Weekly Economic Update
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Last week’s riddle:
Joe showed up at a business meeting fresh and alert, even though he had not slept a wink during any of the past four days. Why wasn’t he tired?
Last week’s answer:
He had slept during the past four nights.
February 10, 2014
WAS IT THE WEATHER, OR THE ECONOMY?
For a second straight month, hiring was weak. Employers added 113,000 jobs in January, and while the unemployment rate ticked down to 6.6%, the Labor Department’s latest report came with some caution flags. Private-sector payrolls expanded by 142,000 new positions, but 29,000 federal workers were let go and there were actually job cuts in the booming health care sector. In 2013, the U.S. workforce expanded by an average of 194,000 jobs a month. The February jobs report will either reject or confirm suspicions of a weakening labor market.1
ISM INDICES FLASH DIFFERENT SIGNALS
Wall Street did not expect the Institute for Supply Management’s January manufacturing PMI to drop to 51.3 from the (revised) December reading of 56.5. Economists surveyed by Briefing.com forecast a January reading of 56.0. ISM’s service sector PMI improved a full point to 54.0 in January.2
FACTORY ORDERS SLIP; SO DO AUTO SALES
The Census Bureau recorded a 1.5% December retreat in factory orders, offsetting an equal December gain. Although Chrysler and Nissan reported January sales gains, other major automakers did not as fewer Americans purchased cars last month due to the miserable weather across much of the nation. In January, auto sales were down 3.0% year-over-year.2,3
STOCKS REBOUND, ADVANCE FOR THE WEEK
Investors bought back into stocks Thursday and Friday, offsetting last Monday’s major plunge. That resulted in the following weekly performances: DJIA, +0.61% to 15,794.08; NASDAQ, +0.54% to 4,125.86; S&P 500, +0.81% to 1,797.02.4
THIS WEEK: Nothing major is scheduled for Monday. On Tuesday, Federal Reserve chair Janet Yellen delivers the central bank’s semi-annual report on monetary policy to Congress, and the market considers earnings from TripAdvisor, CVS/Caremark, Sprint, PG& E, Western Union, Mosaic, and Dean Foods plus data on December wholesale inventories. Wednesday offers earnings from Cisco, CBS, Applied Materials, Whole Foods, NVIDIA, Deere, NetApp, MetLife and Fidelity. More earnings arrive Thursday – Avon, PepsiCo, Agilent, Nielsen, Kraft and Goodyear – plus reports on January retail sales and December business inventories. This month’s preliminary University of Michigan consumer sentiment index comes out Friday, as does the Fed’s report on January industrial output.
Sources: USATODAY.com, bigcharts.com, treasury.gov - 2/7/145,6,7,8
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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. 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.
1 - marketwatch.com/story/us-economy-adds-113000-jobs-in-january-2014-02-07 [2/7/14]
2 - briefing.com/investor/calendars/economic/ [2/7/14]
3 - zacks.com/stock/news/121918/Cold-Weather-Hits-Jan-US-Auto-Sales [2/4/14]
4 - thestreet.com/story/12317464/1/market-hustle-us-stocks-gain-as-markets-shrug-off-jobs-miss.html [2/7/14]
5 - usatoday.com/money/markets/overview/ [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F7%2F12&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F7%2F12&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F7%2F13&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F6%2F09&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F6%2F09&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F6%2F09&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F6%2F04&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F6%2F04&x=0&y=0 [2/7/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F6%2F04&x=0&y=0 [2/7/14]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/7/14]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/7/14]
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