US Economy Brightens on President Trump’s Policies

US Economy Brightens on President Trump’s Policies

US Economy Brightens on President Trump’s Policies

$DIA, $SPY, $QQQ, $VXX

Economic outlook in US brightens, Unemployment Rolls at 28.5-year Lows, Trump Administration’s policies driving the economy.

New applications for US jobless benefits fell last week and the number of Americans on unemployment rolls tumbled to a 28.5 year lows, pointing to shrinking labor market slack.

The economy’s brightening prospects were further boosted by other data Thursday showing a sharp acceleration in factory activity in the mid-Atlantic region in May as manufacturers reported a jump in goods shipments and more hours for workers.

In addition, a gauge of future US economic activity rose again in April.

The raft of upbeat economic data supports an interest rate hike next month, though the Fed decision could also hinge on the state of financial markets, which have been consolidating the massive Trump Rally since the November 8th elections.

Initial claims for state unemployment benefits decreased 4,000 to a seasonally adjusted 232,000 for the week ended 13 May, declining for 3 weeks runnning, the Labor Department said, pushing claims close to levels last seen in Y 1973.

Economists had forecast claims rising to 240,000 last week.

Claims have now been below 300,000, a mark associated with a healthy labor market, for 115 straight weeks. That is the longest such stretch since Y 1970, when the labor market was smaller. The labor market is close to full employment, with the unemployment rate at a 10-year low of 4.4%.

The number of people still receiving benefits after an initial week of aid dropped 22,000 to 1.90-M in the week ended 6 May, the lowest mark since November 1988.

Last week’s claims data covered the survey week for May’s NFPs (nonfarm payrolls). Claims fell 11,000 between the April and May survey periods suggesting further employment gains this month. The economy created 211,000 jobs in April.

Labor market strength could allow the Fed to raise rates at its 13-14 June policy meeting. The U.S. central bank increased borrowing costs in March and has signaled 2 more rate hikes for Y 2017 as a possibility.

Financial markets are pricing in a roughly 70% chance of a 25-bpt hike at the Fed’s June meeting, down from 78.5% Tuesday, according to CME Group’s FedWatch program.

The USD was flat against a basket of peer currencies Thursday, while prices for longer-maturity US Treasuries were modestly higher.

Thursday, the major US stock market indexes finished at: DJIA +56.09 at 20663.02, NAS Comp +43.89 at 6055.12, S&P 500 +8.69 at 2365.72

Volume: Trade on the NYSE came in heavy with 1.17-B/shares exchanging hands.

  • NAS Comp +12.5% YTD
  • S&P 500 +5.7% YTD
  • DJIA +4.6% YTD
  • Russell 2000 +0.3% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.00) Neutral (-0.13) Neutral (-0.04) Neutral (0.18)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (-0.07) Neutral (-0.14) Neutral (-0.15) Neutral (0.08)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.20) Neutral (0.18) Neutral (0.17) Bullish (0.25)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Neutral (0.09) Neutral (0.24) Neutral (0.15) Neutral (-0.12)

Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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