Dow jumped 148, advancers over decliners almost 4-1 & NAZ rose 46. The MLP index rose 2+ to the 446s & the REIT index added 4+ to the 321s. Junk bond funds gained & Treasuries also found buyers. Oil was drifted lower & gold went a little higher.
AMJ (Alerian MLP Index tracking fund)
Fewer Americans than forecast filed applications for unemployment benefits last week, pushing the average over the past month to the lowest level in 15 years & underscoring labor-market strength. Jobless claims decreased 1K to 264K, according to the Labor Dept. The forecast projected 273K. The 4-week average, a less-volatile measure, was the lowest since Apr 2000. Fewer workers are being let go, a sign that demand for staffing remains robust & that a slowdown in economic growth was due to transitory factors, like bad weather & port disputes on the West Coast. Persistently low layoffs & greater employment gains should help wages pick up, supporting consumer spending. The number continuing to receive jobless benefits held at 2.23 in the latest week. In that same period, the unemployment rate among people eligible for benefits held at 1.7%, where it’s been since mid-Mar. Initial jobless claims reflect weekly layoffs & typically decrease before job growth can accelerate. Many layoffs now reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Wholesale prices in the US unexpectedly declined in Apr from the prior month, indicating inflation is well-contained as the Federal Reserve (FED) weighs when to raise the benchmark interest rate. The 0.4% drop in the producer-price index followed a 0.2% gain in Mar that was the first increase in 5 months, according to the Labor Dept. The decrease exceeded the lowest estimate of economists. Over the past 12 months, wholesale prices fell 1.3%, the most in records dating back to 2010. Businesses have seen muted wholesale costs as a plunge in energy prices in H2-2014 & a stronger dollar boosted by subdued growth abroad limit inflation early in the pipeline. FED officials are looking for signs that price growth will rise toward their goal as they consider raising rates for the first time in 9 years. The year-over-year drop in producer prices followed a 0.8% decline in the 12 months thru Mar. The report showed fuel costs decreased 2.9% last month & food expenses fell 0.9%. The PPI excluding volatile food & fuel prices decreased 0.2% from the prior month, depressed by falling profit margins at wholesalers & retailers. That measure was forecast to rise 0.1% after a 0.2% increase in Mar. The core index increased 0.8% in the year ended Apr after a 0.9% gain. Eliminating food, energy & trade services, which some prefer because it strips out another one of the most volatile components of PPI, costs rose 0.1% last month after a 0.2% advance in Mar. They climbed 0.7% from Apr 2014 after a 0.8% gain. The personal consumption expenditures index, the preferred inflation gauge at the FED, rose 0.3% in Mar from a year earlier & has been below the FED 2% goal since May 2012. The core measure increased 1.3% in the 12 months ending in Mar.
China’s central bank told lenders to hold off from using the extra room to raise deposit rates that officially became available from May 11, according to leakers. The twist of loosening restrictions via a higher interest rate ceiling, it was boosted to 1.5 times benchmark levels from 1.3 times, & then tightening via instructions to lenders shows China’s struggle to push thru reforms in a faltering economy. Revamping deposit rates is the “riskiest” part of rate liberalization, the central bank said previously. In the long-term, market reforms may strengthen the economy. In the short-term, excessive competition for deposits could flow thru to higher borrowing costs for companies & increased risks of instability in the financial system. The central bank had already signaled that it wouldn’t stand aside as lenders set rates, saying in a statement after a rate cut & the increase in the deposit rate ceiling that it would “provide guidance.” It also said that financial institutions with “good interest-rate pricing” would get benefits, while those with “unreasonable” pricing would be restrained.
Economic data that was really routine put the stock market in a rally mode. Go figgah! The news was not all that inspiring, but others have different thoughts. Dow is flirting with setting a new record & NAZ is also close to its record close. On the intl front, the Greek debt mes lingers on, China is trying to figure out how to restart it growth engine & the MidEast story is unsettled. However traders aren't bothered.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLM15.NYM | ...Crude Oil Jun 15 | ...60.59 |  ...0.09 | (0.2%) |
| GCK15.CMX | ...Gold May 15 | ....1,225.60 | ...7.20 | (0.6%) |
Fewer Americans than forecast filed applications for unemployment benefits last week, pushing the average over the past month to the lowest level in 15 years & underscoring labor-market strength. Jobless claims decreased 1K to 264K, according to the Labor Dept. The forecast projected 273K. The 4-week average, a less-volatile measure, was the lowest since Apr 2000. Fewer workers are being let go, a sign that demand for staffing remains robust & that a slowdown in economic growth was due to transitory factors, like bad weather & port disputes on the West Coast. Persistently low layoffs & greater employment gains should help wages pick up, supporting consumer spending. The number continuing to receive jobless benefits held at 2.23 in the latest week. In that same period, the unemployment rate among people eligible for benefits held at 1.7%, where it’s been since mid-Mar. Initial jobless claims reflect weekly layoffs & typically decrease before job growth can accelerate. Many layoffs now reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Jobless Claims in U.S. Fall as 4-Week Average at 15-Year Low
Wholesale prices in the US unexpectedly declined in Apr from the prior month, indicating inflation is well-contained as the Federal Reserve (FED) weighs when to raise the benchmark interest rate. The 0.4% drop in the producer-price index followed a 0.2% gain in Mar that was the first increase in 5 months, according to the Labor Dept. The decrease exceeded the lowest estimate of economists. Over the past 12 months, wholesale prices fell 1.3%, the most in records dating back to 2010. Businesses have seen muted wholesale costs as a plunge in energy prices in H2-2014 & a stronger dollar boosted by subdued growth abroad limit inflation early in the pipeline. FED officials are looking for signs that price growth will rise toward their goal as they consider raising rates for the first time in 9 years. The year-over-year drop in producer prices followed a 0.8% decline in the 12 months thru Mar. The report showed fuel costs decreased 2.9% last month & food expenses fell 0.9%. The PPI excluding volatile food & fuel prices decreased 0.2% from the prior month, depressed by falling profit margins at wholesalers & retailers. That measure was forecast to rise 0.1% after a 0.2% increase in Mar. The core index increased 0.8% in the year ended Apr after a 0.9% gain. Eliminating food, energy & trade services, which some prefer because it strips out another one of the most volatile components of PPI, costs rose 0.1% last month after a 0.2% advance in Mar. They climbed 0.7% from Apr 2014 after a 0.8% gain. The personal consumption expenditures index, the preferred inflation gauge at the FED, rose 0.3% in Mar from a year earlier & has been below the FED 2% goal since May 2012. The core measure increased 1.3% in the 12 months ending in Mar.
Wholesale U.S. Prices Showed Broad-Based Retreat in April
China’s central bank told lenders to hold off from using the extra room to raise deposit rates that officially became available from May 11, according to leakers. The twist of loosening restrictions via a higher interest rate ceiling, it was boosted to 1.5 times benchmark levels from 1.3 times, & then tightening via instructions to lenders shows China’s struggle to push thru reforms in a faltering economy. Revamping deposit rates is the “riskiest” part of rate liberalization, the central bank said previously. In the long-term, market reforms may strengthen the economy. In the short-term, excessive competition for deposits could flow thru to higher borrowing costs for companies & increased risks of instability in the financial system. The central bank had already signaled that it wouldn’t stand aside as lenders set rates, saying in a statement after a rate cut & the increase in the deposit rate ceiling that it would “provide guidance.” It also said that financial institutions with “good interest-rate pricing” would get benefits, while those with “unreasonable” pricing would be restrained.
PBOC Said to Tell China Banks to Hold Off Raising Deposit Rates
Economic data that was really routine put the stock market in a rally mode. Go figgah! The news was not all that inspiring, but others have different thoughts. Dow is flirting with setting a new record & NAZ is also close to its record close. On the intl front, the Greek debt mes lingers on, China is trying to figure out how to restart it growth engine & the MidEast story is unsettled. However traders aren't bothered.
Dow Jones Industrials
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