RBC's Second Most Watched Indicator - the Trend in Weekly Jobless Claims - Achieves a Milestone I Never Expected to See in My Career

Jan 25, 2019 | Nick Scholte


With a print below 200,000, the jobs market most definitively is NOT supporting the case for recession; also, the process of reinvesting proceeds from tax-loss sales in December 2018 has begun

To my clients:

It was a mixed week for North American stock markets with the Canadian TSX rising 0.4%; the U.S. Dow Jones Index rising 0.1%; and the U.S. S&P 500 falling 0.2%.

Another very brief update with the following short observations:

• Markets were much more sedate this week, almost – although not quite - approaching normal volatility… this is a good sign

• Weekly jobless claims (one of the 6 primary recessionary indicators that RBC actively tracks) accomplished what I never thought I’d see in my career – namely dipping below 200,000 claims for a week… claims came in at 199,000… this is another good sign

• the Chinese trade delegation arrives in Washington next Monday for face to face negotiations – hopefully further positive momentum is achieved

• a temporary “deal” appears to have been reached with respect to the U.S. government shutdown – it does not appear to be a final deal as it does not include “ border wall” funding, but at least it pushes the can down the road a few weeks until February 15th

• regarding the government shutdown, I have not commented much on the topic because, frankly, it is rather immaterial to economic momentum unless it persisted for a longer period measured in months… BUT, it may affect the timing of major economic releases (like the monthly Employment Report) over the next several weeks

• in December I executed tax loss selling on behalf of discretionary clients. As I indicated in one of my weekly updates, given then prevalent market volatility, I’d hold cash raised through the sales as “cash” until some semblance of calm returned to the markets. Given the “near” sedateness noted in the first bullet point above, I began the process of reinvesting these funds this week.

That’s it for this week. All the best,


Nick Scholte, CIM, FCSI

Vice-President & Portfolio Manager
RBC Dominion Securities Inc. │ Tel: 604.257.7569 │ Fax: 604.235.9950
3200-1055 West Georgia │ Vancouver, BC │ V6E 3P3
Toll Free: 1.844.665.9900 │ nick.scholte@rbc.com

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