Morning all.
My favourite day of the week is here already, where I get to watch the markets celebrate the deteriorating state of the US job market with the euphoria it brings of more FED and Treasury Department interventions.
When last weeks numbers came in above forecast and continuing claims rose instead of falling, I genuinely thought markets might take not and consider that the strength of the US consumer was under real threat. Something that is of vital importance when 70% of GDP is driven by the consumers willingness to spend and pile-up more debt. It was not to be though and markets continued to race higher.
Yet again this week, expectations are for a new claims figure of 1.38 million. This is at a time when the US economy is basically open for business and hundreds of billions in PPP money have soaked the system with the specific intention of getting employers to put their staff back on the payrolls if they had been previously let-go or put on furlough.
Continuing claims are forecast to fall by a modest 576k to 19.968 million and given the backdrop I’ve seen little criticism of why this figure is not falling by 2-3 million each week now that the US moved into an aggressive re-opening phase in the last few weeks.
With the number of new COVID cases in the US starting to rise again at the moment, we are starting to see some states being forced to reinstate lockdown measures and while the effects of that will not show in today’s data it could certainly alter the path of the job market if the situation gets any worse.
Data is expected at 12:30 GMT and I’ll post some comments on eToro after it’s released.
Thanks for your time.
