Today, the DOW rose 62 points to end the week at 21,206. The S&P 500 gained 9 and the NASDAQ added 58 points to close at 6305. All three major indices reached their all-time highs during the session.
The ADP estimates for the jobs report were way off the mark as usual today. Instead of the 253,000 that everyone fell in love with and believed yesterday, the official number was 138,000. The prior two months were revised lower to the tune of 66,000 fewer jobs. Better news came in the form of the unemployment rate…it declined to 4.3%…the lowest since 2003. This was due in part to a shrinking labor force. Average hourly earnings rose by 0.2%, in line with forecasts.
This weak report and further downward revisions and a collapse of bond yields, along with a very weak first-quarter G.D.P. of 1.2%, turns to an almost universal belief that the Fed will raise interest rates this month. Raising rates in a weakening economy has proved negative for stocks in the past. On the other hand, the fact that the stock market keeps leaping higher to new records means that investors are taking an optimistic view.
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.