning out: Jobless Claims are way down year over year, registering 336K for the week. Though this is up 2,000 from last week's adjusted 334K, the fact that we have a consistent level below 350K has to be seen, even by the biggest naysayers of today's economy, that things are much better than they have been. It wasn't all too long ago we spent YEARS over the 400K mark in Jobless Claims.

Existing Home Sales, Leading Indicators and the Philly Fed survey are on tap for a busy Thursday. Any of these bringing relatively bad news could challenge upward momentum in the markets. But based on Jobless Claims alone, one has to point this out: the market has been right again.

Need a crystal ball? Check the stock market.

Yes, it's true the big companies reporting "before" earnings season like FedEx (FDX) and Oracle (ORCL) missed Q1 estimates, but the macro-view has been nothing but positive lately (…at least if you don't investigate certain small European islands too closely). Lennar (LEN) posted higher earnings and revenues yesterday, helping articulate the ongoing boom in the housing market.

Housing gaining traction is not only an excellent touchstone for market bulls, but it's also quite different from the scenario of the past several years. As you may remember, we'd been wandering through the desert (for what seemed like 40 years, though it was really only 4) waiting for housing to "build" again. Housing positively affects so many sectors within our economy, it's very likely appearing to be a silver bullet for America now that it's finally come around.

Then again, as a leading indicator, market bears still have reason to squawk -- everything's up ("Uh oh!"). And right on time, futures are down this morning. Europe was down today. Have we already priced in all the good news from housing? That's surely an oversimplification, but every once in awhile, there's a good reason someone poops the party.

Existing Home Sales are scheduled for release today at 10:00 AM EST. Our consensus estimate shows this indicator is expected to increase to 5.01 million from the annual pace of 4.92 million reported in January.



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