Initial claims for unemployment benefits fell by 17,000 to 421,000, according to the U.S. Labor Department. That’s less than the 425,00 forecasted by economists surveyed by Reuters. The four-week moving average fell by 4,000 to 427,500, near a two-year low, the Labor Department said.
In the previous week, claims were revised up to 438,000 from 436,000.
Markets have wobbled over the past several days, while investors have ditched bonds amid concerns over whether a recent tax deal in Washington would threaten financial stability, and if inflation is on the horizon.
Treasurys were hit by their worst two-day sell-off since the collapse of Lehman Brothers this week, sending yields sharply higher, in the wake of an agreement between President Obama and Republicans to extend the Bush-era tax cuts for a further two years.
The rising yields were a signal of stronger economic times ahead. PIMCO Bond Fund (PTTRX) had it’s largest % loss in over 2 years which suggests investors are seeking riskier trades as the economy becomes a little more stable. It’s not a negative story, it’s a positive story. Rates are going higher for a number of reasons, but I don’t think you can discount the importance of increasing demand, increasing strength in the U.S. economy.
Bond yields eased off their highs in early trading Thursday, with the benchmark 10-year note yield slipping to 3.25 percent and the 30-year long bond at 4.45 percent.
NOTE: AT PRESENT, US MARKETS ARE TRADING IN POSITIVE ZONE. EUROPE MARKETS CLOSED POSITIVE. WILL THIS BREAK OUR MARKET FROM FREE FALL?? A BIG QUESTION. I AM EXPECTING A SMALL BREAK FOR TOMORROW.
