There's got to be a morning after: Post-Fed data

THERE'S GOT TO BE A MORNING AFTER: POST-FED DATA (1042 EDT/1442 GMT)

A smattering of post-Fed data provided a rinse and repeat of common themes - while the labor market is tight and the housing market might have found its basement, recession worries persist.

The number of U.S. workers filling out first-time applications for unemployment benefits (USJOB=ECI) essentially held firm last week, dropping by a miniscule 1,000 to 191,000 and moving in the opposite direction than analysts expected and the Fed wants.

It marks the ninth week of the last ten that initial claims landed below the 200,000 level widely associated with healthy labor market churn.

The report from the Labor Department sang a song we all know by heart - the jobs market is tight, employers are disinclined to hand out pink slips amid a worker shortage which is driving wages higher and keeping inflation sticky.

It also suggests the recent spate of high-profile layoff announcements - mostly from the tech-plus sectors - have yet to have much of an effect on the unemployment line.

The report covers "both the survey week for payrolls and the first full week following the collapse of Silicon Valley Bank, et al," writes Thomas Simons, economist at Jefferies. "We had anticipated that the banking stress and extreme weather in California would result in one of the higher claims prints that we have seen for the last 6 months, but instead they were steady."

However, ongoing claims (USJOBN=ECI) - which are reported on a one-week lag - increased by 0.8% to 1.694 million, inching closer to pre-pandemic levels and suggesting the hint of a crack, as if it's taking workers a little longer to find new gigs.

Moving on to the housing market, sales of freshly constructed homes (USHNS=ECI) surprised economists by rising 1.1% last month to 640,000 units at a seasonally adjusted annualized rate (SAAR).

But while consensus called for a 3% drop, due to a downward revision to January data, the actual number landed 1.5% to the south of the expected 650,000 units SAAR.

Even so, the unexpected monthly gain is of a piece with other recent housing data, which has shown growing mortgage demand, cooling home price growth, a jump in existing home sales, rising housing starts and improving homebuilder sentiment.

Apparently, the sector isn't quite ready for demolition just yet.

"As buyers approach spring buying season, price adjustments and stabilized mortgage rates have led many buyers to commit before a potential upswing in demand," says Kelly Mangold, principal at RCLCO Real Estate Consulting.

"It will be interesting to see if the cloud of economic uncertainty most recently caused by bank failures will cause buyers to falter, or if it will dissipate as the traditional spring buyers with larger budgets come out in full force," Mangold adds.

Still, it's worth noting that while inventories of new homes on the market inched lower to 8.2 months supply, that number is well above the 5.7 pre-pandemic reading.

Finally, the Commerce Department provided a bit of ancient history regarding the fourth-quarter current account gap (USCURA=ECI), which narrowed by 5.6% to $206.8 billion.

The data reflects all transactions Americans and others, covering trade in goods and services, remittances, and investments.

Recession worry-warts will find fodder in the chart below, which shows sharp contractions in the current account gap frequently accompany economic contractions:

Wall Street is bright green in late morning trading, apparently shaking off Fed Chairman Jerome Powell's insinuation that the central bank isn't done tightening.

Microsoft MSFT, Apple AAPL and Tesla TSLA are doing the heaviest lifting.

(Stephen Culp)

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BOUNCE ATTEMPT (1016 EDT/1416 GMT)

Major U.S. indexes are higher in the early stages of trading on Thursday as they attempt to bounce from 1.6% declines across the three major indexes on Wednesday following the Federal Reserve's 25 basis point rate hike and comments from U.S. Treasury Secretary Janet Yellen about blanket insurance for banking deposits.

Growth RUSSELL:RLG names are leading the charge higher, with communication services S5TELS and tech S5INFT the best performing of the 11 major sectors as U.S. bond yields eased with the Fed being seen as close to a pause on rate hikes.

Banks (.SPXBK) are up about 1% after dropping 3.7% on Wednesday, while the beleaguered regional banks (.KRX) are roughly flat following a tumble of more than 5% in the prior session.

Below is your market snapshot: