Market Overview - The three major indices are on a four-session winning streak, with expectations for a potential Santa Claus rally starting in the last five trading days of the year [1][2] - There is a historical concern as the last two years did not see a Santa Claus rally, and this year could break that trend [2] Trading Conditions - The S&P 500 is expected to have a trading range of about 30 to 35 points, with current volatility at approximately 13.7% [3] - A more defensive rotation is observed in the market, with interest rate-sensitive stocks, consumer staples, real estate, and financials leading the way [5] Economic Data - Mortgage applications have decreased by 5% week-over-week, with the 30-year mortgage rate hovering around 6.3% [7][12] - Jobless claims came in at 214,000, better than the expected 224,000, indicating a mixed picture in the jobs market with an unemployment rate of 4.6% [8][10] - The four-week moving average for initial claims is around 216,000 jobs, reflecting some normalization after previous outlier reports [11] Inflation and GDP - Recent economic data has exceeded expectations, contributing to equity gains, with GDP numbers coming in 1% above forecasts [13] - CPI inflation is reported at 2.7% on the headline and 2.6% on core, suggesting that inflation may not be a significant concern for the Fed [21] Commodity Market - Gold and silver have reached all-time highs, indicating a shift towards commodity trading amid geopolitical risks and central bank policies [22][23] - The gold-silver ratio suggests that gold is currently outperforming silver, which may indicate positive market sentiment and economic growth [24][25] Future Outlook - There are expectations for potential fiscal policies around housing in 2026, especially in an election year, which could influence market dynamics [17] - The market is currently pricing in two Fed rate cuts, with the first not expected until June, but there is uncertainty about how the market will react if these cuts are backed out [20]

Much has changed in the U.S. economy since President Trump took over from President Biden nearly one year ago, but one thing hasn't: The low level of layoffs. ...

by the CME with the news and the number. >> Yes. Jobless claims uh for the week of December 20th and that's ending December 20th on initial claims.214,000 well below the 225,000 we're expecting 214,000 would be the lowest since well the last week in November when it was 192,000 and that was the lowest going back to 22 at 189 which was the lowest since the 1960s. So we are definitely under 225ish are considered ultra low. And if we look at continuing claims after a couple of weeks of being under 1.9% million ...

Macroeconomic Overview - Jobless claims in the week of November 22nd totaled 216,000, which is better than the expected 225,000, indicating a positive trend in the labor market [2] - The four-week moving average of jobless claims has decreased, suggesting a smoothing of data and a potential stabilization in employment trends [2] Labor Market Insights - The current economic environment is characterized by low hiring and low firing, contributing to a mixed picture of the labor market [3] - Despite some concerns regarding job losses indicated by alternative data sources like ADP, the jobless claims data reflects a continued lack of significant layoffs, suggesting resilience in the labor market [3] - Overall, the labor market presents both positive signs and challenges, indicating a complex economic landscape [3]

Labor Market Insights - Jobless claims reported at 216,000, a decrease from the revised 222,000 the previous week, indicating a stable labor market with low unemployment rates [2] - Continuing claims slightly increased to 1,960,000 from the revised 1,953,000, suggesting that while new claims are low, there is a slight uptick in ongoing unemployment [2] Economic Indicators - Durable goods orders rose by 0.5%, aligning with expectations, while capital goods shipments and non-defense orders showed a significant increase of 0.9%, three times the anticipated growth [3][4] - The strong business spending reflected in the September report indicates resilience in the overall economy, with specific categories of spending yet to be detailed [4] Federal Reserve Dynamics - The market appears unconcerned about the Federal Reserve's independence despite ongoing discussions about presidential influence, as the current Fed leadership remains unchanged [5] - Future nominations for the Fed chair will be critical in determining whether the new appointee will prioritize presidential directives or economic stability, which may reignite debates on Fed independence [6]

Labor Market Analysis - Preliminary estimates indicate a decrease in initial jobless claims by 13,000 to 219,000, the lowest in a month [2] - Continuing claims increased by 11,000 to 1.96 million, the highest since August [3] - Alternative data suggests no surge in job losses despite the government shutdown [4] - Regional Fed surveys indicate a pickup in job growth [4] Inflation Trends - Regional Fed surveys show prices ticking down slightly, but remaining elevated [4] - An index tracking CPI shows an acceleration in prices coinciding with tariffs, but the increases have flattened out [5] Data Reliability and Future Outlook - Alternative data is considered good but not comprehensive and hasn't been fully tested [6] - The government shutdown may delay the release of key economic reports, particularly the October report for November [8] - Exploration of alternative data sources, like the Troy Leka index, is considered valuable even after the government reopens [9][10][11] - The Troy Leka index effectively tracks jobs and inflation and could potentially improve [11] - The federal government layoffs could impact jobs data [13]

Core Insights - The most accurate tool for tracking job losses has been postponed for the second consecutive week, indicating potential delays in labor market data [1] - Despite economic uncertainties, layoffs remain surprisingly low, suggesting resilience in the job market [1] Summary by Categories Job Market Trends - Layoffs are currently at low levels, which is unexpected given the prevailing economic uncertainties [1] Data Reporting - The postponement of the job loss tracking tool for two weeks may affect the timeliness of labor market insights [1]

Labor Market - Initial jobless claims surprisingly low at 218,000, the lowest since the third week of July [1] - The market expected initial jobless claims around 234,000 [1] - Continuing claims also on the light side, at 1.926 million [1] Interest Rate Implications - The unexpectedly low jobless claims are likely to put upward pressure on interest rates [1]

Economic Data Summary - Q2 GDP was revised up from +3.3% to +3.8%, marking the strongest quarter of growth since Q3 2023 [2] - Consumption saw a significant increase from +1.6% to +2.5%, indicating a stronger appetite among U.S. consumers [3] - The Price Index increased by 10 basis points, with headline at +2.1% and core at +2.6% [3] Job Market Insights - Initial Jobless Claims fell to 218K, down 17K from estimates and 14K from the previous week, reaching the lowest level since mid-summer [4] - Continuing Claims rose slightly to 1.926 million, remaining below 1.94 million for the third consecutive week [5] Durable Goods Orders - August Durable Goods Orders increased by +2.9%, significantly better than the prior month's -2.7% and the consensus estimate of -0.5% [6] - Excluding Transportation orders, the increase was +0.4%, down from +1.0% in the previous month [6] Trade and Inventory Data - The Advanced U.S. Trade Balance for August improved to -$85.5 billion from -$102.8 billion [7] - Advanced Retail Inventories remained unchanged at +0.2%, while Advanced Wholesale Inventories decreased to -0.2% [7] Company Performance Expectations - Costco is expected to report fiscal Q4 results with a projected earnings growth of +12.8% year over year and revenue growth of +8.1% [10] - Costco has outperformed earnings expectations in three of its past four quarters [10]

Market Reaction to Fed Rate Cut - Treasury market experienced volatility, with the 10-year yield initially dropping below 4% following the rate cut decision, then rising to 4116% [2] - Market's upward yield adjustment is attributed to strong jobless claims data and a reassessment of the support for further rate cuts [2][3] Fed's Policy and Economic Outlook - The Fed's rate cut is viewed as a risk management measure, prioritizing employment risks over inflation risks [4] - The Fed is perceived to be placing greater emphasis on the employment side of its mandate compared to inflation [4][6] - The Fed is projected to miss its inflation target for seven consecutive years, with inflation exceeding the target by more than 50 basis points (05%) in six of those years [7] Risks and Concerns - The primary risk to the economy is on the employment side, with concerns about companies transitioning from hiring hesitancy to layoffs [5] - There are concerns about the potential for a "cliff effect" if companies begin firing employees, which could spread through the economy [5]