The Department of Labor’s weekly Initial Jobless Claims released this morning showed a 10K increase from last week’s upwardly revised reading of 217K.  Now at 227K, claims are at their highest level since May 3rd when they were slightly higher at 228K. This brings the indicator towards the upper end of the past year’s range, but claims also still remain very low historically.  This week marked a record 90 weeks that claims came in at or below 250K. The previous record stood at 89 weeks ending January 10th, 1970.  Additionally, the streak of readings at or below 300K rises to its 225th consecutive week.

The less volatile four-week average also moved slightly higher this week rising to 221.25K from 219K last week.  Like the weekly data, the moving average currently sits at the upper end of its range from the past year and the last time it made a new low was back in April. As the moving average is off of these recent lows, it has also moved higher YoY for the ninth week in 2019. In 2018, there wasn’t a single week with a YoY increase and over the course of all of 2017, there were only 5 weeks with YoY increases.

Non-seasonally adjusted (NSA) jobless claims saw yet another year-over-year increase as claims rose to 224.1K versus 222.8K one year ago.  Now just about halfway through 2019, there have been ten weeks with a YoY increase in the NSA data (this is the same case for the seasonally adjusted data as well).  Like the moving average, for this point in the year, this is a significant increase in the frequency of these increases from prior years. For reference, over the course of all 52 weeks in the entire year, 2018 only had two weeks and 2017 only had seven weeks with a similar YoY increase. In other words, labor market data is still at a strong level—NSA data is still well below the average for the current week since 2000, SA data has held onto impressive streaks, etc.—but it also has not been improving at anywhere near the same rate as we saw in 2017 and 2018. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

In a post earlier this week, we provided an update to the Citi Economic Surprise indices broken out by region.  With economic data in the US continuing to disappoint this week, the Citi Surprise index (percentage of economic indicators that are beating vs. missing estimates) for the US is coming increasingly close to taking out its late April low and declining to its lowest levels in two years.  What’s also notable about the current reading is that at the most recent reading of -67.5, the surprise index for the US is more negative than any other country or region that this series tracks.

Below we compare the Citi surprise reading for the US and Europe over the last twelve months, and what a reversal it has been.  Heading into 2019, economic data in the US was coming in much better relative to expectations versus Europe, but ever since then, data in the US has been getting progressively worse relative to expectations, while data in Europe has been consistently improving.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and stay on top of all the latest economic trends.

As the S&P 500 moved up towards an all-time closing high last week, we noted bullish sentiment levels were relatively muted in spite of this price action. We also highlighted that it is not exactly common for the market to reach new highs when sentiment is this subdued.  But as the S&P 500 reached those new all-time highs one week ago today—followed by several sessions of selling—investors haven’t been excited by the new highs.  This week’s AAII survey of investors showed hesitation more than anything with very small changes across the board. The percentage of investors reporting as bullish rose only 0.08% to 29.59%.  Bullish sentiment saw a similar sized move only one month ago when it had risen from 24.71% to 24.79% in the final week of May. Given these readings, bullish sentiment remains at the lower end of its normal range sitting over 8.5 percentage points from the historical mean.

Bearish sentiment perfectly mirrored bullish sentiment this week as the percentage of investors pessimistic investors falling by just 0.08% to 32.05% and still above the historical average of 30.32%.

Neutral sentiment was completely unchanged this week. Holding firm at 38.36%, this was the first time that neutral sentiment saw no change since February 26, 2009.  Like bearish sentiment, while off of recent highs, neutral sentiment remains elevated above the historical average of 31.5%.

Again, across the board, the changes in sentiment levels in the AAII survey were very small this week.  In fact, bullish, bearish, and neutral sentiment all simultaneously moving less than 0.1% is something that rarely has happened in the history of the survey. This was the first occurrence in over 20 years. The prior times this has occurred, twice in 1999 and once in 1995, all saw no change in these readings week-over-week (prior to 2000, AAII readings weren’t expressed in decimals). While it is a small sample size, forward performance has generally leaned positive going forward, although we wouldn’t put much weight into it.Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

This morning the BEA released its third and final estimate of Q1 GDP growth. Economists were expecting a small revision higher to 3.2%, but the final reading on GDP growth in Q1 was 3.1%, unchanged from the second estimate on a rounded basis and +6 bps actual. In the table below, we show the evolution of the release from Q4’s final reading to today’s release, with the prior estimate included as well. Notable revisions higher include non-auto durables consumption, software spending, some other categories of fixed investment, and state/local government spending. Notable downward revisions included autos, household services spending (ex health care, which was revised up), and output of non-profit institutions. Inventories were also revised down slightly. Start a two-week free trial to Bespoke Institutional to access our entire suite of research services.

Despite news that its most popular show would no longer be available on the streaming service beginning in 2021 and that one of its top creative directors was jumping ship for Disney (DIS), shares of Netflix (NFLX) have managed to rally today and are actually slightly outperforming the broader market.  While NFLX is higher today, the stock remains stuck in a major trading range between the mid-$330s and mid-$380s.  That may sound like a wide level, but believe it or not, the current 14% trading range that NFLX has been stuck in for the last 100 trading days is the narrowest in the stock’s history.  For some perspective on how the current range compares to history, NFLX’s average 100-trading day range has been 78.1% or more than 5 times the current range!  You may also recall that just two weeks ago, we also highlighted the narrow range in the stock, and since then the range has narrowed by another five percentage points.

So what happens following periods when NFLX trades in a narrow range? In the 16 years that NFLX has been public, there has only been one other time where the stock traded in a 100-trading day range of less than 20%.  That one period was in 2017, and while it doesn’t get any smaller than a sample size of one, that period ended up being a short period of consolidation before continuing higher.  A key difference between the two periods, though, is that back in 2017, the sideways range followed a new all-time high in NFLX’s price, while the current sideways range comes more than a year after the stock last hit a high. Start a two-week free trial to Bespoke Institutional to access our entire suite of research services.