Thursday, June 6, 2013

Markets crawl higher on mixed economic signals

Dow rose 12, advancers ahead of decliners 3-2 & NAZ added all of 3.  The MLP index was fractionally higher in the 436s following significant selling in the last month & the REIT index inched up to 280.  Junk bond funds & Treasuries were mixed.  Oil had another rise, although remaining in the mid 90s trading range, while gold was flat.  

AMJ (Alerian MLP Index tracking fund)

stock chart

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLX13.NYM....Crude Oil Nov 13...94.12 Up ...0.62 (0.7%)

GCM13.CMX...Gold Jun 13.......1,398.20 Down ...0.20  (0.0%)

<p> In this May 29, 2013 photo, job seekers wait to speak with Patrice Tosi, of BluePay, second from left, during a career fair in Rolling Meadows, Ill. The number of Americans seeking unemployment benefits fell 11,000 the last week of May 2013 to a seasonally adjusted 346,000, a level consistent with steady job growth. (AP Photo/M. Spencer Green)

Photo:   Yahoo

The number seeking unemployment benefits fell 11K last week to 346K, a level consistent with steady job growth.  The Labor Dept said that applications dropped from 357K the previous week, which was revised up from an initially reported 354K.  The less volatile 4-week average rose 4K to 352K.  Weekly applications are a proxy for layoffs which have fallen 7% in the past 6 months & hit a 5-year low of 338K in early May.  Still, layoffs are only half of an improving jobs picture.  The other is hiring, & companies have been reluctant to rapidly create many more jobs.  More than 4.6M received unemployment benefits in the last week, about 68K more than the previous week.  The number of people receiving benefits briefly topped 11M in 2010, the highest on record.  Job gains accelerated over the winter but have since softened, along with the broader economy.

Jobless Claims in U.S. Fell 11,000 Last Week to 346,000

Draghi's Statement at June Monthly News Conference,

Photo:   Bloomberg

Euro zone govs must continue consolidating their finances even though borrowing costs have tumbled since the ECB bond-buying pledge last summer, ECB President Mario Draghi said today.  "The new European ...framework for fiscal and economic policies should be applied in a steadfast manner," Draghi told a news conference after the ECB left interest rates unchanged.  "In this respect, the Governing Council considers it very important that decisions by the European Council to extend the timeframe for the correction of excessive fiscal deficits should remain reserved for exceptional circumstances."  He warned countries not to be too optimistic about present benign market conditions, adding that if after 2 years of fiscal extensions, a country's deficit was still too high & its competitiveness low, "I don't think the markets will be happy and will punish very soon this country".  The European Commission has given France & Spain more time to bring their public deficits below its ceiling of 3% of economic output.

In the latest sign that Americans are feeling better about the job market & overall economy, stores across the country had a pickup in revenue in May.  According to a preliminary tally of 12 retailers by the International Council of Shopping Centers, revenue at stores open at least a year rose 3.2% in May from last year, up slightly from a 3% gain in Apr.  Only a sliver of the nation's retailers now report monthly figures, but the data offers a snapshot of consumer spending.  We have to wait to hear from the big boys.

Retailers report modest gains for May AP

Following selling in the last week, Dow is resting on inconclusive signals.  Dysfunctional DC is sort of a plus for the markets, but markets are waiting for the big jobs report tomorrow.  The forecast is that 165K jobs were added last month, with some analysts lowering their estimates.  That may be good enough to "get by" but it is not good enough to be a major help to an economy which has had a weak economic recovery over the last 4 years.  Traders are very cautious today on worries about disappointment tomorrow.

Dow Jones Industrials

stock chart

No comments: