Thursday, July 18th, 2024
Another Thursday morning, another Weekly Jobless Claims report. On an Initial Claims basis, we jump back up to where we were two weeks ago, to +243K new claims — a near-term high going back to August of last year. The previous week was upwardly revised slightly to +223K, which is where we had been much of this past spring. For sure, the sub-200K new jobless claims of late 2023 are clearly a thing of the past.
Continuing Claims is arguably the more important data set. Here the news is even more definitive: +1.867 million longer-term jobless claims is the highest single-week figure we’ve seen since November of 2021, when jobless claims were going in the opposite direction. This is a big jump from the 1.847 million reported last week, and the sixth-straight above the 1.8 million level. To be clear, anything beneath 2 million longer-term jobless claims is consistent with a healthy labor market, but it appears we’ll be back there before too long at this rate.
Philly Fed manufacturing is also out this morning. This metric has managed to improve over the course of this year, reaching 13.9 in July — the highest since 15.5 reported in April, and the sixth-straight month of positive manufacturing growth for the sixth-largest city in the U.S. Before this, we saw roughly a year and a half of negative Philly Fed headlines, so it’s nice to see this rebound continue. It’s also better than the slightly down Empire State manufacturing index reported early this week.
We also see more earnings reports out this morning. Abbott Labs ABT posted modest beats on both top and bottom lines ahead of today’s open, with earnings of $1.14 per share outpacing the Zacks consensus by 4 cents and revenues of $10.38 billion ahead of the $10.35 billion expected. Its Medical Devices segment was a highlight, growing +10.2% year over year. It also marks the 13th straight earnings beat, with a slight upward revision to full-year earnings guidance. Shares are flat ahead of the bell.
D.R. Horton DHI reports fiscal Q3 numbers prior to today’s regular session. Its earnings of $4.10 per share on $9.97 billion in quarterly sales were nice pops above expectations, by +7.9% and +2.9%, respectively. The company is rewarded by its wide range of new-home offerings, from entry-level to luxury, and shares are up +3.8% on the news this morning. Further, DHI is up nearly +20% from its July lows. For more on DHI’s earnings, click here.
After today’s close, expect more from Q2 earnings season. Chief among these will be Netflix NFLX, formerly known as the “N” in the “FANG” stocks during the halcyon days of the Great Reopening. It’s expected to fetch +42.9% earnings per share growth for the quarter and +16.4% increased revenues. Off its 2022 lows, Netflix has only posted an earnings miss twice, with a trailing four-quarter average beat of +9%.
That market rotation we saw yesterday may be short-lived. Indices have slid further toward prior trends of better performance in tech-related industries at the expense of cyclicals. Currently, the Nasdaq is +159 points and the S&P 500 is +17, while the Dow — which has posted back-to-back all-time closing highs the past two sessions — is sliding -102 points at this hour. During regular trading, we’ll see Leading Economic Indicators for June and hear from various Fed participants ahead of next week’s blackout period.
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