Dow jumped up 133, advancers over decliners 4-3 & NAZ added 40. The MLP index edged higher, going over 230, & the REIT index went up 1+ to 409. Junk bond funds were little changed & Treasuries had modest gains. Oil crawled higher in the 52s & gold was off 1 to 1512.
AMJ (Alerian MLP Index tracking fund)
Stocks opened higher after the Sep jobs report showed the US unemployment rate fell to a 50-year low. The US economy added 136K jobs in Sep as the unemployment rate fell to 3.5%, its lowest since 1969, the Bureau of Labor Statistics said. The forecast called for the economy to have added 145K jobs as the unemployment rate held at 3.7K. All 3 of the major indices were higher. In Europe, the major averages were little changed & Asian stocks were mixed. Tokyo's Nikkei ended the day up 0.3%, but fell 2.1% for the week. Hong Kong's Hang Seng closed down 1.1% & down 0.5% for the week. Chinese markets will reopen on Mon after being closed most of the week in observance of the Golden Week holiday.
Unemployment hit a fresh 50-year low in Sep even though nonfarm payrolls rose by just 136K as the economy nears full employment, the Labor Dept reported. Also, the jobless rate for Hispanics also hit a new record low, while the level for African Americans maintained its lowest ever. At the same time, the economy saw another sluggish month of growth. The nonfarm payrolls count missed the 145K estimate from economists surveyed by Dow Jones; the expectation on the jobless rate was to hold steady at 3.7%. Wages also were a disappointment, with average hourly earnings little changed over the month & up just 2.9% for the year, the lowest increase since Jul 2018. The report comes amid uncertain times for the economy, with fears escalating that weakness abroad will bleed into the US & possibly cause a recession. Readings earlier in the week showed continued contraction in manufacturing & a sharp decline in the much larger services industry.
September unemployment rate falls to 3.5%, a 50-year low, as payrolls rise by 136,000
Trade gap widens more than expected to $54.9 billion
Kudlow says there could be some ‘positive surprises’ out of next week’s China trade talks
Traders liked the jobs report, although it was less than spectacular because the negatives were kept to a minimum. The unemployment data looks good but manufacturing & service data led to a slowdown in job growth. All is not well in the US economy. The trade gap news was also not encouraging. The Dow is 1K below its recent record as China trade talks resume next week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 53.27 | +0.82 | +1.6% |
| GC=F | Gold | 1,505.90 | -7.90 | -0.5% |
Stocks opened higher after the Sep jobs report showed the US unemployment rate fell to a 50-year low. The US economy added 136K jobs in Sep as the unemployment rate fell to 3.5%, its lowest since 1969, the Bureau of Labor Statistics said. The forecast called for the economy to have added 145K jobs as the unemployment rate held at 3.7K. All 3 of the major indices were higher. In Europe, the major averages were little changed & Asian stocks were mixed. Tokyo's Nikkei ended the day up 0.3%, but fell 2.1% for the week. Hong Kong's Hang Seng closed down 1.1% & down 0.5% for the week. Chinese markets will reopen on Mon after being closed most of the week in observance of the Golden Week holiday.
Stocks jump after unemployment rate slides to 50-year low
Unemployment hit a fresh 50-year low in Sep even though nonfarm payrolls rose by just 136K as the economy nears full employment, the Labor Dept reported. Also, the jobless rate for Hispanics also hit a new record low, while the level for African Americans maintained its lowest ever. At the same time, the economy saw another sluggish month of growth. The nonfarm payrolls count missed the 145K estimate from economists surveyed by Dow Jones; the expectation on the jobless rate was to hold steady at 3.7%. Wages also were a disappointment, with average hourly earnings little changed over the month & up just 2.9% for the year, the lowest increase since Jul 2018. The report comes amid uncertain times for the economy, with fears escalating that weakness abroad will bleed into the US & possibly cause a recession. Readings earlier in the week showed continued contraction in manufacturing & a sharp decline in the much larger services industry.
September unemployment rate falls to 3.5%, a 50-year low, as payrolls rise by 136,000
The US trade deficit widened more than expected
in Aug thanks in part to a record level of imports of consumer goods & as a fresh round of tariffs loom against China & the EU. The imbalance stood at $54.9 B, more than the $54.5B estimate & up from $54B in Jul. Imports
rose to $262.8B against estimates of $261.4B, while
exports increased to $207.9B, which also beat expectations of
$207.4B. Consumer goods imports hit $57.2B, a
reflection of increased demand as a healthy shopping appetite helps keep
the US economy afloat amid fears of a slowdown. Even as the
overall deficit rose, the gap with China declined sharply, falling 3.1%
for the month. On a year-over-year basis, the shortfall with China is
$231.6B, an 11.4% decline from the same period in 2018. The deficit with Germany swelled to $7.1B, the highest on record thanks to $12.1B of imports, also a record. With additional tariffs about to take effect against the EU, the trade gap also closed across much the region. The
EU deficit fell 23.7% from Aug though it is up 8.1% from a year ago.
The US also is threatening to add duties against the $300B of
Chinese goods not already subject to tariffs. On a goods basis,
auto exports grew $14.3B & hit their highest level since 2014. The petroleum deficit of $300M was the lowest on record. Exports of capital goods, though, hit $44.3B, the lowest since Oct 2017.
Trade gap widens more than expected to $54.9 billion
White House economic advisor Larry Kudlow said “positive surprises” could emerge from the trade talks between
the US & China next week in DC. “There could be
positive surprises coming out of these talks,” Kudlow said on TV. “I’m not predicting. I’m just
saying don’t rule that out. There could be some positive surprises.” “Coming into this, China has been buying some commodities. A small amount, but perhaps a good sign,” Kudlow added. Trade
negotiators from the US & China are set to resume principal-level
trade negotiations on Oct 10 in DC. Tensions have risen recently
as reports revealed Trump administration officials are deliberating ways to limit US investors' portfolio flows into China, including
delisting Chinese companies from American stock exchanges. White House
trade policy director Peter Navarro denied the reports however, calling
them “fake news.” Pres Trump yesterday called on China to look into former
VP Joe Biden, the front-runner for the 2020 Dem
presidential nomination, & his son Hunter, after House Dems
launched an impeachment probe into him last week. “I haven’t
spoken the president on that but it doesn’t really sound like it’s going
to have much of an impact if anything on the China trade talks,” Kudlow
said of Trump's call for China to investigate the Bidens. However,
Kudlow said the US strong support of Hong Kong's protests for
democracy could have a negative impact on the China trade talks. “I
do know we continue to monitor the Hong Kong freedom and democracy
movement, which the U.S. supports very strongly. That could impinge the
talks,” Kudlow added. Hundreds of Ks of protesters have
taken to Hong Kong’s streets since early Jun, originally due to
opposition to an extradition law that would have allowed people in the
city to be removed to mainland China. The protests demonstrate the large
discontent the people have for the city's gov.
Kudlow says there could be some ‘positive surprises’ out of next week’s China trade talks
Traders liked the jobs report, although it was less than spectacular because the negatives were kept to a minimum. The unemployment data looks good but manufacturing & service data led to a slowdown in job growth. All is not well in the US economy. The trade gap news was also not encouraging. The Dow is 1K below its recent record as China trade talks resume next week.
Dow Jones Industrials
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