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Economic News April 19: How Ugly Will Today’s Jobless Claims Be?

|Includes: Advanced Micro Devices, Inc. (AMD), BAC, FCX, GE, KMB, MCD, MS

International markets were in a good mood earlier today as Spain pulled off a bond auction but the buoyant mood may not translate into gains for the US stock markets as continuing jobless claims are due out before the market opens and could produce a shocker.

Specifically, last week's downbeat jobless claims report was largely ignored - despite the fact it was another sign that the labor market may be stalling after showing signs of life earlier in the year. However, another gloomy report will likely be noticed.

Moreover, a Wall Street Journal blog has quoted Ian Shepherdson, the chief US economist at High Frequency Economics, as predicting that claims will likely rise and he has already correctly predicted last week's rise to 380,000 due to volatile seasonal trends around the Easter holiday. For this week, he expects claims could rise to the mid-390,000 level - again due to seasonal issues and the fact that the week after Easter has a history of volatility.

Should jobless claims rise to 400,000+, it will mean that the pace of layoffs and firings are rising whereas a reading below that point would suggest that hiring is picking up. For the most part, jobless claims have been trending below the 400,000 mark since November but should the reading come in above that point, expect many economic observers to be in for a shock.

Nevertheless, Shepherdson believes the current rise to be seasonal in nature and that the trend will likely revert back to the 350,000 to 360,000 level as he also believes it's not the beginnings of another labor market downturn. Moreover and not to be forgotten, it's an election year and there will be plenty of spin coming from the media and political pundits to spin the figures in whatever direction it suits them.

Likewise, there are plenty of other things going on in the market for the remainder of the week for investors and traders alike to digest - namely earnings reports and stock forecasts from the companies reporting earnings. As mentioned earlier in the week, some of the major stocks reporting earnings today include Advanced Micro Devices (NASDAQ:AMD) with no time supplied, Bank of America (NYSE:BAC) before the market opens, Freeport-McMoRan Copper & Gold (NYSE:FCX) before the market opens and Morgan Stanley (NYSE:MS) before the market opens while on Friday, General Electric (NYSE:GE) will report earnings with no time supplied, Kimberly-Clark (NYSE:KMB) before the market opens and McDonald's (NYSE:MCD) before the market opens.

In other words, keep a close watch on you're my portfolio screen on along with many of the stocks who still have not reported earnings this earnings season. After all, there are bound to be plenty of surprises left for this week and for the remainder of earnings.