Jobless Claims In Focus

Recently elected President of Brazil Michel Temer has reportedly covered up an illegal payment to Eduardo Cunha, former Speaker of Brazil’s lower house of Congress and convicted felon. The news broke via major Brazil publication O Globo, which said a secret tape has emerged when it was submitted to the country’s Supreme Court as part of a plea deal from executives at an unrelated firm looking to obtain more lenient sentencing.

You may recall Cunha was behind the successful impeachment last year of ousted Brazilian President Dilma Rousseff, who had been accused of accepting graft payments from Brazilian oil major Petrobras (NYSE:PBR) when she was on that company’s board of directors. Cunha was later accused himself of corruption, money laundering and other related charges in connection with the wide-ranging Petrobras investigation. And now President Temer looks to be caught up in the same net, and this has resulted in a 16% drop in the Brazil ETF.

All this is to compare difficulties we’re seeing at the White House this week, in which investors yesterday showed genuine fear that the Trump administration, including its sought-after policies of tax cuts and deregulation, are now in jeopardy of moving forward unhindered, at least for the near- to mid-term. There are so many variables looking forward — regarding the fortunes of President Trump, ex-FBI Director James Comey and others involved with Russia’s alleged involvement in last year’s General Election and domestic policies under the new administration — that it is literally impossible to know what’s happening next. And that is always enough to create Risk-Off tendencies among market participants.

Jobless Claims Stay Historically Low

We remain in a very pleasing range for weekly Initial Jobless Claims, which fell another 4000 this past week to a historically strong 232K from last week’s unrevised 236K. Between 225-250K claims per week is a very positive signal for continuing strength in the U.S. labor market, as is the Continuing Claims figure, which has now dipped below 1.9 million from 1.92 million last week. These numbers are in a falling trajectory as well, another strong indicator of future domestic labor.

Finally, Walmart (NYSE:WMT) posted a 4-cent beat on its bottom line to an even $1.00 per share on quarterly sales of $117.54 billion, which fell a tad shy of the $117.63 billion in the Zacks consensus estimate. Q1 comps rose 1.4% year over year, however, which reflects solid performance amid a challenging Retail space. Walmart’s E-commerce business grew an impressive 63% from a year ago, which has provided much of the biggest of the big-box retailer’s boost. WMT shares are up 2.5% in today’s pre-market.