The indices continue to ride the post-Fed meeting wave of the upside in pre-market activity today, as the acceleration in asset purchases in early 2022 was greeted with understanding and relief yesterday afternoon. âUnderstandingâ because this Fed decision was indicated weeks ago by Fed Chairman Powell; “Relief” because the Fed bothered yesterday to say that reducing asset purchases to zero is separate from rising interest rates.
So, after a sharp rise in the last hours of Wednesday’s trading day, Thursday morning, we see the Dow rising +270 points, the Nasdaq +50, and the S&P 500 +30 points. We also have plenty of new economic data this morning that helps smooth our narrative in the final two weeks of 2021.
Initial jobless claims rose above 200K to 206K last week, following the post-pandemic low we continue to see from the previous week, which was revised up to 188K. Yet under or almost under 200K still looks something like pre-pandemic unemployment claims, which is what we’re looking for.
Continuing complaints hit a post-Covid low (which makes sense, as it is against initial claims data from last week) at 1.845 million, down from the 1.999 million reported a week ago. These jobless claims numbers – both new and longer term – appear to be normalizing again to pre-pandemic levels, which matches most of the other employment data we’ve gotten over the course. the last few weeks. Good news; we don’t sweat the 206K title.
Starts for November exceeded expectations: 1.68 million was well above the estimate of 1.56 million, and sharply up from the 1.50 million revised down in previous months. It’s also encouraging – the housing market had been stuck in the mud for a very promising start to the year, due to supply chain issues leading to construction delays and MUCH higher housing costs. This is the start of slower boot data depending on the season, so it’s nice to see an increase anyway.
Building permit, also for November, was also able to exceed estimates: 1.71 million in the headline was better than the expected 1.66 million, and a step up from October’s unrevised 1.65 million. Again, we’re headed in the right direction here.
Philly fed for December was a big failure: 15.4 against 30.0 expected, and 39.0 for the previous month. These types of data – much like the Empire State survey in this way – can be a bit volatile from month to month. That said, it is by far the weakest month of the past 12. On the flip side, it follows a headline from October, so we’ll reserve judgment until we see if it’s just some shaking volatility, the results of a Covid epidemic, or whatever.
Industrial production for November reached + 0.5%, 10 basis points below estimates. The previous month, however, rose 10 basis points to 1.7%. We’re still down from the spring 2021 highs, but we’ll take it. Capacity utilization peaked post-Covid this morning, at 76.8%. In fact, it was the highest number in two full years. Also a nice increase compared to 76.5% revised upwards from the previous month
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