Dow shot up 227, advancers over decliners about 3-1 & NAZ added 2 & is sliding lower in recent trading. The MLP index rose 4+ to the 2090s & the REIT index went up 1+ to the 416s (near record territory. Junk bond funds inched higher & Treasuries were sold bringing higher yields again. Oil recovered 2 to the 51s & gold rebounded 6 to 1562.
AMJ (Alerian MLP Index tracking fund)
Stocks opened at or near record highs after a report indicated a coronavirus vaccine could come sooner than expected. A UK researcher said a breakthrough has been made that cut the development time for a vaccine from 2-3 years to 14 days, Sky News reported. The coronavirus outbreak has sickened more than 24K & killed 490, according to figures released yesterday by China's National Health Commission. Also helping the major averages was the blowout ADP Employment Report, which showed the private sector added 291K jobs in Jan, easily exceeding the 156K jobs that was expected. The early gains have the NAZ trading in record territory while the S&P 500 & Dow trade just below their own all-time highs. Commodities were higher with West Texas Intermediate crude oil surging 2.5% to $50.85 a barrel & gold up 0.2% to near $1558 an ounce. Treasuries were weaker, causing the yield on the 10-year note to climb by 4.8 basis points to 1.649%. In Europe, Germany's DAX paced the gains, up 1.4%, while France's CAC & Britain's FTSE were higher by 1% & 0.6%, respectively. Markets rallied across Asia, with China's Shanghai Composite gaining 1.3%, Japan's Nikkei climbing 1% & Hong Kong's Hang Seng adding 0.4%.
Private employers added 291K jobs in Jan, soaring past expectations for the best monthly gain in more than 5 years, according to the latest ADP National Employment Report. The total far exceeded the 156K jobs that economists were expecting "Mild winter weather provided a significant boost to the January employment gain," Moody's chief economist Mark Zandi said. "The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs." Growth was spread across a swath of sectors, boosted by the services-providing sector, which accounted for 237K new positions created last month, while the goods-producing sector added 54K. In particular, construction posted a 47K bounce, the best monthly gain since Apr. The manufacturing sector expanded its payroll by 10K. Education & health services also accounted for 70K jobs, while the leisure & hospitality sector added 96K to the total number. Leisure & hospitality & construction are among the most sensitive industries to weather, Zandi said. "My guess is that extracting from the vagaries of this data, and it goes beyond weather, underlying job growth is probably somewhere around half the size of the January gain, probably around 150,000 jobs." That estimate, he said, is stable enough to maintain a record-low level of unemployment. The report included a slight downward revision in Dec numbers. The ADP Research Institute said the private sector added 199K 2 months ago, down from the 202K jobs initially reported. The data precedes the release of more closely watched update from the Labor Dept on Fri, which is expected to show the US economy added 160K jobs last month. Analysts anticipate unemployment will hold steady at 3.5%, a ½-century low. In Dec, the US added a slightly lower-than-expected strong 145K jobs.
Total cases: More than 24K as of today.
Total deaths: At least 490 worldwide as of today.
Adidas confirmed that it has closed a significant number of stores in China because of the coronavirus. The company is currently operating less than 500 stores in China, 4% of the 12K locations it has there, including franchise stores. The company said it is too early to assess the magnitude of the virus' impact. Singapore's health ministry confirmed 4 more coronavirus cases, including a 6-month-old baby. Both parents of the infant, a Singapore citizen, have also been infected, the ministry said. Yesterday, Singapore reported its first cases of citizens & residents who had contracted the virus without recent travel to China, where the outbreak first surfaced in late Dec. Michael Kors owner Capri Holdings said it has taken a $100M hit to revenue because of the coronavirus. Capri closed 150 of its 225 stores in mainland China & has seen a significantly drop in foot traffic. The company warned that travel restrictions on visitors from China could also put pressure on sales in other regions. “This is going to be a very tough period for luxury brands,” said the China Market Research Group in Shanghai. “There is going to be a negative long-term effect as well, as many corporate offices are shut down or barely functioning and this is a key time period for planning future seasons.”
Coronavirus live updates: Singapore confirms infant with virus, ECB chief warns of uncertainty
US services sector growth picks up in January
Stocks are benefiting on hopes for coronavirues treatments. Sounds good but technology breakthroughs takes to time to implement. The Jan data above also is encouraging for investors. The Volatility Index (VIX) is close to the mid teen levels during rally times in this multi year rally. The Dow is about 300 away from its recent record highs.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 51.39 | +1.78 | +3.6% |
| GC=F | Gold | 1,558.10 | +2.60 | +0.2% |
Stocks opened at or near record highs after a report indicated a coronavirus vaccine could come sooner than expected. A UK researcher said a breakthrough has been made that cut the development time for a vaccine from 2-3 years to 14 days, Sky News reported. The coronavirus outbreak has sickened more than 24K & killed 490, according to figures released yesterday by China's National Health Commission. Also helping the major averages was the blowout ADP Employment Report, which showed the private sector added 291K jobs in Jan, easily exceeding the 156K jobs that was expected. The early gains have the NAZ trading in record territory while the S&P 500 & Dow trade just below their own all-time highs. Commodities were higher with West Texas Intermediate crude oil surging 2.5% to $50.85 a barrel & gold up 0.2% to near $1558 an ounce. Treasuries were weaker, causing the yield on the 10-year note to climb by 4.8 basis points to 1.649%. In Europe, Germany's DAX paced the gains, up 1.4%, while France's CAC & Britain's FTSE were higher by 1% & 0.6%, respectively. Markets rallied across Asia, with China's Shanghai Composite gaining 1.3%, Japan's Nikkei climbing 1% & Hong Kong's Hang Seng adding 0.4%.
Stocks surge toward records on coronavirus breakthrough report, blowout jobs numbers
Private employers added 291K jobs in Jan, soaring past expectations for the best monthly gain in more than 5 years, according to the latest ADP National Employment Report. The total far exceeded the 156K jobs that economists were expecting "Mild winter weather provided a significant boost to the January employment gain," Moody's chief economist Mark Zandi said. "The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs." Growth was spread across a swath of sectors, boosted by the services-providing sector, which accounted for 237K new positions created last month, while the goods-producing sector added 54K. In particular, construction posted a 47K bounce, the best monthly gain since Apr. The manufacturing sector expanded its payroll by 10K. Education & health services also accounted for 70K jobs, while the leisure & hospitality sector added 96K to the total number. Leisure & hospitality & construction are among the most sensitive industries to weather, Zandi said. "My guess is that extracting from the vagaries of this data, and it goes beyond weather, underlying job growth is probably somewhere around half the size of the January gain, probably around 150,000 jobs." That estimate, he said, is stable enough to maintain a record-low level of unemployment. The report included a slight downward revision in Dec numbers. The ADP Research Institute said the private sector added 199K 2 months ago, down from the 202K jobs initially reported. The data precedes the release of more closely watched update from the Labor Dept on Fri, which is expected to show the US economy added 160K jobs last month. Analysts anticipate unemployment will hold steady at 3.5%, a ½-century low. In Dec, the US added a slightly lower-than-expected strong 145K jobs.
Private sector jobs added in January blow past economists' expectations
Total cases: More than 24K as of today.
Total deaths: At least 490 worldwide as of today.
Adidas confirmed that it has closed a significant number of stores in China because of the coronavirus. The company is currently operating less than 500 stores in China, 4% of the 12K locations it has there, including franchise stores. The company said it is too early to assess the magnitude of the virus' impact. Singapore's health ministry confirmed 4 more coronavirus cases, including a 6-month-old baby. Both parents of the infant, a Singapore citizen, have also been infected, the ministry said. Yesterday, Singapore reported its first cases of citizens & residents who had contracted the virus without recent travel to China, where the outbreak first surfaced in late Dec. Michael Kors owner Capri Holdings said it has taken a $100M hit to revenue because of the coronavirus. Capri closed 150 of its 225 stores in mainland China & has seen a significantly drop in foot traffic. The company warned that travel restrictions on visitors from China could also put pressure on sales in other regions. “This is going to be a very tough period for luxury brands,” said the China Market Research Group in Shanghai. “There is going to be a negative long-term effect as well, as many corporate offices are shut down or barely functioning and this is a key time period for planning future seasons.”
Coronavirus live updates: Singapore confirms infant with virus, ECB chief warns of uncertainty
US services sector activity picked up in
Jan, with industries reporting increases in new orders, suggesting
the economy could continue to grow moderately this year even as consumer
spending is slowing. The Institute for Supply Management (ISM)
said its non-manufacturing activity index increased to a
reading of 55.5 last month, the highest level since Aug. Data for
Dec was revised slightly down to show the index at a reading of
54.9 instead of the previously reported 55.0. A
reading above 50 indicates expansion in the services sector, which
accounts for more than 2/3 of US economic activity. The forecast the index was for unchanged at a reading of 55.0
in Jan. The report came on the heels of a survey from the ISM
on Mon showing manufacturing rebounded in Jan after contracting
for 5 straight months. The improvement in manufacturing, which
accounts for 11% of the economy, reflected easing tensions in the
19-month US.-China trade war. Any recovery in manufacturing,
however, is likely to be limited by Boeing's (BA), a Dow stock, suspension last month of
the production of its troubled 737 MAX jetliner, grounded last Mar
following 2 fatal crashes. The coronavirus, which has killed hundreds
in China & infected thousands globally, is expected to disrupt supply
chains, especially for electronics producers. The economy grew 2.3% last year, the slowest since 2016, after expanding 2.9% in 2018. The
ISM survey's measure of new orders for the services industry increased
to a reading of 56.2 in Jan from 55.3 in Dec. Order backlogs,
however, continued to contract in Jan, which could curb growth in
the services sector. The
survey’s index for services industry employment slipped to a reading of
53.1 last month from 54.8 in Dec. This is in line with slowing job
growth, both as workers become more scarce & demand for labor cools. The
economy created 2.1M jobs in 2019, the least since 2011 & down
from 2.7M in 2018. Growth in consumer spending slowed
considerably in the final 3 months of 2019.
US services sector growth picks up in January
Stocks are benefiting on hopes for coronavirues treatments. Sounds good but technology breakthroughs takes to time to implement. The Jan data above also is encouraging for investors. The Volatility Index (VIX) is close to the mid teen levels during rally times in this multi year rally. The Dow is about 300 away from its recent record highs.
Dow Jones Industrials
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