Days from an important batch of economic data in China saw the Shanghai index fall 1.5% to a 2 month low as many expect another rate hike within weeks. The Indian Sensex index fell 2.3% and is near its lowest level since Sept and while the weakness recently is more due to growing concerns with graft investigations, rising inflation and more rate hikes are also a worry. Notwithstanding the weakness in the markets of the two fastest economies in the world, copper is at another record high. Kim Jong Il’s possible short position in South Korean stocks that he tried to profit from by bombing them isn’t working as the Kospi rose to almost a 3 yr high. Australia reported a much better than expected Nov jobs figure and adjusting it for population size to compare to the US, more than 700k jobs were added. As expected, the BoE stood pat and unsurprisingly Fitch downgraded Ireland’s credit rating by 3 notches to BBB+.
Initial Jobless Claims at 421k were 4k below expectations vs 438k last week (revised up by 2k). The 4 week average is now at 428k vs 432k last week, the lowest since Aug ’08 and coincident with this Continuing Claims fell to the lowest since Nov ’08. Extended Benefits fell a net 393k and are now at the lowest since mid July. Because job hiring is happening, part of this decline is definitely due to new job finds but because the pace is still sluggish, part of the decline is also due to the exhaustion of benefits for some up to 99 weeks. With the 13 month extension of unemployment benefits soon to be signed into law, others will be given more time. Bottom line, the pace of firings continue to show a downward trend and hopefully now that the cost of doing business and the level of after tax incomes for at least the next 2 years are more firmly established, the hiring pace will pick up.