Dow rose 135, advancers slightly ahead of decliners & NAZ slid back 80. The MLP index went up 3 to the 167s & the REIT index fell 2+ to the 377s. Junk bond funds slid lower & Treasuries were sold, taking the yiield on the 10 year treasury up 6 basis points to 1.48%. Oil jumped 1+ to the 61s & gold sank 14 to 1719.
AMJ (Alerian MLP index tracking fund)
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US private employers added fewer jobs than expected in Feb, even as the number of COVID-19 cases nationwide eased & state govs lifted some lockdown measures implemented to curb the spread of the virus, according to the ADP National Employment Report. The report showed that companies added 117K jobs last month, missing the 177K-job increase that was predicted. “The labor market continues to post a sluggish recovery across the board,” Nela Richardson, chief economist at ADP, said. “We’re seeing large-sized companies increasingly feeling the effects of COVID-19, while job growth in the goods-producing sector pauses.” The job gains were concentrated heavily in services-related businesses, which accounted for 131K of the total increase. Trade, transportation & utilities led those businesses with 48K new jobs created, while education & health services added 35K positions. The leisure & hospitality industry, one of the hardest hit by the pandemic, saw its payroll increase by 26K last month. "With the pandemic still in the driver’s seat, the service sector remains well below its pre-pandemic levels," Richardson added. "However, this sector is one that will likely benefit the most over time with reopenings and increased consumer confidence." Medium-sized businesses that employ 50-499 employees saw the most growth last month, with 57K jobs created. Small businesses, meanwhile, added 32K positions, while large businesses' payroll increased by 28K. In total, the US has recovered roughly ½ of the 22M jobs lost during the first 2 months of the pandemic. There are still about 9.9M more Americans out of work than there were a year ago in Feb before the crisis began.
ADP report shows private companies added 117,000 jobs in February
Asset prices are elevated more than they have been historically, but that is not something that should drive the Federal Reserve policy decisions, a top central banker said. Instead, elevated asset prices remain “something to watch,” said San Francisco Federal Reserve Pres Mary Daly, in a discussion with reporters. Daly said she doesn't trace stock-market moves back directly to US monetary policy because stock investors are reacting to all types of news. On Mon, China's top banking regulator said financial markets are trading at high levels in Europe, the US & other developed countries, “which runs counter to the real economy” & corrections could come “sooner or later.” Asked about a sharp fall in prices of longer-term Treasurys & the rise in yields, Daly said that investors are pricing in a brighter future. In her speech, Daly said she thought any market concern about an undesirable pickup in inflation was “the tug of fear” about the 1970s & 1980s when inflation pressures exploded & the Fed raised interest rates sharply, resulting in a deep recession. “But that was more than three decades ago and times have changed,” Daly added. “Today, the costs are tilted the other way. Running inflation too low for too long can pull down inflation expectations, reduce policy space and leave millions of Americans on the sidelines along the way,” Daly continued. She said market participants understand the Fed isn't going to stop inflation until it gets to 2%. “I see this as a real indication we don’t have a 2% ceiling,” she added. “It is very clear that we’re not going to react at the first hint that inflation might have breached the 2% goal,” she said. Some investors have worried the Fed might not realize how strong inflation could rebound this year.
Fed’s Daly says asset prices are elevated, but that should not drive interest-rate decisions
The Energy Information Administration (EIA) reported
that US crude inventories jumped up by 21.6M barrels last
week. The forecast callled for a climb of 1.3M
barrels. The American Petroleum Institute
reported a nearly 7.4M-barrel climb, according to sources. The
EIA data also showed crude stocks at the Cushing, Okla., storage hub
rose by 500K barrels for the week. However, petroleum-product stocks
dropped as frigid temperatures in mid-Feb led to a slowdown in
Texas refinery activity. The EIA reported that gasoline supply was down
13.6M barrels, while distillate stockpiles were down 9.7M
barrels for the week. The survey had forecast
supply declines of 2.9M barrels for gasoline & 3.9M
barrels for distillate inventories. Apr West Texas Intermediate crude held onto the bulk of their gains, trading up $1.08 (1.8%) at
$60.83 a barrel.
EIA reports a more than 21 million-barrel weekly rise in U.S. crude supplies
Stocks are back to stumbling around. The economy is doing reasonably well although today's jobs report was disappointing as high unemployment keeps dragging on. And the rise in bond yields is worrisome.
Dow Jones Industrials
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