Stock Market Update

The stock market remains poised for a lower opening following a busy slate of economic data.

Initial jobless claims for the week ending May 16 decreased by 3,000 to 209,000 (Briefing.com consensus: 210,000), while continuing jobless claims for the week ending May 9 were unchanged from the prior week at 1.782 million.

The key takeaway from the report is that there is nothing to see here, meaning there is nothing in these latest numbers that would suggest there has been a sea change in a labor market environment that remains characterized by low firing and low hiring activity.

Housing starts decreased 2.8% month-over-month in April to a seasonally adjusted annual rate of 1.465 million units (Briefing.com consensus: 1.420 million). Building permits rose 5.8% month-over-month to a seasonally adjusted annual rate of 1.442 million (Briefing.com consensus: 1.380 million).

The key takeaway from the report is that there was broad-based weakness across all regions for both single-family starts and single-family building permits, underscoring the headwind posed for builders by rising costs for financing, materials, and labor.

The Philadelphia Fed Index fell from 26.7 in April to -0.4 in May (Briefing.com consensus: 15.5). The dividing line between expansion and contraction for this survey is 0.0, so the May result reflects a slight contraction in activity versus April.

The key takeaway from the report, though, is that the diffusion index for future general activity climbed 12 points to 53.2, which is the highest reading since June 2021 and a sign that manufacturers are expeting better activity to follow in the next six months.