Monday, December 5, 2016

Investors Off-Sides: Gearing Up For A Hike In The Face Of Economy Slowing Fast

*In two Wednesday's we have a rate hike but jobless claims slowed to their weakest level in almost half a year.

*With investors gearing up for Trump growth and rate hikes, everybody could be offsides.

Last week saw slowing economic reports out of jobless claims and wages. That is bad news in concert with a Federal Funds rate increase and everybody positioned for an economic Trump stimulus. A slowdown now would likely hit markets.



Jobless Claims Show Weakness

Jobless claims that report weekly showed their weakest economic level since June.


Source: Trading Economics. Lines: Elazar


There are a few things going on here.
1) One you see that the jobless claims last week hit their highest level in almost half a year.
2) We haven't had a jump like this in such a short time since early 2015.
3) It's not a disaster yet because at least we didn't break the downtrend.
The next couple of weeks though take on increasing importance. If jobless claims slow further and tests that downtrend, look out.
The Fed is set on raising rates two Wednesday's from now. Their reasoning is that non-farm payrolls are strong enough.

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