Seasonality Keeps Claims Below 200K?

Mar 23, 2023

Initial jobless claims remained healthy this week with another sub-200K print.  Claims fell modestly to 191K from last week’s unrevised reading of 192K.  That small decline exceeded expectations of claims rising up to 197K. Given claims continue to impress, the seasonally adjusted number has come in below 200K for 9 of the last 10 weeks. By that measure, it has been the strongest stretch for claims since last April when there were 10 weeks in a row of sub-200K prints.  Prior to that, from 2018 through 2020 the late March and early April period similarly saw consistent readings under 200K meaning that some of the strength in the adjusted number could be on account of residual seasonality.

In fact, this point of the year has some of the weeks in which claims have the most consistently historically fallen week over week. Taking a historical median of claims throughout the year, claims tend to round out a short-term bottom in the spring before an early summer bump. In other words, seasonal strength will begin to wane in the coming months.

While initial claims improved, continuing claims worsened rising to 1.694 million from 1.68 million the previous week.  Albeit higher, that remains below the 2023 high of 1.715 million set at the end of February.

Have you tried Bespoke All Access yet?
Bespoke’s All Access research package is quick-hitting, actionable, and easily digestible. Bespoke’s unique data points and analysis help investors better visualize underlying market trends to ultimately make more informed investment decisions.
Our daily research consists of a pre-market note, a post-market note, and our Chart of the Day. These three daily reports are supplemented with additional research pieces covering ETFs and asset allocation trends, global macro analysis, earnings and conference call analysis, market breadth and internals, economic indicator databases, growth and dividend income stock baskets, and unique interactive trading tools.
Click here to sign up for a one-month trial to Bespoke All Access, or you can read even more about Bespoke All Access here.

A Fed Day Like Most Others

Mar 23, 2023

Yesterday’s Fed decision and comments from Fed Chair Powell gave markets plenty to chew on.  As we discussed in last night’s Closer and today’s Morning Lineup, there have been a number of conflicting statements from officials and confusing reactions in various assets over the past 24 hours.  In spite of all that uncertainty, the S&P 500’s path yesterday pretty much followed the usual script.  In the charts below we show the S&P’s average intraday pattern across all Fed days since Powell has been chair (first chart) and the intraday chart of the S&P yesterday (second chart).  As shown, the market’s pattern yesterday, especially after the 2 PM ET rate decision and the 2:30 PM press conference, closely resembled the average path that the market has followed across all Powell Fed Days since 2018.

The S&P saw a modest bounce after the 2 PM Fed decision and then a further rally right after Powell’s presser began at 2:30 PM.  That initial post-presser spike proved to be a pump-fake, as markets ultimately sold off hard with a near 2% decline from 2:30 PM to the 4 PM close.

So what typically happens in the week after Fed days?  Since 1994 when the Fed began announcing policy decisions on the same day as its meeting, the S&P has averaged a decline of 10 basis points over the next week.  During the current tightening cycle that began about a year ago, market performance in the week after Fed days has been even worse with the S&P averaging a decline of 0.99%.  However, when the S&P has been down over 1% on Fed days (like yesterday), performance over the next week has been positive with an average gain of 0.64%.  As always, past performance is no guarantee of future results.

Have you tried Bespoke All Access yet?

Bespoke’s All Access research package is quick-hitting, actionable, and easily digestible. Bespoke’s unique data points and analysis help investors better visualize underlying market trends to ultimately make more informed investment decisions.

Our daily research consists of a pre-market note, a post-market note, and our Chart of the Day. These three daily reports are supplemented with additional research pieces covering ETFs and asset allocation trends, global macro analysis, earnings and conference call analysis, market breadth and internals, economic indicator databases, growth and dividend income stock baskets, and unique interactive trading tools.
Click here to sign up for a one-month trial to Bespoke All Access, or you can read even more about Bespoke All Access here.