Dow rose 53, advancers over deliners better than 2-1 & NAZ clawed its way up 1. The MLP index crawled higher in the 281s & the REIT index rose fractionally to the 356s. Junk bond funds inched higher & Treasuries retreated. Oil slid back to the 46s & gold climbed 2 to 1324.
AMJ (Alerian MLP Index tracking fund)
The US economy added 156K net new jobs in Aug, missing expectations for 180K jobs, & the unemployment rate ticked up slightly to 4.4% from 4.3%. The labor force participation rate stayed flat at 62.9% during the month & average hourly earnings meanwhile increased by 3¢ (0.1%). The jobs numbers come on the heels of a report Wed from ADP, which revealed that 237K private sector jobs were added in Aug, handily beating expectations of 183K jobs. According to the report, Aug proved to be the biggest monthly increase for private sector jobs in five months.
The largest carmakers in the US posted mixed sales results after Hurricane Harvey slammed one of the country's largest auto markets, with Nissan leading declines in what might have otherwise been the first month of growth for the industry this year. Nissan deliveries plunged 13%, missing the estimate for a drop of just 0.6%. Sales also fell for Fiat Chrysler (FCAU) & Ford (F) while General Motors (GM) & Toyota (TM) gained. The varied performance for 5 of the largest US automakers comes as Houston, a top-10 market for new-vehicle purchases, lost nearly a week of selling days due to heavy rain & flooding from Harvey. Kelley Blue Book & LMC Automotive trimmed sales projections they had released before the hurricane hit. Ahead of the storm, some analysts had been expecting US sales to record their first monthly gain this year. Analysts predicted the industry's annualized selling rate, adjusted for seasonal trends, may have dropped to 16.4M vehicles in Aug, from 17.2M a year earlier. GM also estimated an industry sales pace of 16.4M. While the storm may have muted sales in Aug, car buying is expected to pick up as drivers buy replacement vehicles & reconstruction work spurs demand for full-size pickups. It has been estimated that the Houston metro area ranks 8th nationwide in registered vehicles, with 5.6M in operation & accounts for over 2.3% of US new-vehicle sales. Houston may have lost between 300-500K cars & trucks, potentially more than the 325K new vehicles sold in the region during the last 12 months. That compares with the 250K autos lost following NY's Hurricane Sandy in 2012. As many as 130M new vehicles that were on dealer lots in the Houston area may be scrapped as a result of flooding damage. The losses may actually turn out to be a silver lining, alleviating concerns about bloated car & truck supply that surged earlier this year to the highest level since 2004.
Fiat Chrysler, Ford Sales Drop
US factories ramped up in Aug to the fastest pace of expansion in 6 years, driven by employment gains, figures from the Institute for Supply Management showed. Factory index climbed to 58.8 (est. 56.5) from 56.3 in Jul (readings above 50 indicate expansion). Employment gauge jumped to 59.9, highest since Jun 2011, from 55.2. The measure of new orders fell to 60.3 from 60.& the order backlog gauge rose to 57.5, matching a 3-year high. Steady increases in consumer spending & business investment are delivering sustained gains in manufacturing, which bodes well for Q3 economic growth. While orders cooled in Aug & production showed a modest uptick, the rise in backlogs will keep factories humming & underpin demand for workers. The ISM hiring gauge also is in sync with the gov measure of factory payrolls, released as part of the Labor Dept Aug jobs report earlier today. ISM production measure rose to 61 in Aug from 60.6 in Jul & the measure of export orders fell to 55.5, the 3rd decline in 4 months, following 57.5. Gauges of supplier deliveries climbed to 57.1 from 55.4.
The Dow is back flirting with 22K, just 1% under its record highs. The jobs report was weaker than expected although the ADP report was favorable. All data is currently suspect because Harvey's effect is not or only barely included. Next week Congress returns with a ton of work to get done in only 12 working days in Sep. Traders will be watching those guys very closely, especially work done on the new budget, raising the debt ceiling & tax reform. Gold, negative bets on the stock market, remains in high territory for recent times.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 46.82 | -0.41 | -0.9% |
| GC=F | Gold | 1,325.60 | 9: | +3.40 | +0.3% |
The US economy added 156K net new jobs in Aug, missing expectations for 180K jobs, & the unemployment rate ticked up slightly to 4.4% from 4.3%. The labor force participation rate stayed flat at 62.9% during the month & average hourly earnings meanwhile increased by 3¢ (0.1%). The jobs numbers come on the heels of a report Wed from ADP, which revealed that 237K private sector jobs were added in Aug, handily beating expectations of 183K jobs. According to the report, Aug proved to be the biggest monthly increase for private sector jobs in five months.
US economy adds fewer jobs in August than expected
The largest carmakers in the US posted mixed sales results after Hurricane Harvey slammed one of the country's largest auto markets, with Nissan leading declines in what might have otherwise been the first month of growth for the industry this year. Nissan deliveries plunged 13%, missing the estimate for a drop of just 0.6%. Sales also fell for Fiat Chrysler (FCAU) & Ford (F) while General Motors (GM) & Toyota (TM) gained. The varied performance for 5 of the largest US automakers comes as Houston, a top-10 market for new-vehicle purchases, lost nearly a week of selling days due to heavy rain & flooding from Harvey. Kelley Blue Book & LMC Automotive trimmed sales projections they had released before the hurricane hit. Ahead of the storm, some analysts had been expecting US sales to record their first monthly gain this year. Analysts predicted the industry's annualized selling rate, adjusted for seasonal trends, may have dropped to 16.4M vehicles in Aug, from 17.2M a year earlier. GM also estimated an industry sales pace of 16.4M. While the storm may have muted sales in Aug, car buying is expected to pick up as drivers buy replacement vehicles & reconstruction work spurs demand for full-size pickups. It has been estimated that the Houston metro area ranks 8th nationwide in registered vehicles, with 5.6M in operation & accounts for over 2.3% of US new-vehicle sales. Houston may have lost between 300-500K cars & trucks, potentially more than the 325K new vehicles sold in the region during the last 12 months. That compares with the 250K autos lost following NY's Hurricane Sandy in 2012. As many as 130M new vehicles that were on dealer lots in the Houston area may be scrapped as a result of flooding damage. The losses may actually turn out to be a silver lining, alleviating concerns about bloated car & truck supply that surged earlier this year to the highest level since 2004.
Fiat Chrysler, Ford Sales Drop
US factories ramped up in Aug to the fastest pace of expansion in 6 years, driven by employment gains, figures from the Institute for Supply Management showed. Factory index climbed to 58.8 (est. 56.5) from 56.3 in Jul (readings above 50 indicate expansion). Employment gauge jumped to 59.9, highest since Jun 2011, from 55.2. The measure of new orders fell to 60.3 from 60.& the order backlog gauge rose to 57.5, matching a 3-year high. Steady increases in consumer spending & business investment are delivering sustained gains in manufacturing, which bodes well for Q3 economic growth. While orders cooled in Aug & production showed a modest uptick, the rise in backlogs will keep factories humming & underpin demand for workers. The ISM hiring gauge also is in sync with the gov measure of factory payrolls, released as part of the Labor Dept Aug jobs report earlier today. ISM production measure rose to 61 in Aug from 60.6 in Jul & the measure of export orders fell to 55.5, the 3rd decline in 4 months, following 57.5. Gauges of supplier deliveries climbed to 57.1 from 55.4.
U.S. Manufacturing Expanded in August at Fastest Pace Since 2011
The Dow is back flirting with 22K, just 1% under its record highs. The jobs report was weaker than expected although the ADP report was favorable. All data is currently suspect because Harvey's effect is not or only barely included. Next week Congress returns with a ton of work to get done in only 12 working days in Sep. Traders will be watching those guys very closely, especially work done on the new budget, raising the debt ceiling & tax reform. Gold, negative bets on the stock market, remains in high territory for recent times.
Dow Jones Industrials
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