Dow went up 146, advancers over decliners 5-1 & NAZ gained 116. The MLP index was off 1+ to 251 & the REIT index jumped 8+ to 349 on lower interest rates. Junk bond funds remained in demand as yields declined & Treasuries saw very heavy buying, sharply reducing yields (more below). Oil pulled back 1+ to the 81s & gold rose 8 to 2002.
AMJ (Alerian MLP Index tracking fund)
US job growth slowed more than expected in Oct, a sign the labor market is finally softening in the face of higher interest rates, stubborn inflation & other economic uncertainties. Employers added 150K jobs in Oct, the Labor Dept said in its monthly payroll report, missing the 180K jobs forecast. The unemployment rate, meanwhile, unexpectedly ticked up to 3.9%, the highest level in nearly 2 years. The pickup in the jobless rate suggests that layoffs are on the rise; the survey of households shows that the number of workers laid off rose in Oct by 92K from the previous month. The report also contained steep downward revisions to job growth at the end of the summer. Gains for Aug & Sep were revised down by a total of 101K jobs to a respective 165K & 297K, suggesting that the labor market is weaker than it previously appeared. "Winter cooling is hitting the labor market," said Becky Frankiewicz, chief commercial officer of ManpowerGroup. "Employers and employees are hunkering down for cooler months with hiring solid yet stabilizing." The Federal Reserve has signaled it is closely watching the report for evidence the labor market is finally cooling after more than a year of interest rate hikes. Policymakers voted this week to leave their benchmark rate unchanged for a 2nd straight time in order to assess the cumulative impact of previous increases. Many economists have suggested the Fed is done with its tightening campaign, although Chair Jerome Powell warned that any "tightness in the labor market" could be reason for concern. Traders reduced the odds of further rate increases in the coming months after the report pointed to a deceleration in hiring last month.
US job growth cools in October as unemployment rate ticks higher
Treasury yields pulled back after key employment data came in cooler than anticipated. The yield on the 2-year Treasury slid by more than 8 basis points to 4.887% & the 10-year Treasury yield was down by 13 basis point to 4.539%. Throughout the week, the
benchmark Treasury yield has come off recent highs that at times saw it
trade above the 5% mark. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Nonfarm payrolls increased by 150K in Oct, while the forecast expected an
increase of 170K. The unemployment rate rose to 3.9%, slightly
higher than the steady 3.8% forecast. Meanwhile, average hourly
earnings increased 0.2% on the month. Hourly earnings, a key measure for
the expected direction of inflation, were expected to
climb 0.3% month over month. The data comes after ADP reported earlier this week that private sector payrolls increased by 113K in Oct, which marked an increase from the previous month but was lower than expected. Investors
have been looking for data suggesting an easing of the jobs market. That's because it can indicate that the Federal Reserve's monetary
policy approach of hiking interest rates is having the desired effect.
Treasury yields tumble after October payrolls report misses expectations
Starbucks
(SBUX) presented the latest stage in its plan to drive growth for the
company, which involves accelerating its global footprint & saving $3B in costs over the next 3 years. The company plans to expand to 35K locations outside of North America by 2030. SBUX currently has roughly 20K intl cafes, as of Oct.1. In total, it aims to reach 55K locations globally by
2030, up from its current count of more than 38K. “Three
out of every four new stores over the near term is expected to be
opened outside of the U.S. as our store portfolio becomes increasingly
global,” Michael Conway, pres of the intl &
channel development divisions, said. SBUX
also announced a $3B cost-savings plan. Execs said $1B of those savings will come from making its stores more
efficient. The rest will come from saving on its cost of goods sold. The company reported
its fiscal 4th-qtr results. The company beat estimates for both its quarterly earnings & revenue. CEO Laxman Narasimhan said the company's “reinvention” plan
unveiled last Sep is moving ahead of schedule, driving both sales & efficiency. For example, the chain's new single-cup
drip coffee brewer is now installed in more than 600 locations. The stock rose 2.49.
If you would like to learn more about SBUX, click on this link:
club.ino.com/trend/analysis/stock/SBUX_aid=CD3289&a_bid=6aeoso5b6f7
Much of the good news was priced into the markets on expectations during yesterday's big advance. Dow is a smidgen under 34K & traders are hoping to take it over that level shortly.
Dow Jones Industrials
No comments:
Post a Comment