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Stock Market In A Frenzy


If day-to-day stock market indexes keep up this pace of volatility, pretty soon we’re not even going to notice when the Dow evaporates 381 points into the closing bell, like it did yesterday. Futures are again all over the place in today’s pre-market, with the S&P 500 and Nasdaq having closed in the red in 6 of the past 8 sessions. Having fun yet?

Should we be looking for economic indicators for clues on which direction the market will turn today, the only place we’re hearing from today are Initial Jobless Claims. And once again, these numbers are quite excellent: 221K jobless claims were filed last week, well; below expectations and -9K from the already very low 230K the previous week, which was unrevised. You would have to go back more than 40 years — when the economic landscape looked far different than it does today —to find new claims this low.

Continuing claims also came in lower — 1,923K fell 33K from the previous week, which was also off the recent highs in long-term jobless claims. Most impressive of all is the simply stellar 4-week average of 224.5K in new jobless claims; with the U.S. labor market as tight as it is, this pulls the laces even further. We have not seen this level of “full employment” in about two generations.

The thing is, while these are essentially pointing to economic strength in the U.S., it is just this sort of extra-positive data that gave market participants a massive re-think in regard to forthcoming interest rate hikes. From there, it was a short hop to the new environment of big volatility we continue to “enjoy” today. With unemployment shrinking further, wage growth is bound to take hold, which promises to spark a flame to inflation, which will bring us heavier interest rates.

And as the market adjusts to a new, more expensive world — not just in the U.S., but in markets across the globe — investors continually recalibrate their assets, which has helped bring about this volatility. Even the most learned experts can’t tell us exactly how long it will last, but most agree the essential strength in the economy will provide a solid backstop at some stage, hopefully in the near future.

Twitter Posts First-Ever Net Profit

Twitter TWTR shares have rocketed up 25% in today’s pre-market on its Q4 earnings report that posted the company’s first-ever net profit (GAAP). Earnings of 19 cents per share generated a 5-cent positive surprise, while revenues for the quarter of $732 million easily outpaced the $686 million expected. Twitter shares are now trading at their highest levels in nearly 3 years.

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