No Recession???

Initial claims for unemployment insurance remained pinned to 40-year-plus lows in the latest week, and continue to suggest that the labor market is tightening. Claims do provide a recession signal when they rise between 75,000 and 100,000 over a six-month period. Six months ago, claims were running in the 260,000 to 270,000 per week level. Over the last four weeks, claims have averaged 244,000 per week, so claims are running roughly 20,000 below six-month-ago levels and are not signaling a recession. (LPL Research)

After a slow start to fourth quarter earnings season, a solid 69% of S&P 500 companies have bested estimates, pushing the year-over-year earnings growth rate for the S&P 500 to 8.3%–nicely above the 6.1% consensus growth rate. Energy is poised to break earnings growth drought. It’s been two years since the energy sector produced a year-over-year gain in quarterly earnings but is now tracking to +1%. (LPL Research)

Sears shares hit its lowest level since its merger with Kmart back in 2005, under $6/share on Thursday. There was no specific news to explain why shares fell. Today Sears is up over 20%, after announcing plans to cut debt and pension obligations by $1.5 billion this year. Sears was once one of America’s leading retailers and an icon. (CNN)

S&P 500 is up 3 and the NASDAQ is up 8. MSCI International Index is higher.

Oil is up 82 cents at $53.78 a barrel.

Gold is down $10 at $1228 a Troy ounce.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

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Financial Focus • February 10, 2017


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