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Equities Rally to Records Despite More Jobless Claims

US equity markets traded at or near record levels this week while bond yields declined slightly on lackluster economic data and the release of the minutes from the Federal Reserve's Open Market Committee July meeting. The meeting minutes did not contain any surprises, although there did appear to be a shift away from the idea of using forward rate guidance to emphasize their commitment to low interest rates. The week's economic data was led by a weak initial jobless claims report, as over 1mm Americans filed initial claims for unemployment insurance.

Despite this increase in new claims, the number of Americans continuing to receive benefits declined by over 600,000, to 14.8 million. The US housing sector (which is defying the broader slowdown) continued to demonstrate strength this week, as housing starts, building permit issuance, and existing home sales all beat estimates. The boost provided by low mortgage rates is fueling the sector and shows no signs of slowing.

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