In addition to last week’s print, initial jobless claims data has seemed to have left the worrisome signs from earlier in the year in the rearview mirror. This morning’s stellar print of 196K was the lowest seasonally adjusted number since October 4, 1969 when claims came in at 193K.  To further reiterate the strength of this indicator, the streak of consecutive weeks below 300K has now grown to 214; the longest such streak ever.  Additionally, with older data having been revised a couple of weeks ago, the streak of readings at or below 250K is back on; now at 65 weeks.  That is the second longest streak in the history of the data.  The only one longer ended on January 1, 1970 at 89 weeks. Start a two-week free trial to Bespoke Premium to access our interactive economic indicators monitor to keep up to date on Initial Jobless Claims releases as well as many other US and global economic indicators.

Earlier this year, we highlighted that the less volatile look at initial jobless claims—the four-week moving average—had come in at a 52-week high two weeks in a row; a possible recessionary signal though there were plenty of instances of it happening outside of economic downturns.  The tide has completely shifted since that analysis as the four-week average is now at a 52-week low!  At 207K, it is also now at its lowest level since late 1969.  In other words, it can now be more confidently said those highs were more of a blip rather than a trend higher.

The non-seasonally adjusted data deviated a bit from the other versions with an increase from last week’s 183.8K to 195.5K today.  This increase is perfectly normal as a rise in claims for the current week of the year can be observed every year going back to 2011.  Regardless of the increase WoW, this week’s NSA number is just over half of the average for the current week since 2000.  Also being the lowest print for the week of the current cycle, the NSA numbers still appear very strong.

Yesterday’s small gain was still not enough to pare the losses over the past week for the Dow (DIA).  DIA is still the only one in the red in the past week and is underperforming the rest of the major indices by an increasingly wide margin.  While DIA is up just over 12% YTD, every one of its peers is up at least 15%, with the Russell Mid Cap (IWR) now up 19.13% and the Nasdaq (QQQ) up over 20%!

Small caps have begun to pick up the pace.  While still at neutral, the Core S&P Small Cap (IJR) and Micro-Cap (IWC) are up the most in the past week.  IJR is up the most at 1.86%. The rest of the major indices are still overbought with many still on the cusp of extreme levels as they have been for the past few days.
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As noted in an earlier post, the Russell 2000 closed back above its 200-DMA yesterday for the 7th cross of that trendline on a closing basis in the last 50 trading days. As shown in the chart below, the last time we saw this many crosses of the 200-DMA in a 50-trading day span was back in 2014.  Back then, the number of crosses reached as high as nine and the most ever in a 50-trading day span was 12 back in 2012.

So what, if anything, does the indecisiveness on the part of the Russell 2000 mean for future returns?  Is it a sign that eventually the bulls won’t be able to hang on and lower prices are in store, or does it mean that the bears will finally capitulate, and prices will soar?

The chart below shows the Russell 2000 going back to 1978, and in it we have included red dots to show every other time where the Russell 2000 saw seven or more crosses of its 200-DMA in a 50-day span.  As you can see, there doesn’t seem to be any clear trend in either direction.  The mid-2000s are a perfect case in point.  From late 2004 right up through late 2008, we saw multiple occurrences both on the way up and on the way down.  As far as market indicators go, this one hasn’t been all that helpful.  Start a two-week free trial to Bespoke Premium to access Bespoke’s unbeatable research.

If you regularly fill up your car with gas, you have no doubt noticed that prices have been going up lately.  Two weeks ago, we highlighted the fact that gas prices were in the midst of one of their longest streaks without a decline.  Since that post in late March, that streak of days where prices have been flat or higher has continued.  At a length of 57 days, the current streak now ranks as the longest on record (since at least 2004)!

With gas prices moving non-stop to the upside, prices are up much more than average for this time of year.  The chart below compares the move in gas prices this year to a composite of prices in every prior year since 2004.  With a gain of 22.33% already this year, prices are already higher now than they are at the average peak YTD reading since 2004.  Looking at the chart, the pattern of prices so far this year has been similar to the pattern for prior years, but the magnitude of the move has been much stronger.  If this pattern continues to hold, we would expect to see gas prices continue to rise right on through the end of May before leveling off for the summer and heading back lower after Labor Day.

Not only have gas prices increased more than average so far this year, but there haven’t been many other years where they were up as much YTD as they are now.  Going back to 2004, there have only been three prior years where gas prices were up more YTD as of 4/10 than they are now (2005, 2009, and 2011).  The one silver lining is that despite the move higher, the average national price of $2.76 per gallon is still lower than the average ($2.90) and median ($2.80) for this time of year.  Start a two-week free trial to Bespoke Premium to access Bespoke’s unbeatable research.