LB LandBridge Company LLC

The market is getting nervous about the economic recovery. Concerns that the first quarter softness may carry into the second quarter and beyond have been weighing on stocks lately. Economists have generally maintained their GDP growth forecasts at this stage. But softish economic readings, such as yesterday's ISM/ADP and today's Jobless Claims reports, increase the odds that we may start seeing those estimates start coming down in the coming days and weeks.

It is with this nervous backdrop that the market is looking forward to tomorrow's non-farm payroll report for April. In addition to some pockets of strength, particularly on the manufacturing side, the most reassuring sign on the recovery front has been the emerging signs of a labor market turnaround over the last few months. We may have to scale down our economic growth outlook if this favorable labor market trend fizzles out.

Today's weak Jobless Claims report only adds to those concerns. We had a huge 43,000 jump in claims during the week to 474,000, with the 4-week average increasing to 431,250. The Jobless Claims report reversed course a couple of weeks back after showing steady improvements over the preceeding months. And today's awful number is along the negative trend of the last few weeks. 

Elsewhere, we got solid April same-store sales reports this morning, helped in no small measure by the delayed Easter holiday. Costco (COST), Macy's (M) and Limited Brands (LTD) came out with better than expected numbers, while Target (TGT) and Gap (GPS) came modestly short.

On the earnings front, we got a solid earnings beat from GM (GM), though the automaker came short of top-line expectations once one-time gains are excluded. DirectTV (DTV) beat on the top- and bottom line, while Sara Lee (SLE) came modestly short of expectations.

The major news of the day is the extremely weak read on the Jobless Claims front. Notwithstanding the retail sales strength, this report will be the key stock market driver today as we wait for tomorrow's jobs report.
 
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