Outside of the outrageous moves of heavily shorted names, breadth in recent days has actually been on the weak side.  As a result of weakening breadth coupled with people questioning the likelihood of a bubble given the oddity of those shorted stocks’ moves, investors appear to have turned a bit more cautious.  AAII’s reading on bullish sentiment dropped 4.8 percentage points from 42.5% down to 37.7%. That is the first sub-40 reading since the first week of November and is the lowest reading since the last week of October. The week over week decline was also the largest since the 11.49 percentage point decile coming off the recent peak in mid-November.

The losses in bullish sentiment were met with a 3.8 percentage point increase in bearish sentiment.  That brings bearish sentiment to the highest level since the week of October 8th.  Additionally, this was a fourth consecutive week that bearish sentiment has risen; the longest such streak since four weeks of increases during the bear market from the weeks of February 20th through March 12th.

Sentiment has been increasingly less in favor of the bullish camp over the past few weeks, but this week marked the first time since the week of October 15th that bullish sentiment was outweighed by bearish sentiment.

Not all of the losses to bullish sentiment went to bears though.  Neutral sentiment was likewise higher with 24% of respondents reporting as such.  While higher, that is still below where the reading has stood for most of the past year.   Click here to view Bespoke’s premium membership options for our best research available.

For the second week in a row, initial jobless claims showed an improvement. Rather than the decline to 875K that had been penciled in by economists, first-time claims fell to 847K from 914K last week.  Claims have now fallen 80K since the multi-month peak two weeks ago but are still 136K above the pandemic low of 711K from the first week of November.

On a non-seasonally adjusted basis, claims likewise were lower falling by 101.5K to 874K.  Similar to the seasonally adjusted number, while off the peak, that is still well above the pandemic lows from the fall.  Additionally, we would note that like last week (the third week of the year), the current week of the year (fourth) has rarely seen non-seasonally adjusted claims move higher.  In the history of the data going back to 1967, only 9% of years have seen claims rise week over week in the fourth week of the year.

Last week, we noted how the decline in regular state claims was not necessarily shared by claims for Pandemic Unemployment Assistance (PUA).  This week, the two moved more in sync as more than 100K decline in regular state claims was accompanied by a 20.5K decline in PUA claims.  Combined, that makes for 1.3 million new claims this week; an improvement from the prior week but not as strong of a number as the start of the year/final weeks of 2020.

As for continuing claims, there have continued to be improvements as seasonally adjusted claims fell to 4.771 million rather than the 5.088 million reading that was expected.  Last week’s reading was also revised lower from 5.054 million to 4.974 million.  That means that total continuing claims fell below 5 million last week for the first time since March and stayed below 5 million in the most recent week.

Including all other programs to garner a more complete picture of continuing claims adds a couple of weeks of lag to initial jobless claims data meaning the most recent week is for the week of January 8th.  The surge in initial jobless claims for that week showed up as total continuing claims across all programs rose from 16.022 million in the first week of the year to 18.319 million.  That was the first uptick of any kind since the week of November 27th when they rose by 1.6 million, and it was also the largest week over week increase since the week of May 8th when they rose by 3.793 million. The bulk of that uptick came from PUA claims which rose 1.627 million, but PEUC claims and the extended benefits program also saw increases of 836.6K and 96.04K, respectively.  As we have noted in the past few weeks, those upticks were likely the result of catch up from the end of 2020 as expirations of some of these programs were narrowly avoided with the signing of the spending bill.  Click here to view Bespoke’s premium membership options for our best research available.

S&P/Case-Shiller home price figures for November 2020 were released on Tuesday, and below are the details.  Month-over-month, every single city saw home-price gains, with New York and Boston gaining the most.  Chicago and Cleveland saw the smallest MoM gains.  On a year-over-year basis, every city is up at least 7%, with Phoenix, San Diego, and Seattle prices up the most.  Click here to view Bespoke’s premium membership options for our best research available.

Below is an updated look at where home prices stand relative to their mid-2000s housing bubble peaks.  Three cities saw home prices break above their prior highs in November — Tampa, DC, and New York.  There are now only four cities that remain in the red versus their housing-bubble highs — Phoenix, Miami, Chicago, and Las Vegas.

Below are historical home price charts for the various cities and composite indices tracked by S&P/Case-Shiller.  Cities in green are at new all-time highs.  Yes, there’s now a lot of green!