Reply To: Traders Market Weekly: Embrace the Chaos in 2023


The equity futures market deteriorated after the 8:30 a.m. ET data releases.

The S&P 500 futures are down 30 points and are trading 0.9% below fair value.
The Nasdaq 100 futures are down 125 points and are trading 1.1% below fair value.
The Dow Jones Industrial Average futures are down 218 points and are trading 0.7% below fair value.

The third estimate for Q3 GDP revealed that consumer spending increased 2.3%, versus 1.7% in the second estimate, and 2.0% in the second quarter. That upward revision helped drive an upward revision for Q3 GDP growth to 3.2% (2.9%) from the second estimate of 2.9%. The GDP Price Deflator was revised up to 4.4% 4.3%) from 4.3%.

The key takeaway from the report is that growth in the third quarter was stronger than previously expected and above potential, which is also why the Fed continued to raise rates aggressively in the third quarter.

The latest weekly initial claims report won’t silence the concerns about future Fed tightening either. Initial claims for the week ending December 17 increased by 2,000 to 216,000 (consensus 225,000). Continuing claims for the week ending December 10 decreased by 6,000 to 1.672 million.

The key takeaway from the report is that initial claims remain at remarkably low levels associated with a tight labor market. In turn, a tight labor market will remain associated with more Fed tightening.