Today, the big April jobs report was supposed to show a recovery from March’s anemic 98,000 with a gain up to 188,000. Sure enough, the consensus was incorrect again as the number showed a gain of 211,000. The unemployment rate fell to a 10-year low at 4.4% due to a large number of people leaving the labor market. Average hourly earnings rose by 0.3% for a year-over-year advance of 2.5%. The largest gains were in the leisure and hospitality sector, followed by business, professional services and healthcare.
Weekly jobless claims rose by 19,000 to 238,000. The March trade deficit narrowed a bit to $43.71 billion and first-quarter productivity declined to 0.6% negative as labor costs rose by 3%. These numbers are what you would expect with G.D.P. growth only at 0.7%. March factory orders were higher by only 0.2%…the worst showing since last November;
Today’s yield on the 10-year Treasury Note was 2.35%, giving the Federal Reserve all of the ammunition it needs to raise rates next month. The recent economic reports like these today will likely justify their belief that the labor market is doing well. The other big item on the menu today is the final vote for the French presidential election on Sunday. The moderate candidate Macron apparently has a large lead in the polls.
The DOW was restrained earlier today by a large decline in the shares of IBM. Warren Buffett had unloaded one-third of his 81,000,000 shares in the first-quarter at obviously higher prices than where IBM is now. On the other hand, the DOW was helped by a large gain in AAPL after two days of idling following its report Tuesday night. AAPL made a new all-time high at $148 today. Other companies that moved up positively on earnings today were CTSH, SNCR, AAOI, HLF, SHAK and ZNGA. The healthcare sector was generally down today while the industrials were up nicely.
The DOW closed 55 points higher, the NASDAQ gained 25, and the S&P 500 added 9 points today.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.