Thursday, May 16th, 2024

It’s a big morning for economic data. What remains to be seen is whether once it is all digested whether investors will retain the appetite to drive market indices further into all-time highs; the Dow, Nasdaq and S&P 500 all closed at record levels Wednesday. Currently, we’re up +20 points on the Dow, +2 points on the S&P and +8 for the Nasdaq, but these figures are all directly prior to the economic prints being released.

Initial Jobless Claims were good again. A headline total of 222K is a tick above estimates, but down 10K from the slight upward revision to 232K for the previous week. Many analysts were paying attention to this metric — last week’s figure was the first time new jobless claims breached 230K since August of last year. That this has once again come below it is good news for the labor market… for now.

Continuing Claims rose slightly to 1.794 million this morning. This is down from the slightly downwardly adjusted 1.781 million the prior week. (These report a week in arrears from new jobless claims.) Realistically, anything sub-2 million is consistent with a strong domestic workforce; we were last higher than 1.8 million back in late January. For some further perspective, June 2022 brought us a multi-year low of 1.34 million longer-term jobless claims.

Housing Starts for April are a different matter. A headline of 1.36 million is below the 1.40 million anticipated, though up from the previous month’s hefty downward revision, from 1.32 million to 1.29 million this morning. This March print is the lowest starts number we’ve seen since June of 2020 — smack dab in the middle of the pandemic. For Building Permits — a proxy for future Housing Starts — we see a headline of 1.440 million, below expectations and the previous month, and the lowest read in a year.

These housing numbers are bad, and not in a good way. They follow yesterday’s Homebuilder Confidence Index, which fell back below the 50-level to 45 — indicating contraction regarding homebuilder sentiment. Mortgage rates in April crept back up to the mid-7%s; the good news here is that they are back below 7%, though just barely. Numbers are slightly higher for Multifamily home building, but these do not impact the market as much as Single-family homes, which were down on both starts and permits.

Meanwhile, Import Prices spiked up last month. The headline +0.9% was 3x estimates, more than double the +0.4% posted a month ago, and the highest single-month print in more than a year. Ex-fuel, these figures don’t come down much: +0.7%, the loftiest since December of 2022, and well ahead of the +0.1% reported a month ago. Improving economies in the Eurozone and the UK look to have already manifested themselves in these trade numbers.

Exports also rose higher than expected. This headline reached +1.1%, nearly triple the +0.4% estimate and the biggest number on this metric since December of ’22. Month over month, +0.5% more than doubled the +0.2% projected, though 20 basis points below February’s high export level. So what we’re seeing is some inflation creep on imports and exports, though these numbers have a way of fluctuating month over month; this is not the “sticky” inflation the Fed is concerned by.

Walmart WMT shares are up nicely after Q1 earnings came out this morning. Beating estimates on both top and bottom lines — earnings of 60 cents per share on $161.5 billion in sales outpaced the 52 cents per share and $159.5 billion in the Zacks consensus — shares have jumped +6% in early trading. Its International segment outperformed expectations, up more than +10% on +21% in global e-commerce and +24% in global advertising. Net sales growth is expected up +3-4% for the full year. Shares look to open at fresh all-time highs.

Pre-market futures have slipped slightly into negative territory minutes before the opening bell.

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