Dow sank 368, decliners over advancers about 4-1 & NAZ dropped 343. The MLP index fell 1+ to the 224s & the REIT index was off 4+ to the 437s. Junk bond funds drifted lower & Treasuries were sold, raising Treasury yields (more below). Oil rose 2+ to the 119s & gold pulled back 12 to 1858,
AMJ (Alerian MLP index tracking fund)
The US economy continued to see healthy job growth in May, indicating the labor market is still strong despite
growing fears of a recession amid sky-high inflation and an increasingly
aggressive Federal Reserve. Employers
added 390K jobs in May, the Labor Dept reported in its monthly
payroll report, beating the 328K jobs forecast. The unemployment rate, meanwhile, held steady at
3.6%, the lowest level since Feb 2020. Job gains were
broad-based, with the biggest increases in the pandemic-battered leisure & hospitality industry (84K), professional & business services
(75K). & transportation & warehousing (47K). Nearly every
industry gained positions last month, with one notable exception:
Retail, which shed nearly 61K jobs. Businesses are eager to onboard new employees & are raising wages
in order to attract workers as they confront a labor shortage. There
were roughly 11.4M open jobs at the end of Apr – near a record
high – while the number of Americans quitting their job is also
well-above pre-pandemic levels. But
the strong labor market is in part fueling record-high inflation, as Ms of workers are seeing the largest pay gains in years – the
result of companies competing with one another for a limited number of
employees. Earnings rose 5.2% in May from the previous year, much higher
than the pre-pandemic average of 3%. There are signs that growth could
be moderating though, with earnings climbing just 0.3% on a monthly
basis, slower than expected.
US economy sees solid job growth in May as payrolls jump by 390,000
The 10-year Treasury yield rose as investors digested a better-than-expected US jobs report. The yield on the benchmark 10-year Treasury note added 6 basis points to 2.97% & the yield on the benchmark 30-year Treasury bond moved 7 basis points higher to 3.15%. Yields move inversely to prices & 1 basis point is equal to 0.01%. The US economy added 390,000 jobs in May, higher than the forecast of 328K. At the same time, the unemployment rate held at 3.6%, just above the lowest level since 1969. The forecast was had been looking for the unemployment rate to edge lower to 3.5%. Yesterday, Fed Vice Chair Lael Brainard said it's unlikely the central bank will be taking a break from its current rate-hiking cycle any time soon as inflation remained at a 40-year-high.
10-year Treasury yield rises after better-than-expected jobs report
A buildup of inventory across major retailers is cultivating a climate of markdowns, according to a new report. A buildup of inventory across major retailers is cultivating a climate of markdowns, according to a new report. "Inventory levels are high as companies chased as much merchandise as
possible to support demand, which has now slowed. Ultimately, markdowns
and promotions are starting to pick up," the Telsey Advisory Group said
in the research note. For instance, Target (TGT) Chief
Growth Officer Christina Hennington announced during its Q1
earnings call earlier this month that the company faced
"softer-than-expected sales in several categories, resulting in too much
inventory in those areas." The problem was that the "mix of actual demand materialized differently than we had anticipated," Hennington said. While supplies grew, consumer demand "shifted away from bigger, bulkier
products like furniture, TVs and more," Hennington added.
Retail markdowns on the rise stores tackle excess inventory
The jobs report was good & the unemployment continues to show fairly full employment. But that will add pressure for the Fed to fight high inflation by raising interest rates. Investors are nervous & the are selling stocks.
Dow Jones Industrials
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