Dow soared 297, advancers over decliners better than 3-1 & NAZ jumped up 125. The MLP index rose in the 246s. Junk bond funds crawled higher & Treasuries rose in price once again. Oil climbed to the 53s & gold gained 8 to 1351, extending its wining streak to 8 sessions.
AMJ (Alerian MLP Index tracking fund)
US stocks rise after weak May jobs report
Wholesale inventories in the US jumped 0.8% in May, the gov said, more than double the the forecast. An increase in inventories adds to GDP. Sales fell 0.4% in the month, however, suggesting companies might have to scale back production if demand fails to rebound. The ratio of inventories to sales rose to 1.34 from 1.33 That's how many months it would take to sell all the inventory on hand. One year ago, the inventory-to-sales ratio was lower at 1.28.
The US & Mexico have made "a lot of progress" in border-security talks in DC, White House economist Kevin Hassett said, just days before tariffs on Mexican goods are set to go into effect. Talks are continuing for a 3rd day in DC. Pres Trump has threatened 5% tariffs on all Mexican imports beginning Mon if the country doesn't stem the flow of Central American migrants to the US border. Mark Short, chief of staff to VP Mike Pence, separately said Trump could turn off the tariff threat over the weekend if talks go well.
The Dow is up an eye-popping 1.2K this week. However, while stocks are rebounding from oversold conditions, all is not well for this rally. Beyond technical factors, economic indicators are coming in sluggish & safe haven investments of gold & Treasuries are also in a rally mode. That divergence can not last. Hopes for a rate cut in a couple of weeks are already discounted & trade talks are still lumbering along. The bears are not in hiding.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 53.26 | +0.67 | +1.3% |
| GC=F | Gold | 1,345.00 | +2.30 | +0.2% |
Stocks rose, despite the addition of just 75K jobs in May, putting the blue-chip Dow on pace to snap a 6-week losing streak. The forecast called for employers to have added 185K jobs after surging
263K in April, but the Labor Dept said only 75K jobs were
created last month. The unemployment rate remained steady at 3.6%, its lowest level since 1969. The big miss could add pressure on the Federal Reserve to cut interest rates, perhaps as soon as next month. The US decision to delay tariffs on Chinese
goods gave exporters in the world's 2nd-largest economy more time
before higher tariffs also lifted the mood of traders. The yield on the 10-year Treasury slipped to
2.06%. Because the yield and price of bonds move in
opposite directions declining yields signal rising demand for the safety
of debt at the expense of equity. For some investors, falling interest rates confirm that the American economy is weakening. Crude oil prices rose:
West Texas Intermediate climbed 0.3% to $52.75 per barrel & the
price of Brent crude oil, the global benchmark, was up 1% at
$62.28 a barrel. Chinese markets were closed for a holiday, but
Japan's Nikkei 225 ended up 0.5% & Korea's benchmark Kospi
index gained 0.2%. Britain's FTSE 100 was up 0.9%, France's CAC 40 climbed 1.5% & Germany's DAX rose 0.8%.
US stocks rise after weak May jobs report
The US added a less-than-expected 75K in May, indicating that trade tensions with China & Mexico could be weighing on employers as concerns over an economic slowdown persist. The forecats called for an increase of 185K jobs last month. The
number of positions the US added in Apr dropped to 224K, down
from a previously forecast of 263K, according to revised data from the
Bureau of Labor Statistics. Mar employment gains were also corrected
down to 153K. Unemployment in the country remains at 3.6%, the lowest since 1969. Job growth continued in the professional services & health care sectors but was largely flat in the construction, manufacturing, retail & hospitality industries, among others.
Manufacturers, for example, added 3K jobs, while retailers lost about 8K
positions. Average hourly earnings in May rose 6¢ to $27.83, a 3.1% increase year-over-year. The Fri report comes after disappointing growth in private sector jobs
in May. It also comes amid uncertainty for employers over the future of
the US trading relationship with Mexico & China.
US adds 75,000 jobs in May, far less than expected amid heightened trade uncertainty
Wholesale inventories in the US jumped 0.8% in May, the gov said, more than double the the forecast. An increase in inventories adds to GDP. Sales fell 0.4% in the month, however, suggesting companies might have to scale back production if demand fails to rebound. The ratio of inventories to sales rose to 1.34 from 1.33 That's how many months it would take to sell all the inventory on hand. One year ago, the inventory-to-sales ratio was lower at 1.28.
U.S. wholesale inventories jump 0.8% in April, but sales slump
The US & Mexico have made "a lot of progress" in border-security talks in DC, White House economist Kevin Hassett said, just days before tariffs on Mexican goods are set to go into effect. Talks are continuing for a 3rd day in DC. Pres Trump has threatened 5% tariffs on all Mexican imports beginning Mon if the country doesn't stem the flow of Central American migrants to the US border. Mark Short, chief of staff to VP Mike Pence, separately said Trump could turn off the tariff threat over the weekend if talks go well.
White House's Hassett says progress made in Mexico talks
The Dow is up an eye-popping 1.2K this week. However, while stocks are rebounding from oversold conditions, all is not well for this rally. Beyond technical factors, economic indicators are coming in sluggish & safe haven investments of gold & Treasuries are also in a rally mode. That divergence can not last. Hopes for a rate cut in a couple of weeks are already discounted & trade talks are still lumbering along. The bears are not in hiding.
Dow Jones Industrials
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