Jobless claims halts equity momentum

Good day! As we headed into Thursday morning, the price action in the market was mixed. The bullish bias that we saw in the early hours of the morning led to some slightly higher highs in the index futures ahead of the open, but the larger time frames had the potential to play out either way and lacked a strong up or downside bias.

The 8:30 a.m. ET unemployment claims report strongly influenced the morning's trade. The futures market took a hit when U.S. jobless claims jumped to three-month highs. The largest one-week jump in nearly six months took the market by surprise. According to the Labor Department, filings for first-time unemployment benefits rose from 410,000 in the previous week to 445,000 last week. Analysts had anticipated a decline to 405,000. The four-week moving average for new claims rose by 5,500 to 416,500. The small bright spot was that continuing claims fell from 4.13 million to 3.88 million. The unemployment rate, however, remained at 9.4%.

Dow Jones Industrial Average

The unemployment data was not the only data to catch the market's eye. The Labor Department also reported that U.S. producer prices rose 1.1% in December, following an 0.8% increase in November. Excluding food and energy, prices rose 0.2%, which was in line with expectations, but the overall picture was still worrisome. The largest price jump was due to increased food prices. Fresh and dry vegetables shot higher by 22.8%, while fresh fruit prices were up 15.4% for the month of December. Heating oil also posted sharp gains of 12.3% for the month.

Meanwhile, according to the Commerce Department, the U.S. trade gap narrowed unexpectedly from $38.4 billion in October to $38.3 billion thanks to an increase in exports that totaled $156.9 billion. This is the strongest they have been since August 2008. Exports to China amounted to nearly $10 billion - a record high. Analysts were expecting the trade gap to widen by $1.1 billion.

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