Unemployment Claims Mix Up ETFs | ETF Trends

Exchange traded funds (ETFs) are trying to gain traction on Thursday after the government reported jobless claims rose by 18,000 to 409,000 last week, while the four-week average fell to a 2 ½-year low.

  • More people applied for unemployment benefits last week, one week after applications fell to their lowest level in more than two years. The Labor Department says applications rose 18,000 to a seasonally adjusted 409,000 in the week ending Jan. 1. Applications fell to 391,000 in the previous week, the lowest point since July 2008.
  • Against high expectations for a brighter holiday season, more retailers are reporting shortfalls than upside surprises in December sales so far today. Results from a variety of retailers — discounter Family Dollar Stores Inc. (NYSE: FDO), drugstore chain Walgreen Co. (NYSE: WAG), warehouse clubs Costco Wholesale Corp. (NYSE: COST)  and BJ’s Wholesale Club Inc. (NYSE: BJ) all missed Wall Street expectations. Among retailers that have reported, slightly more than half of them missed analysts’ mark, while more than a third topped estimates, according to Thomson Reuters. SPDR S&P Retail ETF (NYSEArca: XRT) is down nearly 1% so far today in response to the reports.
  • European stocks resumed their new-year rally following strong trading sessions in the United States and Japan, as the car sector and oil giant BP PLC posted gains. “We’ve started the New Year where we left off the previous year — the outlook for equities is still relatively attractive,” said Angus Campbell, head of sales at Capital Spreads. Most Europe ETFs are down this morning, led by Vanguard European ETF (NYSEArca: VGK).
  • Japanese stocks are up this today as generally improved U.S. jobs data inspired optimism and a weaker yen boosted exporters. “The strong jobs data fueled expectations that the (U.S.) nonfarm payrolls data to be released (Friday) may be strong as well,” said Hideyuki Ishiguro, an investment strategy supervisor at Okasan Securities. In Japan, manufacturing and technology exporters were also helped by the U.S. dollar’s surge against the yen Wednesday. The ProShares Ultra MSCI Ultra Japan ETF (NYSEArca: EZJ) is up more than 2% already today.

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.