This data-rich day began with the Philadelphia Fed reporting that its Business Conditions Index fell more than expected to minus 43.1 from minus 56.6. An improvement over April, but worse than the anticipated improvement to minus 40. The news didn’t improve much with the BLS announcement of 2.44M new Jobless Claims for the week ending May 16th. The prior week’s total of over 2.9M was revised to 2.68M. Not surprisingly, Continuing Claims continue to grow with the total for the week ending May 9th rising to over 25M. The prior week’s tally of 22.8M was revised to 22.5M. A slight improvement in the manufacturing outlook was reported by Markit Services as its Manufacturing PMI rose to 39.8 from 36.1; about what analysts expected, but an improvement nonetheless. For Services PMI, that measure beat estimates of 32.5 by coming in at 36.9, way up from April’s 26.7. For its Composite Index, more improvement was reported with an advance to 36.4 from April’s 27. Better news all around.
Not so for housing. Existing Home Sales in April plunged by 17.8%, although Median Home Prices rose by 7.4% year-over-year to almost $287M. The nosedive in sales was the largest drop since 2010. Also out this morning was the 4.4% decline in April’s Index of Leading Economic Indicators. In March, the 6.7% drop was the largest ever single-month fall.
Today’s rally in Treasuries has pushed the Ten-Year’s yield down to around 67 basis points. WTI is up almost a dollar to around $34.44 while gold has slipped around $15 to $1,733/oz.