Thursday economic data: Softening yet solid
Nasdaq gains ~0.5%, S&P 500 up slightly; Dow dips
Cons disc leads S&P 500 sector gainers; Materials down most
Euro STOXX 600 index up ~0.1%
Dollar, crude lower; gold rises; bitcoin up >1.5%
U.S. 10-Year Treasury yield falls to ~4.20%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
THURSDAY ECONOMIC DATA: SOFTENING YET SOLID
Thursday's data provided a nice three-course meal for the Fed (and investors) who are hungry for seemingly contradictory economic signals: the economy is softening but sure-footed enough to avoid sliding into recession.
Last week, 227,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI.
That's a 6.2% decline from the previous week and 15,000 fewer than analysts expected.
The underlying trend, as expressed by the four-week moving average of initial claims, could best be characterized as sideways with an upward bias.
But only slightly upward.
"There is no sign of incipient recession in these figures," writes Carl Weinberg at High Frequency Economics. "The labor market is softening but not imploding."
"Fed policy is aimed at supporting the economy and the job market before a recession shapes up," Weinberg adds. "There is no call for radical monetary easing or fiscal stimulus here."
Stronger evidence of a softening labor market can be found in ongoing claims USJOBN=ECI. Reported on a one-week lag, continuing filings for jobless benefits jumped 1.5% to 1.897 million - the highest level in three years - suggesting it's taking longer for laid off workers to find acceptable replacement gigs.
Next, S&P Global is out with its preliminary "flash" take on the current month manufacturing USMPMP=ECI and services USMPSP=ECI PMIs (purchasing managers index).
Both indexes showed modest improvements, but manufacturing, at 47.8, is still in contraction, while the 55.3 services score remains in expansion territory.
A PMI reading south of 50 indicates monthly contraction, and above that level signifies expansion.
October saw business activity continue to grow at an encouragingly solid pace," says Chris Williamson, chief business economist at S&P Global. "Demand has also strengthened, as signaled by new order inflows hitting the highest for nearly one-and-a-half years, albeit with both output and sales growth limited to the services economy."
Williamson goes on to note that businesses are taking a cautious stance ahead of the U.S. presidential election.
And finally, the sales of freshly constructed U.S. homes USHNS=ECI rebounded in September, rising 4.1% to 738,000 units at a seasonally-adjusted annualized rate (SAAR), according to the Commerce Department.
The topline landed 2.5% to the north of consensus.
And to put sugar on top, August's 4.7% decline was revised to a much shallower 2.3% drop.
The number seems to contradict weak housing starts/building permits data released last Friday, as well as the still-pessimistic NAHB homebuilder sentiment from a week ago Wednesday.
The new construction side of the sector has been the beneficiary of strained pre-owned inventories arising from owners' reluctance to enter the market with mortgage rates drifting along at elevated levels.
But the Fed's pivot to its rate cutting phase, likely has would-be buyers biding their time on the sidelines, waiting for lower borrowing costs.
Or at least that's what the prevailing wisdom's been telling us.
"The obvious factor pointing to higher home sales last month is the fall in mortgage rates from the mid-summer to late September," says Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.
Pointing to Hurricanes Harvey and Milton, along with the recent rebound in mortgage rates, Allen adds "this might be the strongest new home sales number for a while."
(Stephen Culp)
*****
FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:
S&P 500, NASDAQ, RALLY, GET BOOST FROM TESLA - CLICK HERE
S&P 500 INDEX SEES ANOTHER SPOOKY TURN - CLICK HERE
ASIA FUNDS' CHINA HOLDINGS AT FIVE YEAR HIGH - HSBC - CLICK HERE
GREEN LIGHT AHEAD? CITI SEES YEAR-END AUTO RALLY - CLICK HERE
A MORE INTERESTING WAY TO PLAY THE YIELD CURVE - CLICK HERE
STOXX UP, MOST SECTORS IN THE GREEN -CLICK HERE
EUROPE BEFORE THE BELL: TESLA AND OTHER EARNINGS FOR BREAKFAST - CLICK HERE
PMIS TAKE CENTRE STAGE - CLICK HERE
Initial jobless claims and JOLTS firings https://reut.rs/4e2qIRs
Continuing claims https://reut.rs/48j3G7M
Flash PMI https://reut.rs/4fjxvrk
New home sales https://reut.rs/4hx4iLt
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
