Wednesday, October 5, 2016

Higher markets on economic data

Dow climbed 112 ,advancers over decliners 3-2 & NAZ went up 26.  The MLP index added 2+ to 311 & the REIT index fell 7 to the 336s.  Junk bond funds were pretty much flat & Treasuries declined.  Oil rose to almost 50 (see below) & gold hardly budged.

Dow Jones Industrials

stock chart

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Light Sweet Crude Oil Futures,N

Live 24 hours gold chart [Kitco Inc.]

US services sector activity rebounded to an 11-month high in Sep, an encouraging sign for economic growth that may increase the prospect of a Federal Reserve interest rate hike this year.  The Institute of Supply Management (ISM) said its non-manufacturing activity index surged to a reading of 57.1, the highest level since Oct 2015.  Last month's reading followed a disappointing drop in Aug.  Economists had forecast the index rising to 53.0.  A reading above 50 indicates expansion in the sector, which accounts for more than 2/3 of US economic activity.  Improvement in the index was broad-based with business activity & the employment sub-indices reaching 11-month highs.

U.S. services sector activity surges to 11-month high

Oil futures settled sharply higher after gov data revealed a 5th-straight weekly decline in domestic supplies of crude.  Nov West Texas Intermediate crude rose $1.14 (2.3%) to settle at $49.83 a barrel, the highest finish for a front-month contract since Jun 29.

Oil Futures Settle At a More Than 3-month High

While stocks had a nice bounce today, the Dow chart below shows nothing went on, similar to its pattern in the last several months.  Everybody is waiting for the jobs report on Fri & that looks like it will be a mediocre one, giving analysts another item to factor into forecasts.

Dow Jones Industrials


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