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Initial Claims Higher-Than-Expected

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Pre-market futures are keeping mildly positive this morning, as they were yesterday at the closing bell. We do have seasonal lower volume overall, so it’s nice to see the moves at these levels remain in the green. The Dow is up another +45 points, the S&P 500 +11 and the Nasdaq +63 points at this hour. Bond yields are also cooling slightly: 3.83% on the 10-year, 3.97% on the 2-year.

Jobless Claims Stay Well-Behaved

This being Thursday morning, we see new Weekly Jobless Claims flattish with last week’s tallies. Initial Jobless Claims of 232K last week were a smidge higher than the 230K expected, and a tad more than the inched-up revision of 228K the prior week. Back at the end of July, we saw a jump to 250K on new claims, which appeared to signal something of an unraveling in the labor market that was not to be — at least not yet.

Continuing Claims, reported a week in arrears from new claims, reached 1.863 million, above the slightly revised 1.859 million from the previous week. This is now the 11th straight week above 1.8 million longer-term jobless claims, though it woulds appear we’re plateauing at present levels instead of roaring ahead toward 2 million. It’s at that point we’ll see the psychological impact of a weakening labor market, but again — we’re not there yet.

More Retail Q2 Earnings: WSM, BJ

High-end home furnishings retailer Williams-Sonoma (WSM - Free Report) posted mixed results in its Q2 report this morning ahead of the opening bell. Earnings of $1.74 per share outperformed expectations by a solid dime. Yet revenues for the quarter, at $1.79 billion, is slightly off the $1.82 billion in the Zacks consensus. Same-store sales came in -3.3% year over year, and guidance for next quarter is for flat growth on earnings, -3% on sales. This has led to a -7% sell-off in early trading; shares are still up more than +30% year to date.

Discount warehouse club BJ’s Wholesale (BJ - Free Report) , representing the other end of the consumer goods spectrum from Williams-Sonoma, outpaced estimates on both top and bottom lines: earnings of $1.09 per share beat the Zacks consensus by 9 cents, while revenues of $5.21 billion bettered expectations by +0.95%. Membership was up +9% year over year. Yet pre-market shares are down -6%, as its +30% gains year to date look to be allowing for a “sell the news” moment. 

Econ Data After Today’s Open

S&P flash PMI Services and Manufacturing results for August are expected later this morning, hoping to improve on last month’s figures. Services last time around came in at +55.0 — nicely above the 50-level which indicates growth versus contraction — while Manufacturing notched +49.6 last time around. Then again, weaker numbers would help pound the table for a Fed rate cut next month, so we’re basically “win-win” right here.

Existing Home Sales for July are expected to notch up slightly, from +3.89 million seasonally adjusted, annualized units reported for June — the lowest monthly tally so far in 2024 — to +3.95 million anticipated in today’s report. But it will be a loosening of mortgage rate policy, directly a result of the Fed taking down interest rates at its September 18th meeting, where we might expect a meaningful shift toward higher existing home sales levels. We were last above +4 million in May of this year, above +5 million in June of 2022.


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