By Carlos Guillen

After a very robust trading session yesterday, which had the Dow Jones Industrial Average gaining over 180 points after the release of the Federal Open Market Committee (FOMC) minutes that helped to clear the notion that interest rates were increasing sooner rather than later, today stocks are trading lower as news that Chinese exports and imports landed worse than expected. And the fact that initial claims data was better than expected has not been able to provide any lift for markets.

Clearly encouraging today was data that showed the number of people filing for unemployment benefits for the first time continued to decline, reaching the lowest level in close to seven years. According to the Department of Labor, initial claims during the week ended April 5 totaled 300,000, decreasing from the 332,000 revised figure reported for the prior week and landing below the Street's estimate of 325,000. This level of initial claims has not been seen since the week of May 12, 2007, about six months before the recession, when it was 297,000. The result continued to be below the 350,000 level, which economists say is consistent with moderate labor market growth of about 150,000 net new jobs a month, so after rather discouraging employment data recently, the hope for an improving jobs market is coming back to life again. The initial claims' four-week moving average was 316,250, decreasing from the prior week's average of 321,000, so it is becoming apparent that the down trend is still on track and that there has been pent demand for hiring which did not take place as a result of the harsh winter weather. This is a good indication that the economy may grow better than expected. However, from a short-term trader's perspective this may not be so encouraging as the Fed is monitoring progress in the labor market and on the improving economic backdrop in order to continue scaling back its bond-buying program.

Perhaps serving to spook investor today was some unexpectedly weak trade data for March out of China, which reported an 11.3 percent decline in imports and a 6.6 percent decline in exports. The decline in exports was partly attributed to distortions of inflated data in early 2013. The reduced imports level was in part the result of falling commodity prices. As it stands, investors are increasingly concerned that expansion in the world's second-largest economy will deteriorate further. In order to prevent further deterioration of economic growth, the Chinese government is taking steps including railway spending and tax relief while looking to avoid direct monetary policy tools such as bond buying and cuts in banks' reserve requirements. However, many on the Street are speculating that if these measures fail, Chinese economic officials may have no choice but to enact monetary policy.

Be that as it may, investors here at home have decided to move with the herds and are now causing the Dow to give up all the gains that were achieved during yesterday's trading session. Tomorrow we will be getting a glimpse of University of Michigan sentiment data, which is a leading economic indicator and tends to drive markets. Hopefully this will help attenuate the losses posted so far this week.

Historically Good Jobless Claims
By David Urani

Jobless claims is one of my favorite economic indicators, as it seems to be reliable over time and also comes to us in a very timely fashion making it a leading indicator. Today's reading is very encouraging. Weekly claims hit a level of 300k, the lowest since 2007. And beyond that, just take a look at jobless claims' historical data (below); we are approaching levels that haven't been lower since the 1970's. Of course, there were simply fewer people in the 1970's which makes today's reading all the more impressive. It also coincides with last week's Challenger, Gray & Christmas layoff report which showed the fewest amount of corporate layoff announcements for any Q1 in the last 19 years.

Jobless claims also have a surprisingly good correlation with the market. Below I've taken the historical jobless claims data and inversed it to show how lower jobless claims coincide with a higher market (and vice versa). I matched that data with the S&P 500, adjusted logarithmically to show past peaks and troughs better.

As you can see, the peaks and troughs of both the inverse claims and the S&P tend to match relatively well, especially in the last 20 years. And that's because jobless claims really do tend to track pulse of the economy with accuracy over time. Now we just need to see this level of claims hold, as there does tend to be some volatility week-by-week.

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