Stock exchange traded funds (ETFs) showed modest gains on Thursday after the government reported a second consecutive week where initial jobless claims topped 400,000. Also, the Philadelphia Fed Index fell sharply in April.
- A report released by the Federal Reserve Bank of Philadelphia on Thursday showed that the pace of growth slowed by much more than economists had forecast, RTT News reported.
- The number of Americans filing new claims for unemployment benefits fell last week but held above the key 400,000 level, hinting at some loss of momentum in the labor market recovery. Initial claims for state unemployment benefits fell 13,000 to a seasonally adjusted 403,000, the Labor Department said on Thursday, unwinding some of the prior week’s quarter-end jump. Economists polled by Reuters had forecast claims slipping to 392,000. The prior week’s figure was revised up to 416,000 from the previously reported 412,000. The four-week moving average of unemployment claims, a better measure of underlying trends, rose 2,250 to 399,000. “It gives the impression that the momentum of labor market improvement is a bit disappointing at this point,” said Sean Incremona, an economist at 4Cast in New York. The SPDR S&P500 ETF (NYSEArca: SPY) is up slightly in early trading.
- The dollar is falling to a 16-month low against the Euro as investors expect the Federal Reserve to keep interest rates near zero even as many U.S. companies are reporting better-than-expected earnings. Higher rates tend to support a currency’s value because they can generate a bigger return on investments denominated in that currency. The Fed has kept its key rate near zero since December 2008; while most of the world’s other central banks are raising interest rates. The CurrencyShares Euro Trust ETF (NYSEArca: FXE) is trading mixed early Thursday.
- Most Asian markets ended higher Thursday, with the South Korean stock benchmark racing to a record as technology stocks were cheered by Apple Inc.’s results and as commodity producers rose on a rally in crude-oil and gold prices. “Great earnings numbers from both Apple and Intel this week are giving investors’ confidence that the U.S. economy is trending up, and for now it’s offsetting concerns over debt issues in Europe and nuclear worries,” said Hiroichi Nishi, general manager of the equity division at Nikko Cordial Securities. Takuya Yamada, senior portfolio manager at ITC Investment Partners, said Japan’s market would likely be capped by caution and volumes will remain weak ahead of a slew of Japanese corporate results next week. The iShares MSCI Taiwan Index ETF (NYSEArca: EWT) rose 1.5%.
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. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.