Market 09/07: Unemployment claims raise concerns about interest rate policy

Initial unemployment claims drop to 7-month low

According to Labor Department data, initial unemployment claims fell 13,000 to 216,000 for the week ended September 2. This figure was below forecasts of all economists in Bloomberg's survey.

Continuing claims also fell to 1.68 million for the week ended August 26. This is the lowest level since July.

US initial unemployment claims falling to the lowest level since February shows the labor market remains very strong.

Crude oil inventories hit 10-month low

API report shows crude oil and gasoline inventories decline sharply due to OPEC+ production cuts. Saudi Arabia also raised crude oil prices to Asia by 10 cents to 3.60 USD/barrel.

• API crude oil inventories for the week ended September 1: -5.52 million barrels

• API gasoline inventories: -5.09 million barrels - largest decline since March

• Cushing inventories: -1.4 million barrels

Not much different from the API report, the official Energy Department report also shows crude oil, gasoline, and Cushing inventories declined sharply.

Strategic Petroleum Reserve (SPR) rose for the 5th straight week, but remains very small at 798 thousand barrels.

US crude oil inventories continue to decline - to the lowest level since early December - and much lower than the 5-year average at this time.

Including SPR, this is the lowest US crude oil inventory level since 1985.

Housing market remains sluggish

Mortgage Bankers Association purchase index fell 2.1% to 141.9, the lowest since April 1995. July existing home sales released last week also showed weakening to a 13-year low.

Fixed-rate purchase share plunges as mortgage rates hit highest level in over 20 years.

Current figure is 39% lower than pre-pandemic level.

China export pressures ease in August

China's trade pressure eased in August, the worst may be over for some sectors as the country tries to regain growth momentum.

Exports fell 8.8% and imports fell 7.3% year-over-year, both better than expected and less severe than the July slump. Monthly trade surplus was 68 billion USD.

• Other news:

1. Apple shares drop sharply as China seeks to expand iPhone ban

Chinese authorities plan to expand the scope of the iPhone ban to offices and departments in government agencies and state-owned enterprises.

Apple shares fell 2.71% at 06:25 ET pre-market in New York, breaking the 100DMA.

Wednesday's session saw the largest daily drop in a month. European chipmakers, including Apple's supplier STMicroelectronics NV, also saw share prices fall on Thursday's session.

2. Boeing announces cut to 737 production vs. this year's target

A month ago, Boeing said they were starting to ramp up their 737 jet production to 38 planes per month and expect to deliver 400-450 planes this year. The company also said they plan to increase production to 50 planes/month in 2025/2026.

However, on the morning of 09/07, the US aerospace giant announced they will lower 737 production below the set target due to a recently discovered issue from a supplier.