Initial Jobless Claims Stay Below 200,000, SP500 Futures Test New Highs

Key Insights

• Initial Jobless Claims increased from 191,000 to 198,000. 
• GDP Growth Rate was 2.6% in Q4 2022. 
• SP500 futures moved above the 4050 level in premarket trading. 

GDP Growth Rate Missed Analyst Expectations

On March 30, U.S. released Initial Jobless Claims report, which indicated that 198,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 196,000. This year, Initial Jobless Claims have mostly remained below the 200,000 level as the job market remained strong.

Traders also had a chance to take a look at the final reading of the GDP Growth Rate report for the fourth quarter. The report showed that GDP increased by 2.6%, compared to analyst consensus of 2.7%.

The FedWatch Tool indicates that there is a 54.4% probability that Fed would not raise rates at the next meeting in May. Traders expect that federal funds rate would decline from 475 – 500 bps to 425 – 450 bps by the end of the year. Fed policy outlook has stabilized in recent days, and the latest economic reports should not change the market’s view.

U.S. Dollar Tests Session Lows

U.S. Dollar Index declined towards the 102.20 level after the release of the economic reports. Traders bet that the Fed would have to cut rates in 2023, which is bearish for the American currency.

SP500 futures climbed above the 4050 level and continue to move higher. The GDP report missed expectations, which could be viewed as a positive catalyst for stocks as it increases chances for rate cuts this year.

Gold pulled back from session highs as Treasury yields moved higher after the release of the reports. The weak U.S. dollar did not provide sufficient support to gold markets in today’s trading session.

For a look at all of today’s economic events, check out our economic calendar.