Reply To: Traders Market Weekly: Squeeze Dynamics and Market Fragility


Initial jobless claims for the week ending November 18 decreased by 24,000 to 209,000 (consensus 227,000) while continuing jobless claims for the week ending November 11 decreased by 22,000 to 1.840 million.

The key takeaway from the report is that this report covers the period in which the survey for the November employment report is conducted, so the low level of initial jobless claims should support expectations for some decent growth — certainly at this point in the Fed’s tightening cycle — for nonfarm payrolls.

Durable goods orders for October declined 5.4% month-over-month (consensus -3.1%) following a downwardly revised 4.0% increase (from 4.7%) in September. Excluding transportation, durable goods orders were flat month-over-month ( consensus 0.2%) following a downwardly revised 0.2% increase (from 0.5%) in September.

The key takeaway from the report rests in the recognition that nondefense capital goods orders, excluding aircraft — a proxy for business spending — dipped 0.1% month-over-month following a 0.2% decline in September. That isn’t a major drop-off by any means, but it does fit with a softening environment in the manufacturing space.

The final reading for the University of Michigan Consumer Sentiment Index for November came in at 61.3 (consensus 60.9), versus the preliminary reading of 60.4 and October’s final reading of 63.8. In the same period a year ago, the index stood at 56.7. November marks the fourth straight month that consumer sentiment has declined.

The key takeaway from the report is the jump in inflation expectations, which is not what the Fed wants to see following 525 basis points worth of tightening already. It is the type of indication that will keep the Fed entertaining the thought that further tightening may still be necessary.

The MBA Mortgage Applications Index was up 3.0% week-over-week with refinance applications up 2% and purchase applications up 3%