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Continuous Jobless Claims in High Risk Territory U.S. Continuous Jobless Claims Rep: 1,906k 🚨Higher than Expected 🚨 Exp: 1,889K Prev: 1,898k (revised down from 1,905k) Continuous claims came at 1,906k which is 8,000 higher than last weeks revised 1,898k. The Trend Since Sept 2022 continuing claims have increased from 1.302m to 1.906m (604k+). This is significantly concerning trend & suggests that an increasing number of people that have become unemployed are remaining unemployed for longer. Short Term Trend ~ Weekly Chart - FEATURED CHART Long Term Chart Trend ~ Monthly Chart - SEE BELOW LINK Recession Watch Both charts above have min, avg and max levels on the bottom right to illustrate the levels we would need to hit for increased recession risk. Right now this chart demonstrates we are at max timeframe and close to max levels for an advance recession warning. PUKA
ECONOMICS:USCJC
by PukaCharts
MACRO MONDAY 11~ Cont. Jobless Claims MACRO MONDAY 11 Continued Jobless Claims ECONOMICS:USCJC Continued Jobless Claims are the continued unemployment benefits claimed by workers who made their first “Initial claim” and remained unemployed in the weeks that followed. In other words, Initial Jobless Claims account for only the people that claimed their first week of unemployment benefit whilst Continued Jobless Claims accounts for people who continued to seek their unemployment benefit into week 2 and subsequent weeks. In order to be classified as a continuing claim, an unemployed individual must be unemployed for at least one week after filing an initial claim. They will be removed from the metric when they return to work. Whilst continuous claims do provide an aggregate of accumulating unemployment numbers over time, initial claims are reported sooner and considered more important to financial markets. Regardless there is a clear historic pattern on the Continued Claims Chart that demonstrates that continued jobless claims increase prior to recessions, and at present we are reaching higher than historical averages that have preceded recessions. The Chart The chart can be summarized as follows: - Recessions are in red - Increases in Continuous Jobless Claims prior to recessions are in blue - It is clear that prior to recessions Continuous Jobless Claims typically increase but for how long and by what amount? - The min/max increase in claims prior to recession is between 218k - 614k - The min/max timeframe of increasing claims prior to recession is 6 – 21 months - The average of the above is a 424k claim increase over a 11 month period. - At present we are now at the avg. 11 months time period and sit at an increase of 380k, however we exceeded 520k in continuous claims increases in Apr 2023. This obviously means since April 2023 continuous claims have reduced however the reduction is marginal against the larger move. - I have set out levels on the chart for us to monitor going forward in line with the min and max claims amounts and timelines as above. We can monitor these levels on trading view going forward just by pressing play and seeing if we are nearing or hitting the indicative levels. - If we reach the average increase amount at >424k AGAIN we are entering into higher risk of recession territory. We are already in month 11 of increases to continuous claims which is the average timeframe prior to a recession commencing. To be exact it is approx. 11.5 months therefore the 2ndhalf of the month of September is where we step into a higher risk level. Currently, the max increase in claims prior to recession is projected to be at a level of 1.928 million (based on historic claims) and the max timeframe is out to Jun 2024 (based on historic timeframes) thus indicating that between Aug 2023 and Jun 2024, subject to ongoing increasing continuous claims (holding above the average level of 1.734 million) it is probable that there will be a recession within this 11 month time window (Not guaranteed). If continuous claims fall below their minimum historic pre-recession level of 1.51 million I believe this might invalidate the possibility of a recession or at least have a significant lagging effect on time horizon. At present this outcome seems unlikely but anything is possible and we can monitor this on an ongoing basis. We now have a number of charts demonstrating that from Sept 2023 to Mar/Apr 2024 we have a significantly increased probability of recession. These charts were shared just a few days ago if want to have a look. These charts are as follows: 1. The current yield curve inversion on the 2/10 year Treasury Spread provided advance warning of recession/capitulation prior to all of the recessions outlined on the below chart however it provided us with a wide 6 - 22 month window of time from the time the yield curve made its first definitive turn back up to the 0% level. Sept 2023 is the 6th month of that 6 – 22 month window. The 22nd month is Jan 2025. The average time before a recession after the yield curve starts to turn up is 13 months or April 2024. - Based on this chart it is clear that there is substantially increased recession risk between Sept 2023 – April 2024. 2. Interest Rate Hike & S&P500 chart (Macro Monday 8). In the event that the Federal Reserve is pausing rates from Sept 2023, historic timelines of major hike cycles suggest a 7 month pause like in 2000 or a 16 month pause in line with 2007 (an avg. of both is c.11 months). For reference COVID-19’s rate pause was for 6 months. - 6 months from now would be March 2024 and 16 months from now would be Nov 2024. The average of both Jun 2024. - Based on this chart it is clear again that there is substantially increased recession risk between Sept 2023 – March 2024 of recession, increasing again thereafter from May onwards. 3. Initial Jobless Claims are currently increasing and are reaching pre-recessionary levels. If initial jobless claims surpasses its historic pre-recession averages of 252,000 of increased claims and if claims continue to increase past Nov 2023, this suggests we are entering into a much higher risk of recession. - Whilst this chart is not indicating the Sept 2023 to Mar/Apr 2024 time window as the two charts above are, it may present a date within that window of time from Nov 2023 forward (subject to continued increases). 4. Today’s chart Continuing Jobless Claims suggests that we have broken past both the increase in claims average of 424k (to 1.734 mln) and we are into month 11 which is the average timeframe of increases prior to recession commencement. - Todays chart is suggesting we are already in a recession or have just started into one. Another breach back above the 1.734 mln level (average level) would be a good confirmation signal that the risk of recession remains on the table. With this in mind it is important to recognize that on average official declaration of recession can be declared up to 8 months after a recession has started, so we should be on the look out for indications of a recession starting (without the official declaration). Today’s chart and the above charts suggest the following: 1. Significantly increased risk of recession from the 2nd half of September 2023: - 2/10 year Treasury Spread 6 – 22 month recession risk window opens from Sept 2023. - Average timeframe of increases in continuous jobless claims prior to recession is from the 2nd week in September. - The last time the Federal Reserve paused interest rates, the COVID-19 crash occurred 6 months later. 6 months from a Sept 2023 pause would be March 2024. 2. The Recession Risk increase higher from Nov 2023 - Average timeframe of increases in Initial Jobless Claims prior to recession is hit. Adding to the above concerns is that M2 Money supply is still reducing (Macro Monday 8) and Global Net Liquidity is continuing to reduce (Macro Monday 4) as the S&P 500 is hitting a major resistance zone when accounting for M2 money supply (Macro Monday 8). At present it is clear that liquidity is reducing both globally and in the US. Currently fiscal stimulus appears to be filling the gaps and may be causing additional lagging effects to the changes we have seen imposed by Federal Reserve (balance sheet reduction and increased interest rates). Keep in mind that the Fed is also targeting higher unemployment to help quell the effects of inflation thus adding to the relevance of the Initial Jobless Claims and continuous jobless claims numbers. We can monitor these charts on my trading view just by pressing play and seeing where things are going. Regardless ill be providing updates along the way of claims releases and other important data. Be safe out there as we enter into a high risk zone (no guarantees) PUKA
ECONOMICS:USCJC
by PukaCharts
2
using CPI & CLAIMS data as TRADE CONFLUENCE!Really tricky market to make sense of right now because of how last weeks data (stronger job market - confirmed by NFP) was disregarded. This could mean: 1. Either they were beginning to lay a trap (current moves will reverse) 2. The market genuinely doesn't care because it expects claims to eventually pick up with a vengeance Here's what I think: CPI has been cooling due to lower Oil price and higher interest rates (housing is a big component of CPI). Lower CPI shouldn't be a shock to anyone and is likely already priced in. For this reason, I think what matters most right now is what the Fed is focused on: SERVICES (wage) inflation and this is why I believe the main focus tomorrow is likely to be the services component of CPI and the CLAIMS data. I think tomorrow's news is already priced in and we're likely to see a reversal in XAU.
OANDA:XAUUSDShort
by XAUSpeculator
2
ridethepig | GBP Market Commentary 2020.07.02📌 The affinity between 'resistance' and 'overextension' Light and summery flows continue with GBP in purely technical moves. Very little to update on the fundamental here; a weak macro and political picture persists as activity remains incredibly low in the absence of confidence. There’s a lot of support stacked on the 0.90 🔑 pivot in EURGBP and 1.252x in GBPUSD. Reassessment only required with a weekly closing below/above. => Restraint in the technical sense can be conceived with the presence of resistance; but real total defence which reigns over the whole G10 board and which gives FX markets breathing difficulties, is only possible when risk is in the air. Parking in USD will remain attractive as long as the VIX remains elevated. => From a risk perspective, to what extent, we may now ask, does one need to give their stop breathing room? It is not enough to state the highs will hold as NFP can easily capture the stops and will be highly unpleasant to defend. This means we need to give some room up towards 1.258x as we will have the 1.25 quarters and halves to protect. ⚡️ US DATA PREVIEW: Primary Dealer Nonfarm Payroll estimates - RBC 8.0mn - Natwest 7.2mn - Citi 5.5mn - Morgan Stanley 5.285mn - BNP Paribas 4.5mn - Goldman Sachs 4.25mn - HSBC 4.0mn - Scotiabank 4.0mn - TD 4.0mn - SocGen 3.9mn - BMO 3.5mn - Wells Fargo 3.3mn - Credit Suisse 3.0mn - JPMorgan 3.0mn - BAML 2.8mn - Daiwa 2.5mn - Deutsche 2.5mn - Mizuho 2.5mn - Barclays 2.0mn - Jefferies 1.95mn - Nomura 1.5mn - UBS 1.5mn - Dealer Median: 3.4mn With this in mind, 3m is the headline to track.... undershoots will be positive for USD via risk whereas inline or overshoots will trigger profit taking from the recent squeeze. The ST flows in a technical sense are no less imaginative than the MT and LT swing we traded earlier in the year. As usual thanks for keeping the feedback coming 👍 or 👎
Short
by ridethepig
16
ridethepig | NZD Market Commentary 2020.07.02📍 NZDUSD : NFP Positional Play This is an example of an erroneous defence. In similar style to that of the GBPUSD position, the highs 0.652x can be defended, since it unlocks an impulsive position which is somewhat cramped via RBNZ adding more free money to the pot. Buyers attempt at breaching the highs should be opposed, we have risk in play via Covid and Brexit, not to mention bankruptcies around the globe skyrocketing. Dark clouds on the horizon despite how the politicians attempt to sell re-openings as 'independence'. NZD and High beta FX will struggle to rally as long as the market is still concerned about further lockdowns in Australia as NZ will follow their lead. Tracking the same “lines in the sand” with 0.677x AUDUSD and 0.637x NZDUSD. ⚡️ US DATA PREVIEW: Primary Dealer Nonfarm Payroll estimates - RBC 8.0mn - Natwest 7.2mn - Citi 5.5mn - Morgan Stanley 5.285mn - BNP Paribas 4.5mn - Goldman Sachs 4.25mn - HSBC 4.0mn - Scotiabank 4.0mn - TD 4.0mn - SocGen 3.9mn - BMO 3.5mn - Wells Fargo 3.3mn - Credit Suisse 3.0mn - JPMorgan 3.0mn - BAML 2.8mn - Daiwa 2.5mn - Deutsche 2.5mn - Mizuho 2.5mn - Barclays 2.0mn - Jefferies 1.95mn - Nomura 1.5mn - UBS 1.5mn - Dealer Median: 3.4mn => So if we can sum up by saying, RBNZ is preventing NZD of moving higher and is of greatest important when considering a macro positional flow. On the other hand, USD seems more appropriate as a place to park until the storm passes. What we are talking about is outguessing extreme risk for the long weekend with the NFP knee-jerk flow. A very advanced and extremely bold call. As usual thanks for keeping the feedback coming 👍 or 👎
Short
by ridethepig
9
ridethepig | Flatten the CurveA paradigm shift followed the "It's time" chart more rigidly than even I expected. Apologetically we can give the official ✅ for those following the example of dogmatism from @ridethepig and can see clearly how far we have come: "It's Time" 📌 It can be said that the opening knee-jerk reaction from "The Great Lockdown" is over and we can begin to enjoy a return back to the old 'normality' (whatever that means). The unemployment rate has likely peaked here in this cycle, it is curious how this happens so often, the cycle nature of time and human behaviour allows us the ability to prove all kinds of flows and forecasts; but with certain classical variations, as in the present case. So, given the huge development in claims, it is reasonable to challenge the highs of what is undeniably a historic crash. What can one learn from the flows, to fully understand this question we will need to begin digging a lot deeper. Thanks as usual for keeping your support coming with likes, comments, charts, questions and etc!
FRED:CCSAShort
by ridethepig