Wednesday, April 5, 2017

Markets soar on strong payroll data

Dow vaulted 174, advancers over decliners 3-1 & NAZ gained 23.  The MLP index jumped up 2+ to the 327s & the REIT index was fractionally higher to the 346s.  Junk bond funds went up & Treasuries were weak.  Oil shot up to the high 51s & gold lost 10.

AMJ (Alerian MLP Index tracking fund)

Crude Oil May 17

Gold Futures,Jun-2017

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Companies added workers to US payrolls in Mar at the fastest pace since Dec 2014 on solid gains in construction and manufacturing and at small businesses, data from the ADP Research Institute.  Private payrolls climbed by 263K (forecast was 185K) after a 245K gain in Feb that was revised lower from initial reading of 298K.  Goods-producing industries, which include manufacturers & builders, increased headcounts by 82K after a 100K gain, the strongest 2 months in data going back to 2002.  Service providers boosted payrolls 181K after a 145K increase.  Businesses continue to retain as well as take on more workers to meet demand, helping to sustain the progress that has put the labor market at or near the Fed's maximum-employment objective.  The Bureau of Labor Statistics report was projected to show a gain of 170K non-gov, non-farm jobs following a 227K advance.  Estimates may be raised after this data.  “Job growth is off to a strong start in 2017. The gains are broad based but most notable in the goods-producing side of the economy including construction, manufacturing and mining,” Mark Zandi, chief economist at Moody's Analytics, said (Moody's produces the figures with ADP).

ADP Says Companies in U.S. Added 263,000 Employees in March

Shares wavered in Asia as regional markets appeared to shrug off the latest North Korean missile test.  But trading was light ahead of US data releases & meetings later in the week between Pres Trump & his Chinese counterpart, Xi Jinping.  Japan's Nikkei 225 index gained 0.1% to 18,826 & Hong Kong's Hang Seng fell 0.3% to 24,197.  The Shanghai Composite index advanced 1.1% to 3256.  Trade agreements & regional tensions will be in focus as Trump & Xi meet Thurs & Friday at Mar-a-Lago in FL.  While some analysts expect the 2 sides to keep friction to a minimum by following an agreed-upon script, others worry Trump's past harsh criticism of China & mounting dissatisfaction with Beijing in American business circles auger ill for the summit. The Commerce Dept said US factory orders kept growing in Feb thanks to greater demand for commercial aircraft.

Asian shares mixed ahead of Trump-Xi meeting

Oil hit a one-month high near $55 a barrel as a fall in US crude inventories raised hopes OPEC-led supply cuts were clearing a glut, while an outage at the largest UK North Sea oilfield lent support.  US crude inventories fell by a more-than-expected 1.8M barrels last week, American Petroleum Institute data showed.  The focus is now on whether the gov supply report today will confirm the decline.  Oil also rose after an outage at the 180K-barrels-per-day Buzzard field in the North Sea.  Buzzard is the largest field contributing to Forties, the most important of the 4 crude streams underpinning Brent.

Oil Hits One-Month High Near $55 on Tighter Supplies

Stocks are having another good day after the jobs report.  Trump has been talking up the economy since his election.  Company execs & investors like what they hear.  Dow has risen more than 2½K, an eye popping advance, since the election.  More macro economic data is coming this week along with gov jobs data on Fri.  After struggling, the bulls are back in command.

Dow Jones Industrials


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