Dow rose 207, advancers over decliners 5-2 & NAZ gained 74. The MLP index went up 2+ to the 269s & the REIT index added 1+ to the 241s. Junk bond funds went higher & Treasuries dropped, taking the 10 year Treasury yield up 8 basis points to 2.9%. Oil was weak again, falling to the 66s, & gold fell 6 to 1298.
AMJ (Alerian MLP Index tracking fund)
Stocks were higher following the May employment report, which surpassed expectations. The US economy added 223K workers in May, surpassing the 188K analysts expected. The unemployment rate fell to 3.8%, an 18-year low and down from Apr's 3.9%. Wage inflation inched higher, to 0.3%. Treasury yields climbed following the report, on the expectation that it would support an impending Fed rate hike. Financial stocks ascended. In commodities, both gold & oil futures were lower.
Stocks rally, jobs report well received
Manufacturing activity expanded at a faster pace than forecast last month, according to the Institute of Supply Management. The ISM manufacturing index jumped to 58.7 in May from 57.3 in Apr. The forecast called for manufacturing growth to hit 58.4 last month. May also marked the 21st consecutive month of expansion for the manufacturing sector (a reading above 50 for the index indicates expansion in the manufacturing sector & a reading below 50 signals contraction). Construction spending rebounded more than expected in April as investment in private construction projects notched its biggest gain since 2012, offsetting a drop in public outlays. The Commerce Dept said construction spending surged 1.8%, the largest increase since Jan 2016, after an unrevised 1.7% decline in Mar. The forecast was for construction spending rebounding 0.8% in Apr. Construction spending accelerated 7.6% on a year-on-year basis. In Apr, spending on private construction projects jumped 2.8%, the largest increase in 6 years, reversing the 2.6 percent drop iin Mar. Outlays on private residential projects shot up 4.5%, the biggest rise since 1993, following a 4.1% plunge in Mar. Spending on nonresidential structures rose 0.8% in Apr after falling 0.6% in the prior month. Investment in public construction projects decreased 1.3% after rising 1.2% in Mar. Spending on federal gov construction projects tumbled 10.2%, following a 1.8% increase in Mar.
ISM manufacturing index beats estimates; construction spending posts biggest jump since 2016
The bulls returned following a favorable jobs report (along with other helpful economic data). However the Dow chart below shows it has been going sideways for months. Ups & downs in trade negotiations (with more downs than ups) have kept a lid on bringing back the post election rally. That factor is likely to continue for a very long time.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 66.54 | -0.50 | -0.8% |
| GC=F | Gold | 1,297.70 | -7.00 | -0.5% |
The US added a higher-than-expected number of
jobs in May, with the Labor Dept reporting that 223K jobs were
added, more than the 188K jobs expected. Job creation was also above the average 190K jobs created each month after the past year. The unemployment rate ticked down to 3.8% from Apr's 3.9% (to an 18-year low). Wage
inflation came in above expectations, at 0.3%. Analysts were anticipating wages would increase by 0.2%. The jobs report reinforces an outlook for solid
economic growth, driven by consumption.
Job creation last month stronger than expected
Stocks were higher following the May employment report, which surpassed expectations. The US economy added 223K workers in May, surpassing the 188K analysts expected. The unemployment rate fell to 3.8%, an 18-year low and down from Apr's 3.9%. Wage inflation inched higher, to 0.3%. Treasury yields climbed following the report, on the expectation that it would support an impending Fed rate hike. Financial stocks ascended. In commodities, both gold & oil futures were lower.
Stocks rally, jobs report well received
EU trade chief Cecilia Malmstrom says
that the Trump administration's tariffs on steel & aluminum exports to
the US will hurt global growth. Malmstrom said in reaction to the sanctions that "the situation is worrying, it could escalate." She added that "the economic recovery that we have
seen lately, notably in the EU, but also globally, risks of course to
be diminished by this." Malmstrom said "The United States is playing a dangerous game." She saed the bloc is taking China to the
World Trade Organization over a dispute on intellectual property. Malmstrom
said that "technological innovation is the bedrock of our
economy," & insisted the EU would step in when infractions are seen. In a more general context, she added that "if players in the world do not stick to the rule book, the system might collapse." Malmstrom said that the tariffs imposed on
European steel & aluminum exports to the US "is further weakening the Trans-Atlantic relations." She added the Trump measures "will cause a lot of damage to our steel and
aluminum industry" & dismissed the argument that the tariffs were
needed for US national security reasons. She said that, "Internal security is not relevant. It is pure protectionism."
The Latest: EU says US tariffs will hurt global growth
Manufacturing activity expanded at a faster pace than forecast last month, according to the Institute of Supply Management. The ISM manufacturing index jumped to 58.7 in May from 57.3 in Apr. The forecast called for manufacturing growth to hit 58.4 last month. May also marked the 21st consecutive month of expansion for the manufacturing sector (a reading above 50 for the index indicates expansion in the manufacturing sector & a reading below 50 signals contraction). Construction spending rebounded more than expected in April as investment in private construction projects notched its biggest gain since 2012, offsetting a drop in public outlays. The Commerce Dept said construction spending surged 1.8%, the largest increase since Jan 2016, after an unrevised 1.7% decline in Mar. The forecast was for construction spending rebounding 0.8% in Apr. Construction spending accelerated 7.6% on a year-on-year basis. In Apr, spending on private construction projects jumped 2.8%, the largest increase in 6 years, reversing the 2.6 percent drop iin Mar. Outlays on private residential projects shot up 4.5%, the biggest rise since 1993, following a 4.1% plunge in Mar. Spending on nonresidential structures rose 0.8% in Apr after falling 0.6% in the prior month. Investment in public construction projects decreased 1.3% after rising 1.2% in Mar. Spending on federal gov construction projects tumbled 10.2%, following a 1.8% increase in Mar.
ISM manufacturing index beats estimates; construction spending posts biggest jump since 2016
The bulls returned following a favorable jobs report (along with other helpful economic data). However the Dow chart below shows it has been going sideways for months. Ups & downs in trade negotiations (with more downs than ups) have kept a lid on bringing back the post election rally. That factor is likely to continue for a very long time.
Dow Jones Industrials
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