Thursday, December 17, 2009

Unemployment claims update



The 4-week moving average of weekly claims for unemployment continues to move lower.

I contrast this to the headline I see on Bloomberg this morning: "The dollar rose to the highest level in three months against the euro while stocks and commodities slid as investors shunned risky assets on concern the global economic rebound will stall. Treasuries rallied." I don't see any sign of a global economic stall. Instead, I see markets that are still shell-shocked, still trading at levels that imply a great deal of concern for the future. Why else would someone believe that a stronger dollar—which is only a few percentage points above its all-time lows—is a reason to not buy U.S. assets with otherwise-attractive yields?

6 comments:

Bill said...

Scott,

I've always wondered how business news outlets determine why "the market" is doing anything on a given day. Obviously some headlines tell us why sometimes, but isn't it really just a guess most of the time, especially when the news today really isn't that bad at all.

Public Library said...

Headlines are meant to sensationalize and draw traffic to their content, plain and simple.

Maybe you should come up with better headlines :)

"Unemployment Claims Plummet to New Lows"

AusGarry said...

Hi Scott
Not really on this topic but I linked to the Jude Wanniski you posted and have been enjoying his musing on the poilitical economy.

One relevant item 2005 lecture "There is no Housing Bubble" which concludes with "The good news is that there is no bubble in the housing market, and there will not be one that threatens to burst, as long as the Fed nails down the dollar and prevents a new inflation."
Well I don't think there was a new incflation and there was a housing bubble - does d such a miss shake your faith?

AusGarry said...
This comment has been removed by the author.
Family Man said...

News headlines must go hand in hand with watchers sentiment, otherwise they would find another source oh their mood confirmation.This is some kind of a viscious circle. As Coppock observed market downswings are a kind of a bereavements and requirie ca 14 months of mourning.

Scott Grannis said...

AusGarry: I would note that the Fed did not keep the dollar from sliding further, and inflation did indeed heat up following 2005.