Dow went up 37, decliners over advancers 4-3 & NAZ gained 40. The MLP index fell to the 196s & the REIT index was fractionally higher to the 447s. Junk bond funds were mixed & Treasuries saw significant buying. Oil slid back to the 74s & gold added 6 to 1783.
AMJ (Alerian MLP index tracking fund)
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US employers added more jobs than expected last month as additional states announced plans to wind down extended unemployment benefits. Nonfarm payrolls increased by 850K workers in Jun as the unemployment rate ticked up to 5.9%, the Labor Dept said. The forecast called for the addition of 700K & the unemployment rate to fall to 5.7%. May's reading was revised higher by 24K jobs to 583K. Sizable job gains were seen in leisure & hospitality (+343K), public & private education (+269K), professional & business services (+72K), retail trade (+67K) & other services (+56K). Industries including construction & healthcare saw little change. The jobs gains came as at least 26 states have ended or announced plans to end the $300 per week supplemental unemployment benefits that are scheduled to expire in Sep. Additionally, average hourly wages in Jun increased 3.6% year over year, helping lure laborers back to work. There were 6.8M (4.4%) fewer workers than in Feb 2020, just before the COVID-19 pandemic caused much of the economy to shut down.
US economy adds 850,000 jobs in June as unemployment rate ticks higher
US consumers continued to spend wildly on new automobiles in Q2, pushing sales up 50.2% over last year despite tight dealer inventories & record high prices. Automakers sold about 4.43M vehicles in Apr-Jun, a figure 0.4% lower than in 2019, the last normal year before the coronavirus pandemic hit. Despite the big jump from a year ago, there were signs that sales were slowing toward the end of the qtr, mostly because dealers had fewer vehicles to sell. A global shortage of computer chips has forced most automakers to cut production. But demand is still high as the coronvirus pandemic wanes & people look to buy vehicles for family road trips. "Unfortunately the chipset and inventory shortages really came to a head and outstripped supply in June," said Edmunds.com director of insights Jessica Caldwell. "This isn't a problem that's going away anytime soon." Consumers desperate for new vehicles often paid over the sticker price, pushing the average sales price in Jun above $40K for the first time, according to JD Power. Automakers cut discounts, but still sold vehicles. On average they had enough inventory to supply only 39 days of sales, down from 93 days a year ago. That means automobiles almost certainly will again be a big part of national price inflation. When new vehicle prices rise, many buyers are chased into the used market & that drives up used vehicle prices, which accounted for 1/3 of a large rise in consumer prices in May. Prices shot up a record 10% in Apr & another 7.3% in May, as inflation spiked 5%, the biggest 12-month increase since 2008. In Q2, General Motors (GM) sales grew 39.7% from a year earlier, while Stellantis (formerly Fiat Chrysler) sales rose 32.2%. Toyota (TM) climbed 73.1% & Nissan fell 68.1%. Ford (F) is scheduled to report sales shortly.
New auto sales, prices rise as chip shortage cuts US supply
Johnson & Johnson's (JNJ), a Dow stock & Dividend Aristocrat, Covid-19
vaccine showed promising signs in a small laboratory study of
protecting against the Delta variant spreading across the US & other
countries, the company said. In laboratory testing, the vaccine triggered strong levels of
neutralizing antibodies in blood samples taken from 8 vaccinated
people, JNJ. The positive performance adds to a
growing set of evidence indicating currently authorized Covid-19
vaccines can safeguard against the Delta variant, which appears to be
more contagious than earlier strains. How well the JNJ shot fares against the Delta variant has been closely watched by health authorities around the world. Many
countries have been counting on supplies, especially because the
vaccine is simpler to ship, handle & store than the shots
from Pfizer (PFE) & its partner BioNTech (BNTX) from Moderna (MRNA). The new findings "reinforce the ability of the Johnson & Johnson
COVID-19 vaccine to help protect the health of people globally," said
JNJ Chief Scientific Officer Paul Stoffels. JNJ also said
its vaccine provides protection against COVID-19 for at least 8
months, the most time that researchers were able to study the shot’s
durability. JNJ stock rose 1.04.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
J&J COVID-19 vaccine shows promising early signs of protecting against Delta variant
Even though it was not a great surprise, the job report looks good. But that raises concerns about the Fed easing up on its efforts to help an ailing economy by raising interest rates & its monthly bond buying program. In addition, the dark cloud of higher inflation looks to be more menacing. Investors will have a lot to think about over the weekend.
Dow Jones Industrials
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