Weekly results from AAII’s investor sentiment survey was uneventful this week. All of the readings across bullish, bearish, and neutral sentiment saw a move of less than one percentage point. That is the first time this has happened since June 27th of last year and other than those two occurrences, it has only happened 15 other times throughout the survey’s history. Bullish sentiment held firm above 30%, rising 0.35 percentage points to 30.39%.  That was bullish sentiment’s third consecutive week moving higher.

Bearish sentiment remains the predominant sentiment reported by investors as it rose slightly from 41.12% to 42.4% this week. In absolute terms, that is the smallest weekly change for bearish sentiment since a 0.03 percentage point move on March 19th.

Those small gains to bullish and bearish sentiment took from neutral sentiment which fell 0.64 percentage points to 27.2%.  Of the three readings, this was the largest move this week.

With bearish sentiment still outweighing bulls, the bull-bear spread remains negative as it has for a record streak of 26 weeks. Like what you see?  Start a two-week free trial to Bespoke Institutional for full access to all of our research and interactive tools.

Last week, initial jobless claims came in below one million for the first time in 21 weeks.  Even though another sub-million print was expected, claims actually saw a dramatic increase rising to 1.106 million.  The 135K increase week over week was the biggest single-week increase of the pandemic excluding the first two enormous jumps in the second half of March; both of which were increases of over 3 million. Even though that is a big jump from last week, the actual level of claims remains around some of the lowest levels since the pandemic began. In fact, despite the large increase this week, claims are still lower than they were two weeks ago.

On a non-seasonally, adjusted basis claims were 891.5K this week. That actually marks a third straight week with claims below a million as the level of this reading continues to offer a bit more of an optimistic view than the seasonally adjusted number. Although NSA claims remain around the lowest levels of the pandemic, there was not an improvement this week.  The 52.8K increase week over week was the first rise in four weeks and was the third-largest increase since the first week of April.

As we have noted recently, the summer months through September have seasonally been a strong time for claims as the nonseasonally adjusted (NSA) number has tended to drift lower.  The increase this week is out of the ordinary for this point in the year as it was the first time in the history of the data (since 1967) that NSA claims for the current week of the year (33rd week) were higher from the prior week. In other words, the rise in claims this week bucked a historically consistent trend of seasonal strength.

The big drop in claims last week benefitted the most recent reading for continuing claims (lagged an additional week to initial claims) which have continued to decline as they broke below 16 million for the first time since April 10th. The 604K WoW decline was slightly smaller than last week’s 861K decline

For Pandemic Unemployment Assistance (PUA), initial claims were also higher, rising over 50K from last week.  In total, claims (the headline number plus PUA claims) rose to 1.43 million from 1.33 million last week.  Again while that is an increase from last week’s lows, it is still around some of the strongest levels of the pandemic. Total NSA continuing claims for the last week of July (continuing PUA claims are lagged another additional week), on the other hand, fell slightly from 26.6 million to 26.4 million.  That was entirely thanks to a drop in regular claims as PUA claims actually rose from 10.7 million to 11.2 million. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

While the S&P 500 moved to a new all-time high on a closing basis Tuesday, we wanted to check in on breadth with respect to S&P 500 industry groups and how they’re trading relative to their 50 and 200-day moving averages.  While we hear a lot about the largest five stocks in the S&P 500 accounting for the lion’s share of the gains, it’s not as if everything else in the market is falling apart.

Looking first at S&P 500 industry groups versus their 200-day moving averages (DMA), while not extraordinary by any means, more than two-thirds are currently above their 200-DMAs, and the level continues to trend higher.  A more worrying sign would have been if this reading was much higher and showing signs of rolling over.  The seven industry groups that are currently below their 200-DMAs are Banks, Consumer Services, Energy, Insurance, Real Estate, Telecom Services, and Utilities.

On a shorter-term basis, the percentage of industry groups currently above their 50-DMAs is considerably higher at over 95%. In other words, the only industry group not above its 50-DMA is Energy.  What else is new?  Now that the S&P 500 has taken out its February highs, these breadth readings will be key indicators to watch for signs of participation (or lack thereof) in any rally.  Click here to view Bespoke’s premium membership options for our best research available.