U.S. stocks registered a string of four days of solid gains to put the finishing touches on the best week of 2019. The markets finished strong as a softer-than-expected May labor report bolstered elevated Fed rate cut expectations, while looking to see if the U.S. delays increased tariffs on Mexico, which are still set to kick in on Monday. Treasury yields extended a drop and the U.S. dollar fell. Crude oil prices added to yesterday’s recovery from a recent tumble and gold extended a rally. Zoom Video and Vail Resorts were higher after their quarterly reports.
The Dow Jones Industrial Average (DJIA) rose 263 points (1.0%) to 25,984, the S&P 500 Index increased 30 points (1.1%) to 2,873, and the Nasdaq Composite gained 127 points (1.7%) to 7,742. In moderate volume, 728 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq. WTI crude oil advanced $1.40 to $53.99 per barrel and wholesale gasoline was up $0.03 at $1.74 per gallon. Elsewhere, the Bloomberg gold spot price traded $5.75 higher to $1,341.10 per ounce, and the Dollar Index— a comparison of the U.S. dollar to six major world currencies—fell 0.5% to 96.58. Markets posted the best week of 2019, as the DJIA surged 4.7%, the S&P 500 Index jumped 4.4%, and the Nasdaq Composite rallied 3.9%.
Nonfarm payrolls grew by 75,000 jobs month-over-month (m/m) in May, compared to the Bloomberg forecast of a 175,000 increase. The rise of 263,000 seen in April was revised to a gain of 224,000 jobs. Excluding government hiring and firing, private sector payrolls increased by 90,000, versus the forecasted gain of 174,000, after rising by 205,000 in April, revised from the 236,000 increase that was initially reported. The Department of Labor said employment continued to trend up in professional and business services and in health care, but retail and government payrolls shrank.
The unemployment rate remained near a 50-year low of 3.6%, matching forecasts, while average hourly earnings were up 0.2% m/m, below projections of a 0.3% gain and matching April’s unrevised increase. Y/Y, wage gains were 3.1% higher, south of estimates calling for it to match April’s 3.2% gain. Finally, average weekly hours remained at April’s 34.4 rate, compared to estimates calling for the figure to tick higher to 34.5.
Wholesale inventories were revised to a 0.8% m/m gain in April, versus expectations to remain at the preliminary 0.7% increase, and compared to March’s unrevised flat reading. Sales declined 0.4%, versus the expected 0.2% dip, and following March’s 1.8% gain.
Consumer credit showed consumer borrowing expanded by $17.5 billion during April, rebounding from the smallest increase in nine months with the strongest gain since November and well above the $13.0 billion forecast. March’s figure was adjusted slightly upward to an increase of $11.0 billion.
Treasuries were higher, with the yields on the 2-year and 10-year notes, along with the 30-year bond, falling 4 basis points to 1.84%, 2.08% and 2.57%, respectively.
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