Wednesday, November 4, 2015

Nervous markets wobble on mixed economic data

Dow pulled back 8, decliners barely ahead of advancers & NAZ lost 6.  The MLP index dropped 7+ to the 335s after yesterday's big increase & the REIT index was fractionally lower to the 326s.  Junk bond funds slid lower & Treasuries edged higher.  Oil gave up some of its recent gains & gold inched higher.

AMJ (Alerian MLP Index tracking fund)

CLZ15.NYM....Crude Oil Dec 15...47.76 Down ...0.14  (0.3%)

GCX15.CMX...Gold Nov 15.....1,118.30 Up ...4.10 (0.4%)

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Companies added 182K workers in Oct, signaling steady improvement in the US job market.  The increase in employment followed a revised 190K rise in the prior month, according to the ADP Research Institute.  The projection called for an advance of 180K.  An expansion in headcounts that leads to faster wage growth will probably help accelerate consumer spending, the biggest part of the economy.  The prior month’s figure was previously reported as an advance of 200K.  Goods-producing industries, which include manufacturers & builders, increased headcounts 24K.  Hiring in construction climbed 35K, while factories cut 2K jobs.  Payrolls at service providers increased 158K.  “The economy is creating close to 200,000 jobs per month,” Mark Zandi, chief economist at Moody’s Analytics, said (Moody’s produces the figures with ADP).  “Job gains are broad-based with energy and manufacturing alone subtracting from the top line. Small businesses, in particular, are contributing to the labor market’s solid performance.”  Companies employing 500 or more workers added 29K jobs.  Medium-sized businesses, 50-499 employees, boosted payrolls 63K & small companies took on 90K.  The ADP report is based on data from businesses with almost 24M workers on their combined payrolls.

ADP Says Companies in U.S. Added 182,000 Workers in October

The Institute for Supply Management’s gauge of service-sector growth rose to 63 in Oct from 60 in Sep.  The reading was higher than the drop to 59.5 that had been expected, & is the highest since Jul.

U.S. Service-Sector Growth Highest Since July

The US trade gap shrank in Sep to a 7-month low, reflecting declining purchases of foreign fuel as the economy continued its drive toward energy independence.  The deficit decreased 15% to $40.8B from a revised $48B in Aug, according to the Commerce Dept.  The forecast called for a $41B shortfall.  Demand for petroleum produced abroad fell to the lowest level in more than a decade, while exports climbed.  The narrowing meant trade had little impact on the economy in Q3, easing concern that slower global growth & a stronger dollar would cause exports to slump, & growing demand from American consumers would swell imports.  The increase in exports, however, was led by volatile categories such as food & artwork, indicating the gain could be reversed in coming months.  Imports decreased 1.8% to $228.7B from $233B in Aug.  In addition to petroleum, the drop reflected slower sales for civilian aircraft, telecommunications equipment & mobile phones.  Conversely, demand for goods & services from China increased, driving the trade gap with the that economy to a record $36.3B.  The US imported $13.8B worth of petroleum, the least since 2004, partly reflecting a slump in prices.  The trade shortfall excluding petroleum narrowed to $35.2B in Sep from $41.1B.  Exports rose 1.6% to $187.9, paced by sales of soybeans.  After eliminating the effects of price fluctuations, which generates the numbers used to calculate GDP, the trade deficit narrowed to $57.2B from $63B the previous month.

U.S. Trade Gap Narrows on Lowest Oil Imports in a Decade

Stocks are awaiting developments.  Earnings season has been disappointing, but buyers were eager to bet on the future.  Janet will testify today.  Additionally, New York Fed pres William Dudley is giving a speech at lunchtime which will be watched by traders.  Markets have had a stellar run  & may need time to digest those gains.

Dow Jones Industrials

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