Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Friday, 11 April 2014

US jobless claims fall to 7 year low

Jobless claims fall

A small landmark moment in the US economy's long recovery as jobless claims fell to their lowest level in 7 years, falling by 32,000 to 300,000.

That's the lowest initial print since May of 2007.

On a rolling 4 weekly basis, which is a less volatile reading, applications fell by 4,750 to 316,250.

Excellent news!

Analysts tend to see these applications as a worthy proxy reading for redundancies. 

This promising data follows on from the payrolls data which showed the US economy adding 192,000 jobs in March following 197,000 in February.

The unemployment rate in the US has fallen steadily in recent years to its present level of 6.7% as the economic recovery continues. 

Share market reaction

As mentioned in many previous posts, after an huge run-up in share market valuations in the US, good news can now be treated as bad news, since it suggests that the Federal Reserve's stimulus will be tapered off.

The result was a sizeable sell-off, particularly for the NASDAQ which has a heavy technology stock weighting and shed some 3.10% overnight (hardly a shock after 5 years of turbo-charged gains!):

Source: Bloomberg

Many tech stocks are of a higher beta (volatility) than their industrial counterparts, and the market appears to be laden with risk at the moment.

Chief economist of BT Financial Chris Caton summed it up rather nicely.

It seems as though we can expect a bumpy (wild?) ride ahead for US share markets as the economy recovers and stimulus is wound back.