U.S. stocks were higher, finishing the week solidly to the upside, with reports of progress from the Chinese state media on the U.S./China trade front appearing to buoy the markets, along with eased BREXIT concerns, positive earnings reports from Broadcom and favorable jobs and consumer sentiment data. Volatility seemed to get a boost on quadruple witching day—the simultaneous expiration of stock and index futures and options contracts. However, industrial production missed and regional manufacturing activity unexpectedly fell. Treasury yields, the U.S. dollar and crude oil prices were lower, though gold gained ground.
The Dow Jones Industrial Average (DJIA) rose 139 points (0.5%) to 25,849, the S&P 500 Index gained 14 points (0.5%) to 2,822, and the NASDAQ Composite increased 58 points (0.8%) to 7,689. In heavy volume, 2.7 billion shares were traded on the NYSE and 3.3 billion shares changed hands on the NASDAQ. WTI crude oil fell $0.18 to $58.43 per barrel and wholesale gasoline was flat at $1.85 per gallon. Elsewhere, the Bloomberg gold spot price rose $5.61 to $1,301.78 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.2% to 96.59. Markets were solidly higher on the week, as the DJIA rose 1.6%, the S&P 500 Index was up 2.9%, while the NASDAQ Composite ascended 3.8%.
The Federal Reserve’s industrial production report showed a 0.1% month-over-month rise in February, compared to the Bloomberg estimate calling for a 0.4% gain and January’s upwardly-revised decrease of 0.4%. Manufacturing output decreased for a second-straight month, while mining and utilities production rose, with the latter jumping. Despite the miss, total industrial production was 3.5% higher y/y. Capacity utilization dipped to 78.2% from the prior month’s upwardly-revised 78.3% rate, below forecasts of 78.5%. Capacity utilization is 1.6 percentage points below its long-run average.
The March preliminary University of Michigan Consumer Sentiment Index jumped to 97.8 from February’s read of 93.8, and compared to expectations for a rise to 95.6. The consumer expectations and current economic condition components of the survey both improved. The 1-year inflation forecast declined to 2.4% from 2.6%, and the 5-10 year inflation forecast rose to 2.5% from the previous 2.3% rate.
The Empire Manufacturing Index showed output from the New York region surprisingly fell but remained at a level denoting expansion (a reading above zero) for March. The index dropped to 3.7 from February’s unrevised 8.8 level, with forecasts calling for an increase to 10.0.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, rose to a new record high of 7.6 million jobs available to be filled in January from December’s upwardly-adjusted 7.5 million, and above the forecasted 7.2 million. The hiring rate ticked higher to 3.9% from December’s 3.8% pace, and the separation rate also nudged higher to 3.7% from December’s level of 3.6%.
Treasuries were higher, with the yield on the 2-year note dipping 2 basis points (bps) to 2.44%, the yield on the 10-year note declining 4 bps to 2.59%, while the yield on the 30-year bond fell 3 bps to 3.01%.
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