Dow pulled back 60, advancers over decliners 3-2 & NAZ went up 22. The MLP index dipped 1+ to the 218s & the REIT index was steady in the 364s. Junk bond funds did little & Treasuries saw more buying which reduced yields, Oil dropped another 3 to the 68s on demand worries & gold rose 7 to 2030, near its record highs.
AMJ (Alerian MLP Index tracking fund)
Hiring by US companies roared back to life in Apr, defying expectations for a sharp slowdown in the labor market as a result of higher interest rates, according to the ADP National Employment Report. Companies added 296K jobs last month, easily beating the 148K gain that was predicted & the revised 142K figure recorded last month. It marked the highest monthly increase since last Jul. The report comes as the Federal Reserve wages the most aggressive fight since the 1980s to crush inflation & slow the labor market with a series of rapid interest rate increases. Fed policymakers have made it clear that they anticipate unemployment to climb as a result of higher borrowing costs, which could force consumers & businesses to pull back on spending. In a potentially welcoming sign for the Fed as it tries to wrangle inflation under control, wages cooled at a faster pace in Apr for both workers who stayed in their jobs & who left. Annual pay rose 6.7% in Apr, down from 6.9% in Mar. "The slowdown in pay growth gives the clearest signal of what's going on in the labor market right now," said Nela Richardson, chief economist at ADP. "Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines. Our data also shows fewer people are switching jobs." The bulk of the gains in Apr stemmed from the leisure & hospitality industry, which added 154K new workers. Other industries that saw payroll growth last month included education & health services (69K), construction (5K), natural resources & mining (52K), & trade, transportation & utilities (32K). The biggest losses, meanwhile, were concentrated in the manufacturing sector, which saw payrolls tumble by 38K. Financial activities also shed 28K positions, while professional & business services cut 16K.
Private sector job growth unexpectedly jumps to 296,000
The Commerce Dept kicked off SelectUSA today for the annual event that brings investors, startups, & local leaders together as startups in America hit an all-time high. Secretary Gina Raimondo opened the conference by telling startups & business leaders that America was the best country to invest in. "We have mayors here. We have ambassadors here. We have problem solvers here who want to work with you," said Raimondo to businesses in attendance. According to data & the highest of any year on record. Sherman Baldwin, CEO of LCR Capital, said it's America's acceptance & protection against failure makes the US a desirable place for startups. "I think it's critical that failure is an event. It's not a prognosis," he said. "Jobs are created when capital is put at risk. And that's what entrepreneurs do. That's what venture capital firms do. That is what creates value and what creates jobs and what attracts people to the United States." LCR Capital works with investors around the world looking to invest in the US. They are an attendee at SelectUSA this year. Baldwin said his company looks at both the quality of the person & the quality of the idea when deciding to invest. He added that immigrant communities have been essential to continued competitiveness in America. He added that over ½ of the "unicorns," a privately held startup valued over $1B, that came out of Silicon Valley over the last 20 years were founded by immigrants. "The key to success, in my opinion, is to be able to continue to attract the best and the brightest from around the world," he added.
Startups in the U.S. boom
Many Americans have shrugged off rising costs & interest rates &
said that 2023 is the year to buy a home, according to a recent TD Bank survey. Among
respondents looking to purchase a home for the first time in 2023, 39%
said now is a good time to buy & 48% have already begun saving for
their down payment. However,
the optimism comes mixed with some reservations, with 69% of
respondents concerned over where the economy is headed & 64% worried
about how rising mortgage rates may impact affordability. "Even as rates have risen in comparison to the
historically low-interest rate environment many experienced in the past
two years, buyers see the importance of building equity in a home
purchase," TD Bank Head of US Residential Lending Steve Kaminski said. "Homeownership has and continues to be a sustainable way
to build intergenerational wealth, while providing the added benefit of
shoring up a buyers' financial position over the long-term." Mortgage rates have shifted down over
the past 5 weeks but remain considerably higher than they were a
year ago. It is likely, however, that as the Federal Reserve continues to raise interest rates
to keep to its goal to bring inflation to a 2% target rate, mortgage
rates will continue to fluctuate in the 6-7% range it has been for
the past 8 months, according to Keeping Current Matters Chief
Economist, George Ratiu. "While rates are still considerably
higher than a year ago, markets are beginning to adjust to the new
normal," Ratiu added. "Rates have spent the past 12 months
mostly above 5%, making today's levels more acceptable and lessening
some of the initial shock consumers experienced in 2022." When it came to the valuing importance of buying a home, 85% of the
survey respondents said that it was a good long-term investment.
Many Americans still optimistic about homebuying despite tough economic backdrop: TD Bank
There is not much to do until the Fed speaks later.
Dow Jones Industrials
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