Futures are in the green ahead of Thursday’s opening bell, with both the S&P 500 and the Nasdaq set to pounce on new intra-day all-time highs. Positive sentiment that a congressional stimulus package will finally get passed this week conjoins with the first round of coronavirus vaccines making their way into the arms of healthcare professionals and other high-risk individuals. New economic data this morning came in mixed.
Initial Jobless Claims are now clearly moving in the wrong direction: 885K new claims were made last week, up from an upwardly revised 862K the previous week. When we consider that on November 6th we were at 711K new weekly claims — with visions of sub-700K dancing in our heads — we’re now in danger of breaking back up through 900K new claims. Aside from a Thanksgiving week anomaly, the chart of fresh jobless claims is shooting up rather gruesomely.
Continuing Claims is still going down, but remember these report a week in arrears and when out-of-work individuals run out of weeks to make long-term claims, they currently are relegated to Pandemic Unemployment Assistance (PUA), which is scheduled to expire the day after Christmas. Without this provision, literally millions of Americans will have no unemployment benefits coming in until Congress finally figures something out.
Housing Starts for November is on the complete other side of the economic spectrum: 1.547 million seasonally adjusted, annualized units beat the estimated 1.535 million and rose 1.2% month over month, from already historically strong levels in new housing creation. Demand continues to outpace supply, leading to higher prices in housing, but the homebuilders are working hard through the winter months to accommodate home buyers.
Building Permits in November rose 6.2% month over month, to 1.639 million — blowing away estimates for 1.57 million. Permits, a forward indicator of future starts, look to be just as demand-driven as monthly starts numbers. These figures are seasonally adjusted, but even still strength in future housing looks very robust. It is one sector in which Fed Chair Jay Powell indicated yesterday was gaining inflation traction.
If there is one criticism of this new housing data, it is that all the growth is happening on the multi-unit side, where single-family housing is flat. While homebuilding is homebuilding in some ways, those higher-end single-family units are really where the economy sets sail. Multi-family units tend to cost less and use fewer supplies per unit. Again, the issue is homebuilder supply: according to Diana Olick this morning on CNBC’s “Squawk Box,” there are currently 90% more homes sold that are not yet started than there were a year ago.
Finally, Philly Fed numbers for December followed Empire State’s disappointing print earlier in the week: 11.1 was well below the 20 estimated, and less than half the 26.3 reported a month ago. This is the lowest read since May, which was the last time productivity in the Philadelphia region — the U.S.’s sixth-largest city — put up a negative headline. Covid-19 spread is a likely culprit for this downward trajectory; clearly, market participants are more than willing to look past situations like these.
Image: Bigstock
Initial Claims Hit Record High in Three Months
Futures are in the green ahead of Thursday’s opening bell, with both the S&P 500 and the Nasdaq set to pounce on new intra-day all-time highs. Positive sentiment that a congressional stimulus package will finally get passed this week conjoins with the first round of coronavirus vaccines making their way into the arms of healthcare professionals and other high-risk individuals. New economic data this morning came in mixed.
Initial Jobless Claims are now clearly moving in the wrong direction: 885K new claims were made last week, up from an upwardly revised 862K the previous week. When we consider that on November 6th we were at 711K new weekly claims — with visions of sub-700K dancing in our heads — we’re now in danger of breaking back up through 900K new claims. Aside from a Thanksgiving week anomaly, the chart of fresh jobless claims is shooting up rather gruesomely.
Continuing Claims is still going down, but remember these report a week in arrears and when out-of-work individuals run out of weeks to make long-term claims, they currently are relegated to Pandemic Unemployment Assistance (PUA), which is scheduled to expire the day after Christmas. Without this provision, literally millions of Americans will have no unemployment benefits coming in until Congress finally figures something out.
Housing Starts for November is on the complete other side of the economic spectrum: 1.547 million seasonally adjusted, annualized units beat the estimated 1.535 million and rose 1.2% month over month, from already historically strong levels in new housing creation. Demand continues to outpace supply, leading to higher prices in housing, but the homebuilders are working hard through the winter months to accommodate home buyers.
Building Permits in November rose 6.2% month over month, to 1.639 million — blowing away estimates for 1.57 million. Permits, a forward indicator of future starts, look to be just as demand-driven as monthly starts numbers. These figures are seasonally adjusted, but even still strength in future housing looks very robust. It is one sector in which Fed Chair Jay Powell indicated yesterday was gaining inflation traction.
If there is one criticism of this new housing data, it is that all the growth is happening on the multi-unit side, where single-family housing is flat. While homebuilding is homebuilding in some ways, those higher-end single-family units are really where the economy sets sail. Multi-family units tend to cost less and use fewer supplies per unit. Again, the issue is homebuilder supply: according to Diana Olick this morning on CNBC’s “Squawk Box,” there are currently 90% more homes sold that are not yet started than there were a year ago.
Finally, Philly Fed numbers for December followed Empire State’s disappointing print earlier in the week: 11.1 was well below the 20 estimated, and less than half the 26.3 reported a month ago. This is the lowest read since May, which was the last time productivity in the Philadelphia region — the U.S.’s sixth-largest city — put up a negative headline. Covid-19 spread is a likely culprit for this downward trajectory; clearly, market participants are more than willing to look past situations like these.