Jobless Claims And The S&P 500

Marc Chandler | Jul 24, 2014 01:46PM ET

Weekly initial jobless claims fell 19k in the week ending July 18 to 284k. This represents a new cyclical low. The four-week moving average, used to smooth out this volatile series, also has fallen to new lows.

The prior week report covered the period during which the monthly non-farm payroll survey was taken. Weekly initial jobless claims fell by about 11k from the June survey period. It bodes well for an extension of the 200k+ streak to six consecutive months.

This Great Graphic, composed on Bloomberg, is an old favorite. The white line is the weekly jobless claim inverted to be more intuitive. A rising line reflects improving labor market and falling weekly initial jobless claims. The yellow line is the S&P 500.

This does not mean that the improving labor market is the only force helping lift equity prices. In the past, we have discussed drivers, like stock-buy back programs and M&A activity that reduces the supply of shares. Some argue that the QE has also driven funds into equities. While this seems intuitively true, there is some conflicting data such as lower volumes. In addition, savings have not consistently moved into equity funds.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Written By: Marc Chandler

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Show moreShow Less

Send Feedback

Privacy & Disclaimer

Follow us

© 2007-2024 Fusion Media Limited.
All Rights Reserved