Dow fell 9, advancers over decliners almost 3-2 & NAZ lost 16. The MLP index rebounded 7+ to the 502s & the REIT index was off pennies in the 318s. Junk bond funds were mixed & Treasuries gained. Oil & gold had technical buying after long declines this year.
AMJ (Alerian MLP Index tracking fund)
Unemployment in the US dropped in Oct to the lowest level in 6 years & employers added more than 200K workers to payrolls for a 9th consecutive month as the economy powered past a global slowdown. The 214K increase in employment followed a 256K advance the prior month that was more than initially estimated, according to the Labor Dept. The jobless rate fell to 5.8%, even as more people entered the labor force, boosting the share of the population working to the highest in 5 years. The report probably keeps Federal Reserve policy makers on track to raise interest rates in 2015 even as wages continued to show little momentum. The increase in Oct employment was broad-based, with factories, construction companies & retailers among those adding employees. Payrolls at restaurants jumped 41K & hourly earnings for all workers rose less than projected. The forecast called for a 235K advance in Oct payrolls. The unemployment rate fell to the lowest since Jul 2008 & is projected to hold at 5.9%. The share of the population with jobs rose to 59.2% in Oct, the highest since Jul 2009, from 59% the prior month. Average hourly earnings for all workers rose 0.1% from the prior month. They were up 2% over the past 12 months. The average work week for all employees increased 6 minutes to 34.6 hours. Private payrolls, which don’t include gov, increased 209K in Oct after a 244K advance. Factories added 15K workers after a 9K gain in Sep. Construction companies took on 12K workers. Employment at private service providers rose 181K, including a 52K gain in the leisure & hospitality industry that reflected more hiring at eating establishments. The underemployment rate, which includes part-time workers who’d prefer a full-time position & people who want to work but have given up looking, declined to 11.5%, the lowest since Sep 2008, from 11.8%.
U.S. Payrolls Rise as Jobless Rate Drops to Six-Year Low
China's trust assets grew the least since 2010 in Q3 as regulators tried to limit shadow banking risks & investors grew more wary of defaults. Trust companies’ assets under management climbed 3.8% to 12.9T yuan ($2.1T) as of Sep 30 from 3 months earlier, the China Trustee Association said. Gov efforts to control shadow banking are sapping momentum from an economy that expanded in Q3 at the slowest pace since 2009. China had 397 “risky” trust products valued at 82.4B yuan as of Sep, down from 91.7B yuan 3 months earlier. Moody’s warned last month that significant risks remain in the $6.2T shadow banking industry after delayed payments & last-minute bailouts of trust products. Today’s report showed that the 68 trust firms had net assets of 288B yuan, suggesting a limited ability to shoulder any implicit guarantee for their products. The pool of trust assets has swelled more than 500% in less than 5 years. China averted its first trust default in Jan as investors in a 3B-yuan product issued by China Credit Trust were bailed out days before it matured. Trust products’ average yield rose to 7.92% in Q3 from 6.87% 3 months earlier. Trust companies sold 15K products in the first 9 months of 2014, up slightly from a year earlier. Combined profits at China’s trust companies rose 11.4% to 43.4B yuan for the first 9 months of this year.
China’s Trust Assets Expand Least Since 2010
German industrial production rebounded less than forecast in Sep, signaling that Europe's largest economy is struggling to recover. Production, adjusted for seasonal swings, rose 1.4% from Aug, when it contracted a revised 3.1%, the biggest decline since Jan 2009, the Economy Ministry said. Economists predicted a 2% increase in output. Production declined 0.4% in Q3. Germany's economy contracted in Q2 as political tensions with Russia sapped exports & weighed on confidence. Its return to growth is key to shore up a euro-area recovery that the ECB supports with asset purchases & long-term loans. Manufacturing output increased 1.7% after dropping 4.2% in Aug, with production of investment goods up 4.5%. “Momentum in the industry is constrained by a continuously difficult international environment,” the economy ministry said. “There are no noteworthy impulses in the short term.” At the same time, exports surged 5.5% in Sep from the previous month, marking the biggest increase since May 2010.
German Industrial Production Rises Less Than Economists Forecast
The jobs report was pretty much a non-event. The news was fairly good & that was already baked into the markets. The data was less than spectacular, just good enough to keep the bulls happy. This weekend, traders will have more time to evaluate the jobs data & think about where DC is going, which looks to be running nowhere fast. Immigration reform is a top priority & the 2 sides are far apart.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLZ14.NYM | ....Crude Oil Dec 14... | 79.08 |  .....1.17 | (1.5%) |
| GCX14.CMX | ...Gold Nov 14 | .....1,152.60 | ...10.30 | (0.9%) |
Unemployment in the US dropped in Oct to the lowest level in 6 years & employers added more than 200K workers to payrolls for a 9th consecutive month as the economy powered past a global slowdown. The 214K increase in employment followed a 256K advance the prior month that was more than initially estimated, according to the Labor Dept. The jobless rate fell to 5.8%, even as more people entered the labor force, boosting the share of the population working to the highest in 5 years. The report probably keeps Federal Reserve policy makers on track to raise interest rates in 2015 even as wages continued to show little momentum. The increase in Oct employment was broad-based, with factories, construction companies & retailers among those adding employees. Payrolls at restaurants jumped 41K & hourly earnings for all workers rose less than projected. The forecast called for a 235K advance in Oct payrolls. The unemployment rate fell to the lowest since Jul 2008 & is projected to hold at 5.9%. The share of the population with jobs rose to 59.2% in Oct, the highest since Jul 2009, from 59% the prior month. Average hourly earnings for all workers rose 0.1% from the prior month. They were up 2% over the past 12 months. The average work week for all employees increased 6 minutes to 34.6 hours. Private payrolls, which don’t include gov, increased 209K in Oct after a 244K advance. Factories added 15K workers after a 9K gain in Sep. Construction companies took on 12K workers. Employment at private service providers rose 181K, including a 52K gain in the leisure & hospitality industry that reflected more hiring at eating establishments. The underemployment rate, which includes part-time workers who’d prefer a full-time position & people who want to work but have given up looking, declined to 11.5%, the lowest since Sep 2008, from 11.8%.
U.S. Payrolls Rise as Jobless Rate Drops to Six-Year Low
China's trust assets grew the least since 2010 in Q3 as regulators tried to limit shadow banking risks & investors grew more wary of defaults. Trust companies’ assets under management climbed 3.8% to 12.9T yuan ($2.1T) as of Sep 30 from 3 months earlier, the China Trustee Association said. Gov efforts to control shadow banking are sapping momentum from an economy that expanded in Q3 at the slowest pace since 2009. China had 397 “risky” trust products valued at 82.4B yuan as of Sep, down from 91.7B yuan 3 months earlier. Moody’s warned last month that significant risks remain in the $6.2T shadow banking industry after delayed payments & last-minute bailouts of trust products. Today’s report showed that the 68 trust firms had net assets of 288B yuan, suggesting a limited ability to shoulder any implicit guarantee for their products. The pool of trust assets has swelled more than 500% in less than 5 years. China averted its first trust default in Jan as investors in a 3B-yuan product issued by China Credit Trust were bailed out days before it matured. Trust products’ average yield rose to 7.92% in Q3 from 6.87% 3 months earlier. Trust companies sold 15K products in the first 9 months of 2014, up slightly from a year earlier. Combined profits at China’s trust companies rose 11.4% to 43.4B yuan for the first 9 months of this year.
China’s Trust Assets Expand Least Since 2010
German industrial production rebounded less than forecast in Sep, signaling that Europe's largest economy is struggling to recover. Production, adjusted for seasonal swings, rose 1.4% from Aug, when it contracted a revised 3.1%, the biggest decline since Jan 2009, the Economy Ministry said. Economists predicted a 2% increase in output. Production declined 0.4% in Q3. Germany's economy contracted in Q2 as political tensions with Russia sapped exports & weighed on confidence. Its return to growth is key to shore up a euro-area recovery that the ECB supports with asset purchases & long-term loans. Manufacturing output increased 1.7% after dropping 4.2% in Aug, with production of investment goods up 4.5%. “Momentum in the industry is constrained by a continuously difficult international environment,” the economy ministry said. “There are no noteworthy impulses in the short term.” At the same time, exports surged 5.5% in Sep from the previous month, marking the biggest increase since May 2010.
German Industrial Production Rises Less Than Economists Forecast
The jobs report was pretty much a non-event. The news was fairly good & that was already baked into the markets. The data was less than spectacular, just good enough to keep the bulls happy. This weekend, traders will have more time to evaluate the jobs data & think about where DC is going, which looks to be running nowhere fast. Immigration reform is a top priority & the 2 sides are far apart.
Dow Jones Industrials
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