Market Talk

Seems as if corporations feel more cautious than the investors who have bid up their stocks lately, with companies content to conservatively bide their time sitting on loads of cash.

“Healthy profits, combined with opportunistic borrowing at very favorable market interest rates, are providing corporations with an ample cushion against the next business downturn,” Credit Suisse says, noting “the ratio of liquid assets to total assets on nonfinancial corporate balance sheets is hovering near a 45-year high.”

Big cash buffers are a manifestation of “the severe money demand shock American firms experienced in recent years,” the firm suggests. While that’s not good for long-term growth, it remains hard to get businesses “to risk even more of their precautionary holdings” on expansion, which could lift job growth.

The continuing decline in weekly jobless claims suggests employers have trimmed their workforces about as much as they can, but as Credit Suisse infers, they remain reluctant to expand or hire. Demand remains uneven, at best, and there’s clearly enough uncertainty related to the geopolitical picture and global growth to hold off on hiring, at least here in the US. Continue reading…

Too bad these Census jobs aren't permanent.

As investors eagerly await tomorrow’s March jobs data, today’s initial jobless claims provided the latest hint toward what the report might bring.

Unfortunately, today’s data didn’t tell us anything we didn’t already know.

Folks filing new claims for jobless benefits fell 6,000 to 439,000 in the week ended March 27, a smidgen better than expected as economists anticipated claims would decline by 2,000. The previous week’s level was revised upward to 445,000 from 442,000.

On the bright side, the four-week moving average fell to the lowest level since Sept. 13, 2008, just prior to Lehman’s collapse and height of the credit crisis.

But temper your enthusiasm for the ongoing decline in initial jobless claims, because emergency unemployment claims spiked up again. The gauge has been volatile week-to-week this year, and is back near the cycle high after a decline in last week’s report.

Continue reading…