Economic activity is picking up and deterioration in the labor market is abating, the Federal Reserve noted yesterday as it kept interest rates at historic lows, but even so markets are off to a rough start Thursday.
One hour before the bell sounds, S&P 500 futures are down 8 points to 1,097. The dollar, maintaining its save-haven status, is rallying.
Meantime, Crude oil is trading 68 cents lower at $71.98 per barrel and Spot Gold is down $17.55 to $1,120.35.
In terms of data markets will be eyeing the weekly jobless claims numbers which, after a pause last week, are expected to resume a steady downfall. A broad gauge of where the economy is heading could also boost sentiment as it is widely expected to report an 8th consecutive month of growth. Finally, it is hoped that the regional manufacturing index from Philadelphia beats the earlier index from New York this week, which saw local conditions fall to a score of just +2.6 in December from +23.5 in the prior month.
In addition to data news, markets will be watching when the Senate Banking Committee hold its confirmation vote on Fed Chairman Ben Bernanke. He’s widely expected to be re-confirmed (and not just because he was named Time’s Person of the Year.)
Key Events Today:
8:30 ― Jobless Claims moderated for five consecutive weeks before the minor uptick reported last Thursday. For the week ending Dec. 12 economists look for the improvement to return with the consensus expecting 465k claims (vs. 474k).
“Our models continue to predict that weekly initial jobless claims should fall to the pre-Lehman level (of below 425.0k) before mid-January 2010, and that weekly initial jobless claims should fall to the pre-Bear Stearns level (of below 365.0k) before mid-June 2010,” wrote John Herrmann from Herrmann Forecasting. ‘Hence, our models predict above-consensus job (non-farm) growth and below-consensus unemployment rate in 2010.”
8:30 ― Leading Economic Indicators, a composite index aiming to track turning points in the economy, will report a slower reduction in the jobs market in November. That will help the composite see its eighth straight monthly gain. Expectations are pretty high, with the Street consensus at +0.7% this month versus +0.3% in October. Some forecasts are as high as +0.9%.
10:00 ― The Philadelphia Fed Survey will give more context to Tuesday’s report from New York. Forecasters expect no change from the prior month, but that’s not a bad thing as the index was well into growth mode at +16.7 last month.
“Although most firms have seen growth in production and new orders, they also note that the level of activity remains quite weak,” noted analysts from Nomura. “For example, the Fed's latest Beige Book said manufacturers in the Philadelphia Fed district reported that ‘activity is still down compared with last year’ and that the improvement to date is a ‘slight uptick’.”
