Dow went up 122, advancers modestly ahead of decliners & NAZ added 126. The MLP index was up 1+ to 230 & the REIT index added 1+ to the 389s. Junk bond funds were little changed & Treasuries had limited buying, lowering yields slightly (more below). Oil slid lower in the 79s & gold inched up 1 to 1856.
AMJ (Alerian MLP Index tracking fund)
US hiring roared back to life in Jan as the labor market
remained surprisingly resilient in the face of higher interest rates,
scorching-hot inflation & mounting recession fears. Employers added 517K jobs
in Jan, the Labor Dept said in its monthly payroll
report, easily topping the 185K jobs forecast. It marked the best month for job creation since
Jul. The unemployment rate, meanwhile, unexpectedly dropped to 3.4%, the lowest level since 1969. Stocks fell following the better-than-expected report as the stunningly strong data dashed investor hopes that the Federal Reserve will soon pause its aggressive interest-rate hike campaign. Job gains were broad-based in Jan, with leisure & hospitality
leading the way in hiring, adding 128K new workers. That was followed
by employment in professional & business services (82K),
gov (74K), health care (58K) & retail (30K). Wages also posted solid growth last month. Average hourly earnings rose
0.3%, in line with expectations & are up 4.4% from a year ago. While monthly jobs data is always important, the Fed has been closely
watching the reports for signs the labor market is moderation – back to 2%.
US hiring roared back to life as job growth unexpectedly surged
Treasury yields fell as investors looked ahead to key data releases & comments from Federal Reserve Chair Jerome Powell due this week. The yield on the 10-year Treasury was last down about 2 basis points to 3.944%. It had crossed the 4% mark on several days last week. The 2-year Treasury yield was flat at 4.863%. Yields & prices move in opposite directions & one basis point is equivalent to 0.01%. Investors weighed the outlook for monetary policy & the state of the economy, including inflationary developments, ahead of a series of data releases slated for the week. That includes JOLTs job openings data tomorrow & Feb's non farm payroll & unemployment report on Fri. The labor market is one of the key areas of the economy that the Fed has been trying to cool thru policy measures such as interest rate hikes. The new figures could therefore provide hints about the impact of the central bank's monetary policy. In recent weeks, various Fed officials have indicated that the battle with inflation is not yet over & further interest rate hikes are likely necessary to cool pressures from rising prices. The central bank's next rate decision is expected at the conclusion of its upcoming meeting on Mar 21-22.
Treasury yields fall as investors anticipate economic data, Fed chair remarks
China's Ministry of Finance set its growth target to 5%, marking the lowest expectation in more than 25 years. The modest target reflects China coming to grips with reality after falling well short of its 5.5% growth target in 2022, with the country only reaching 3%. The new growth target comes after China finally abandoned Xi's "zero-COVID" policies, which saw widespread lockdowns & quarantines for Chinese workers. Chinese citizens chaffed under the lockdowns & many workers took to the streets in protest in late 2022, leading to more relaxed policies. China's modest expectations for its economy come in contrast to its growing military budget, which received a 7.2% increase this year. The budget now sits at $230B, up nearly $16B from its total in 2022. Its budget increase follows a year of unprecedented tension between China, & the US & Taiwan. CIA Director William Burns stated last month that Chinese Pres Xi Jinping has ordered his military to be ready to invade Taiwan by 2027.
China struggles as it tries to recover from aggressive lockdowns
On the one hand job growth is good for the economy. But on the other hand, the Fed still has to work to lower inflation. It's interesting that even China is feeling the effects of the global economic slowdown.
Dow Jones Industrials
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