Weekly Jobless Claims were expected to have increased by 14K based on surveysof economists and analysts; claims as reported fell 4K to 364K, the lowest weekly filings since April 2008. Continuing claims fell 79K to 3.55 million; continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 136,300 to 3.51 million in the week ended Dec. 3rd. Declining claims for the past three weeks is evidence that firings are declining and in turn should foreshadow an increase in employment and possible consumer spending.
At 830am the final read on Q3 GDPis expected to be unchanged from the Preliminary Report at +2.0%, growth was revised lower to +1.8%. Stock indexes were strong prior to 830am. Claims added some support but the GDP weighed on the other side. Nevertheless the indexes managed to hold gains but less than before the data.
At 930am the DJIA opened quietly +20, the 10-Year Note was +9/32 at 1.94% (-2 bp) and mortgage prices were +4/32 (.09 bp).
At 955am the University of Michigan Consumer Sentiment Index was expected to be 68.0 from 67.7 but the index jumped to 69.9; Current Conditions Index at 79.6 from 77.9 and the 12-Month Outlook Index at 70.0 frm 64.0. Much stronger Consumer Sentiment added a few points to the DJIA but not much. The reaction in the bond market was also subdued.
The final data today at 1000am is November Leading Economic Indicators expected up 0.3% increased +0.5%.
Europe still gets most of the attention and there’s always something to talk about given the cliff the region is teetering on. Not much market-driving info today. The remainder of the day will be on thinner volume with the equity market taking the lead. So far this morning the stock market is struggling with the weaker GDP report for Q3 and better Weekly Jobless Claims. The bond market is focused on the soft GDP but will lose gains if the equity markets take hold later today. Conversely if indexes succumb. bonds will do better. That said, we do not expect much today with the Christmas Holiday beginning tomorrow.
Interesting reactions today in the stock and bond markets;the data reported for the most part was better than thought, except toe Q3 GDP. After examining all the data the two markets are essentially unchanged from levels prior to the 830am reports. Still a bullish bias for the mortgage rate markets but if the holidays were not a factor the bond market would likely be soft. With the mess in Europe investors are not likely to lighten up on safety moves.
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