Dow shot up 249 (with the S&P 500 hitting a new record), advancers over decliners better than 3-1 & NAZ gained 72. The MLP index was steady at 216 & the REIT index slid back 1+ to the 411s. Junk bond funds inched higher & Treasuries were weak. Oil went up 1 to the 55s & gold was off only 1 to 1513.
AMJ (Alerian MLP Index tracking fund)
US hiring was unexpectedly solid in Oct, as the economy added 128K jobs, brushing off the weight of the 40-day General Motors (GM) strike. The payroll number far exceeded the estimate of 89K (the lowest forecast in more than 2 years), even with a decline of 42K jobs in motor vehicles & parts manufacturing because of the workers' strike & 20K temporary census workers leaving their jobs. The unemployment rate edged slightly higher to 3.6% as more people were looking for work, but continued to hover near a 50-year low. The labor force participation rate was little changed at 63.3%. Average hourly earnings, meanwhile, rose 3% over the past year to $28.18. The report further alleviates concerns that the US economy is teetering on the brink of a recession & reinforces the Federal Reserve's characterization of the labor market as "strong." It also affirms the central bank's decision to press pause on further interest rate cuts this year, after it voted this week to lower the benchmark federal funds rate for the 3rd time. Food services & drink establishments accounted for the biggest job creation, adding 48K new positions. It was followed by professional & business services, which added 22K jobs & health care which increased by 15K. In another boon to the economy, revisions added 95K jobs for the prior 2 months, bringing the 3-month average to 176K. Pres Trump lauded the report on Twitter, calling it a "blowout" number. "Wow, a blowout JOBS number just out, adjusted for revisions and the General Motor strike, 303,000," he wrote. "This is far greater than expectations. USA ROCKS!"
Commerce Secretary Wilbur Ross said Pres Trump uses unpredictability as a way to get what he wants. It's a "negotiating tool,” Ross said in response to a question about a report that the pres' impulsiveness was making China reluctant to strike a trade agreement with the US. “We wouldn’t have gotten as far as he has now if he were a run-of-the-mill old fashioned in-the-rut type president," Ross added. "That’s not what he is, That’s not why American people elected him. They elected him for what he is. He's willing to take challenges, willing to take on some risk.” A report yesterday, which cited people familiar with the matter, said Beijing was not willing to reach a grand bargain on trade with Trump because of fear he would back out of the deal. It was Beijing, however, that reneged on a deal earlier this year. Trump & Chinese Pres Xi Jinping were scheduled to sign phase one of a trade agreement negotiated since on the sidelines of the Asia-Pacific Economic Cooperation summit in Santiago, Chile, next month, but the conference was canceled due to unrest in the country. Ross says the US & China are still figuring out when and where the 2 leaders will meet. "It was nice having the natural deadline of the Chilean conference, because that made everybody focus on a finite date,” Ross said. “Hopefully we can resurrect a date right in that range 'cause we know there's a gap in President Trump's calendar. We know there's a gap in Pres Xi's. "So the question ought to be where, not when.”
Nothing like an excellent jobs report to bring out buyers for stocks. The S&P 500 is at a new record & the Dow is just below its previous record. Meanwhile the US is looking for another location where it will be able to sign a trade agreement with China. While the US economy is stronger many others, the data keeps coming in choppy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.35 | +1.17 | +2.2% |
| GC=F | Gold | 1,514.10 | -0.70 | -0.1% |
US hiring was unexpectedly solid in Oct, as the economy added 128K jobs, brushing off the weight of the 40-day General Motors (GM) strike. The payroll number far exceeded the estimate of 89K (the lowest forecast in more than 2 years), even with a decline of 42K jobs in motor vehicles & parts manufacturing because of the workers' strike & 20K temporary census workers leaving their jobs. The unemployment rate edged slightly higher to 3.6% as more people were looking for work, but continued to hover near a 50-year low. The labor force participation rate was little changed at 63.3%. Average hourly earnings, meanwhile, rose 3% over the past year to $28.18. The report further alleviates concerns that the US economy is teetering on the brink of a recession & reinforces the Federal Reserve's characterization of the labor market as "strong." It also affirms the central bank's decision to press pause on further interest rate cuts this year, after it voted this week to lower the benchmark federal funds rate for the 3rd time. Food services & drink establishments accounted for the biggest job creation, adding 48K new positions. It was followed by professional & business services, which added 22K jobs & health care which increased by 15K. In another boon to the economy, revisions added 95K jobs for the prior 2 months, bringing the 3-month average to 176K. Pres Trump lauded the report on Twitter, calling it a "blowout" number. "Wow, a blowout JOBS number just out, adjusted for revisions and the General Motor strike, 303,000," he wrote. "This is far greater than expectations. USA ROCKS!"
US crushes Wall Street expectations on jobs despite several challenges
Commerce Secretary Wilbur Ross said Pres Trump uses unpredictability as a way to get what he wants. It's a "negotiating tool,” Ross said in response to a question about a report that the pres' impulsiveness was making China reluctant to strike a trade agreement with the US. “We wouldn’t have gotten as far as he has now if he were a run-of-the-mill old fashioned in-the-rut type president," Ross added. "That’s not what he is, That’s not why American people elected him. They elected him for what he is. He's willing to take challenges, willing to take on some risk.” A report yesterday, which cited people familiar with the matter, said Beijing was not willing to reach a grand bargain on trade with Trump because of fear he would back out of the deal. It was Beijing, however, that reneged on a deal earlier this year. Trump & Chinese Pres Xi Jinping were scheduled to sign phase one of a trade agreement negotiated since on the sidelines of the Asia-Pacific Economic Cooperation summit in Santiago, Chile, next month, but the conference was canceled due to unrest in the country. Ross says the US & China are still figuring out when and where the 2 leaders will meet. "It was nice having the natural deadline of the Chilean conference, because that made everybody focus on a finite date,” Ross said. “Hopefully we can resurrect a date right in that range 'cause we know there's a gap in President Trump's calendar. We know there's a gap in Pres Xi's. "So the question ought to be where, not when.”
Trump uses 'unpredictability' as negotiating tool with China: Wilbur Ross
A gauge of US manufacturing showed the sector
continued to contract in Oct, the 3rd straight month of slowdown
amid global trade uncertainties. The purchasing manufacturing index from the Institute for Supply Management (ISM) came in at 48.3% last month, compared with a 47.8% reading in Sep. But it was below expectations of 49.1%. A number below 50% represents a contraction in the industry. The sector showed its first contraction in a few years in Aug,
ending a 35-month expansion period where the PMI averaged 56.5%,
according to ISM. The manufacturing gauge had its lowest reading since
2009 in Sep as exports dived amid the escalated trade war. The
continuing contraction showed the challenging environment US
manufacturers are faced with amid the escalated trade war between the
US & China. Manufacturing was once considered a big winner under the
Trump administration with improvements in employment & activity over
the past few years. “Comments from the panel reflect an
improvement from the prior month, but sentiment remains more cautious
than optimistic,” Timothy Fiore, chair of the ISM Manufacturing Business
Survey Committee, said. The production index was
only 46.2% in Oct, compared to the Sep reading of 47.3%. The
backlog of orders index was 44.1%, contracting for the 6th straight
month, versus the Sep reading of 45.1%. Prices
decreased for the 5th consecutive month & at a faster rate with the
prices index registered 45.5% in Oct. New orders, employment,
inventories & new export orders showed improvement last month. “Inputs
— expressed as supplier deliveries, inventories and imports — were
again lower in October, due primarily to supplier delivery contraction
offset by improvements in inventories,” Fiore added. However, the
latest report also showed signs of recovery, making some traders
believe the manufacturing slowdown won't be accelerating.
Nothing like an excellent jobs report to bring out buyers for stocks. The S&P 500 is at a new record & the Dow is just below its previous record. Meanwhile the US is looking for another location where it will be able to sign a trade agreement with China. While the US economy is stronger many others, the data keeps coming in choppy.
Dow Jones Industrials
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