The market gets to chew on multiple reports today, after responding positively to the news out of Europe yesterday.
This morning we got reports on PPI, International Trade, and Initial Jobless Claims. While the PPI and International Trade numbers were good, the Initial Jobless Claims report was disappointing.
The positive trend of the last few weeks reversed, with weekly Jobless Claims moving in the wrong direction, increasing by 35,000 to 445,000. Before getting too disappointed with today’s number, don’t lose sight of seasonality factors that can wreak havoc with the numbers around this time of the year.
The Jobless Claims data had emerged lately as the most positive labor-market metric. The number had been steadily coming down over the last few months — we even had our first under-400K weekly number a couple of weeks back.
But we haven’t seen the improving Jobless Claims data show up in the monthly nonfarm payroll numbers yet. We need the weekly Jobless Claims number to move towards the under-400K level. To that end, today’s report was disappointing.
On the earnings front, we have Intel (INTC) reporting results after the market close. This chip giant was a torch bearer of the PC revolution, but its role may not be as central to technology’s evolution going forward. After all, Intel missed the smart-phone surge and appears set to repeat that with the hot tablet device. This critique aside, today’s number should be impressive, driven by continued top-line and margin gains.
But don’t try to read the decipher the Tech space’s fortunes from Intel’s numbers. Tomorrow morning’s JP Morgan (JPM) report would be far more telling about the fortunes of the all-important Finance sector.
Sheraz Mian
P.S. What is Zacks Ahead of Wall Street? To find out more about Zacks Ahead of Wall Street, click here.
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