Thursday, March 8, 2012

Jobless Claims in U.S. Rose 8,000 Last Week

From Bloomberg: “The number of Americans filing claims for jobless benefits rose to 362,000 last week, a level consistent with an improving labor market.  Applications for unemployment insurance payments increased by 8,000 in the week ended March 3…Economists (had) forecast 352,000 claims ….’The level of claims is still quite low,’ said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. ‘I’m still encouraged by what we’ve seen in the labor market in recent months.”  Full story at:

(Reuters) - McDonald's Corp on Thursday reported global February sales at established restaurants that missed Wall Street's target, primarily on European weakness, and warned that economic uncertainty could hamper profit growth, sending shares down more than 3 percent.  Full story at: http://www.reuters.com/article/2012/03/08/us-mcdonalds-idUSTRE8170YW20120308?type=companyNews

Jobs claims are OK because the increase was so small that most consider it noise in the statistics.  McDonalds is a bit more concern because it shows weakness in Europe.  You may recall that during the US recession, even at its lowest point, McDonalds did well because people ate more at McDonalds rather than Ruth Chris or Le Maison de Expensive.   Since McDonalds is seeing reduced earnings in Europe, it may indicate that the conditions there are worse than is currently thought.  The market expectation is for a “shallow” recession in Europe.

The market shrugged off any such concerns Thursday and the S&P 500 was up 1% to 1366. VIX fell 6% to 18.

NTSM
The NTSM analysis remains HOLD today and indicators are improving each day. 

Even sentiment has dropped from 67% Bulls on Tuesday down to 60% as of yesterday’s close.  (The NTSM sentiment indicator is always a day behind since the data isn’t available until later tonight.) 

MY INVESTED POSITION
I bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct NTSM buy signal.  I remain 100% long in the long-term portfolio (100% stocks in the 401k.). (See the page “How to Use the NTSM System” – the link is on the right side of this page). 

Just a reminder: 100% invested in stocks is way too much for most rational folks.   Don’t do it unless you have a high tolerance for risk.