The Day Ahead: Durable Goods, Jobless Claims, $32 billion 7-Year Treasury Notes

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One day after President Obama’s State of the Union Address, the US dollar is up, buzzing near it's highest level since August 2008. Equity futures are also looking up ahead of durable goods data, which is expected to surge on aircraft orders, and jobless claims, which are set to moderate.

Two hours before the opening bell, Dow Futures are up 34 points to 10,229 and S&P 500 Futures are up 4.90 points to 1,099.50. Commodities are also higher: WTI Crude oil is up 43 cents to $74.10 per barrel and Spot Gold is $4.03 higher to $1091.93.

Key Events Today:

8:30 ― Durable Goods Orders are anticipated to leap 1.6% in December, with estimates ranging from a decent +0.5% to a massive 5.5%. The anticipated jump follows a revised 0.7% improvement in November (originally reported at +0.2%, before the Census Bureau released corrections.)

“Durable goods are still in solid recovery mode, but December's surge will reflect volatile aircraft orders more than anything else,” said economists from IHS Global Insight.

“Boeing recorded 59 new orders during the month, up from just 9 in November,” explained analysts from Nomura. “Excluding transportation though, we see more moderate growth of 0.2% month-over-month. Capital goods demand is picking up, which suggests firms are becoming more confident in the sustainability of the recovery.”

8:30 ― Initial Jobless Claims had been moving steadily downwards for several weeks but then jumped 36k last Thursday to 482k. In large respect the surprising figure was related to holiday issues, which may have driven the number lower during the holidays than the actual trend. The Labor Dept. also pointed out that staff was low during the previous weeks and that last week may have included claims filed but not registered previously. 

The consensus is to see 450k claims, which would be a return to normalcy if the holiday numbers were broadly correct. Economists’ estimates range between 430k and 460k.

“The stubbornly high underlying trend in claims should continue pointing to little in the way of net job gains,” said Michael Gregory from BMO. “However, as the FOMC Statement noted yesterday: ‘the deterioration in the labor market is abating.’”

Treasury Auctions:

 

  • 1:00 ― $32 billion 7-Year Notes