Jobless Claims Nearing New Highs

Apr 20, 2023

Jobless claims have continued to weaken with this week’s release, rising by 5K to 245K versus expectations of no change from last week’s upwardly revised 240K print.  At current levels, claims sit at the high end of the range since the start of 2022 and only a couple thousand below last month’s high.

Prior to seasonal adjustment, claims have essentially come in right inline with the reading for the same week last year and the few years prior to the pandemic.  As shown in the second chart below, claims tend to experience a little bit of a bounce around this point of the year before resuming a move lower through the late spring.

Continuing claims were equally disappointing this week rising to 1.865 million, 40K above expectations.  Although the increase to initial claims has not resulted in a new high, the 61K increase for continuing claims leaves the indicator at the highest level since late November 2021.

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Bulls Keep Coming Back

Apr 20, 2023

The S&P 500 has been little changed in the past week resulting in little change to sentiment according to the latest AAII survey. 27.2% of respondents reported as bullish this week, up 1.1 percentage points versus the previous week. Albeit higher, that does not result in any sort of new high as bullish sentiment sits right in the middle of the past year’s range

Bearish sentiment likewise picked up this week rising from 34.5% to 35.1%.  That is only the highest level in three weeks as bearish sentiment remains relatively muted versus the significantly elevated readings of the past year.

With that said, sentiment continued to favor bearishness with the bull-bear spread sitting at -7.9.   This week marks the ninth in a row in which bearish sentiment outweighed bullish sentiment.

Given both bullish and bearish readings rose, each group borrowed from the neutral pool which pivoted off of a recent high of 39.5% down to a still elevated 37.7%.

Factoring in other sentiment surveys, there was more bullish tones. The NAAIM Exposure index indicated active managers added long exposure to equities and the Investors Intelligence survey showed the highest bull-bear spread since the first week of 2022. That leaves the AAII survey as the only one of the three with sentiment readings that are more bearish than historically normal.

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