Initial jobless claims again surprised on the downside, falling below 1 million for the first time since March 13.   For the week ending August 8 initial jobless claims were 963,000 vs. the consensus estimate of 1.1 million.  Revisions from last week’s data were insignificant.

Additionally, continuing claims again fell and were nominally lower than the consensus view.  Continuing claims are at the lowest since April 3 when continuing claims first surged.

I must write the data is still horrific but it is not as bad as feared.  Moreover, it appears the increased shutdowns are not eliminating the jobs many have feared.

Against this backdrop and early week inflation data, the record 30-year Treasury auction was met with disappointing demand.  Some have also commented the lack of interest in the longer bonds speaks to growing confidence in the Fed’s efforts to increase inflationary pressures.

One can not write there was a “buyers strike,” but some are voicing concern that weaker demand could be very detrimental as the government is demanding more monies for stimulus.

Equities were mixed, partially the result of the highest yields in seven weeks but also from the stalemate in stimulus negotiations.  Some are now asking whether or not a major stimulus is required given the improving job market.

Gold advanced and the dollar declined.

Last night the foreign markets were down.   London was down 1.75%, Paris down 1.77% and Frankfurt down 1.08%.  China was up 1.19%, Japan up 0.17% and Hang Sang down 0.19%.

The Dow should open nominally lower ahead of retail sales data for July.  Coronavirus and stimulus talks are still front and center as the narrative is becoming very intense.  As we all know narrative is defined as “spoken or written account of events; a story that at times is lacking complete factual basis”.

The 10-year is up 4/32 to yield 0.70%.


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