After four straight weeks where jobless claims came in lower than forecast, we have now seen two straight weeks where jobless claims have disappointed to the upside.  Last week, claims came in 10K ahead of forecasts and today’s report showed claims coming in 5K higher than expected.  While economists were forecasting claims to fall back down to 240K, the actual reading came in at 245K, which was down 10K from last week’s reading of 255K.  Despite the higher than expected reading, claims have now been below 300K for 118 straight weeks.

Heading into last week’s report, we were expecting the four-week moving average to make a new cycle low, but the higher than expected reading quashed that plan, and with this week’s reading of 245K, it is unlikely that we will see a new low in claims anytime soon.  To get there, the four-week moving average would need to drop down to 235.5K from the current level of 242K.  That doesn’t sound like a lot, but in the next two week’s we will be dropping readings in the low 230K range, so the four-week moving average is likely to drift higher.

On a non-seasonally adjusted (NSA) basis, claims fell from 231.6K down to 212.2K.  For the current week of the year, this is more than 100K below the average going back to 2000 and the lowest for this specific week since 1974.

With everything seemingly okay in the equity world again after the major averages all hit new highs to close out last week, individual investors turned more bullish in the latest week.  According to the monthly survey from AAII, bullish sentiment increased from a very depressed level of 26.92% up to a five week high of 35.43%.  While it’s a far ways from a majority (a level we haven’t seen now in a record 127 straight weeks), this is the first time bulls have been in the plurality in five weeks.

Although bullish sentiment increased, bearish sentiment only saw a modest decline.  As shown in the chart below, negative sentiment declined by just two percentage points but did manage to fall back below 30%.  Also, that uptrend that had been in place since the lows in late 2015 appears to have been broken.

With bullish sentiment on the rise and bearish sentiment barely budging, the neutral camp really shrunk this week falling from above 40% down to 35%.

The Tech-heavy Nasdaq 100 is up more than 20% year-to-date, and as shown in the chart below, the index is now 24.8% above its Dot Com bubble peak hit on March 27th, 2000.  In the mid to late 2000s, there were plenty of investors that thought they wouldn’t live to see the Nasdaq take out its Tech-bubble highs, but the index’s surge over the last year has made it a reality.

While the Nasdaq 100’s chart looks pretty gorgeous right now, we can’t help but wonder when the next downturn will come.  Remember, stocks do go down sometimes!

Since 1990, the Nasdaq 100 is up nearly 5x as much as the S&P 500 in terms of simple price appreciation.  Talk about outperformance.

Below is a look at the best and worst performers in the Nasdaq 100 (current members) since the Dot Com peak on March 27th, 2000.  One fifth of the index is up more than 1,000% since those prior highs, including names like Apple (AAPL), NVIDIA (NVDA), Amazon.com (AMZN), and Starbucks (SBUX).

Even more interesting to us is that 15 stocks in the index still haven’t taken out their Dot Com bubble highs.  Stocks like Cisco (CSCO), Yahoo! (YHOO), and Intel (INTC) are all still 50%+ below their 3/27/00 price levels.

Leading up to each month’s Non-Farm Payrolls (NFP) report, we always like to look at a variety of secondary employment-related indicators for a sign of what we might be able to expect from the main report.  Because this month’s payrolls report fell on the second day of the month, a number of the secondary indicators weren’t released until after the actual report.  However, in the accompanying table, we put together a compilation of them to show how they changed between April and May.

After last Friday’s NFP report, we came across a number of stories suggesting that the miss in headline Non-Farm Payrolls was leading to skepticism on the part of investors regarding additional rate hikes following a widely expected hike in June.  According to a Bloomberg story, “investors increasingly doubt the central bank’s projection for additional hikes following soft reports on U.S. employment and inflation.”  What was puzzling about this line of reasoning was that despite the weaker than expected headline reading in Non-Farm Payrolls, every other indicator we tracked in our table to the right was either inline with or ahead of expectations.  Additionally, in the cases of ADP Private Payrolls and the Employment component of the ISM Services report, the margin of upside surprise was actually quite strong.  In fact, in May’s ISM Services report, the Employment component printed its fifth highest level in the history of the report (since 1997) and the best single month in nearly two years (July 2015).  Yes, NFP was on the weak side, but with every other indicator coming in inline or to the upside, it’s hard to call the labor market soft.  Also, keep in mind that this table didn’t include the most recentl JOLTS report for April which hit an all-time high.