US continuing jobless claims were above expectations in the week ending 30 January.<\/p>\n
Forecasts were 1.85 million, while the reported figure was 1.862 million.<\/p>\n
The higher-than-expected continuing jobless claims figure of 1.862 million is a clear signal. This number suggests the labor market is softening more than we previously anticipated. We see this as a critical piece of data that will influence Federal Reserve policy decisions.<\/p>\n
This labor market weakness increases the odds that the Fed will consider cutting interest rates sooner than planned. After the series of rate hikes we saw through 2025, the market is now pricing in over a 60% chance of a rate cut by the May meeting. We should look at derivatives that benefit from falling rates, such as buying calls on Treasury bond futures.<\/p>\n
A cooling economy can also put pressure on corporate profits and, by extension, stock market indices. We believe it is prudent to increase downside protection in equity portfolios. Buying put options on the S&P 500 or Nasdaq 100 offers a direct hedge against a potential market correction in the next several weeks.<\/p>\n
This tension between slowing growth and the still-present inflation from last year is a recipe for market uncertainty. We expect volatility to rise from its recent lows, as the VIX has been trading below 16 for the last month. We see value in buying VIX call options to profit from an anticipated pickup in market choppiness.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US continuing jobless claims beat forecasts, rising to 1.862 million versus expectations of 1.85 million for January 30.<\/p>\n","protected":false},"author":62,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41713","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41713"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41713\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17021"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}