A REASSURING JOBS REPORT

A jittery Wall Street liked the big picture it saw in the Labor Department’s May employment report. The economy added 175,000 jobs last month: decent hiring growth, not dismaying to investors, yet not impressive enough to signal the Federal Reserve to taper off QE3. Economists polled by Bloomberg forecast payrolls rising by 163,000. The jobless rate ticked up to 7.6% in May as more people started looking for work; the private sector hired 178,000 new employees and the number of discouraged job seekers hit a 52-month low. The Dow had its best day since January on Friday, rising 207.50 in response.1,2

FACTORY ACTIVITY CONTRACTS IN MAY

That was the message sent by the Institute for Supply Management’s latest manufacturing PMI. The May reading dropped 1.7 points to 49.0%. On the other hand, the ISM service sector PMI rose 0.6 points in May to 53.7.3

FED BEIGE BOOK HINTS AT SLOWER GROWTH

The central bank’s latest anecdotal survey of businesses, lenders and other segments of the private sector noted “modest to moderate” economic expansion, as opposed to the “moderate” growth referenced in the previous edition. It did report a “moderate to strong pace” of expansion in the real estate sector.4

STOCKS RISE, 10-YEAR TIPS REAL YIELD GOES POSITIVE

Volatility didn’t stop stocks from advancing last week – the Dow rose 0.88% to 15,248.12, the NASDAQ 0.38% to 3,469.22 and the S&P 500 0.78% to 1,643.38. NYMEX crude soared 4.4% for the week to settle at $96.03 Friday. Another factoid of interest: the real yield of the 10-year note went into positive territory this week for the first time since January 23, 2012.2,5,6

THIS WEEK:

The data stream looks to be fairly light this week. Monday offers earnings reports from Lululemon, Pep Boys and Annie’s. Nothing major is scheduled for Tuesday. Men’s Wearhouse and H&R Block announce quarterly results on Wednesday. Thursday, the Census Bureau provides its May retail sales report, Casey’s General Store reports earnings, and the latest initial jobless claims figures arrive. Friday sees the release of May’s Producer Price Index, the Federal Reserve’s report on May industrial output and the University of Michigan’s preliminary June consumer sentiment survey.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+16.36

+22.37

+4.98

+6.82

NASDAQ

+14.89

+22.54

+8.04

+11.32

S&P 500

+15.23

+24.97

+4.16

+6.64

REAL YIELD

6/7 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.03%

-0.49%

1.47%

1.76%

 

Sources: barrons.com, usatoday.com, bigcharts.com, treasury.gov – 6/7/135,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


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Disclosure
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
Citations.1 – bloomberg.com/news/2013-06-07/payrolls-in-u-s-increased-175-000-in-may-unemployment-at-7-6-.html [6/7/13]
2 – blogs.barrons.com/stockstowatchtoday/2013/06/07/market-snaps-two-week-losing-streak-on-solid-jobs-report/ [6/7/13]
3 – ism.ws/ISMReport/NonMfgROB.cfm [6/7/13]
4 – articles.chicagotribune.com/2013-06-05/business/chi-fed-beigebook-20130605_1_u-s-economy-federal-reserve-most-districts [6/5/13]
5 – usatoday.com/money/markets/overview/ [6/7/13]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F7%2F12&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F7%2F12&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F7%2F12&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F6%2F08&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F6%2F08&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F6%2F08&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F6%2F03&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F6%2F03&x=0&y=0 [6/7/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F6%2F03&x=0&y=0 [6/7/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/7/13]

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