Major stock indices ended a volatile week mixed. Bond yields surged this week and Friday’s job gains far exceeded expectations increasing the likelihood of another FED hike in November.
Treasury bond yields surged with the 30-year bond yield at 4.961% and the 10-Year note at 4.786%. Freddie Mac reported that the average 30-year mortgage rate rose to 7.49%. Crude oil fell to $82.77 a barrel and natural gas rose to $3.26 per MMBTUs. The U.S. dollar index fell to 106.09 and gold fell to $1843.60 an ounce.
- S&P Global released its purchasing managers indices for September. Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
- US manufacturing PMI rose from 47.9 to 49.8.
- US services PMI fell from 50.5 to 50.1.
- China manufacturing PMI fell from 51.0 to 50.6.
- China services PMI fell from 51.8 to 50.2.
- Japan manufacturing PMI fell from 50.0 to 49.3
- Japan services PMI fell from 54.3 to 53.8.
- Eurozone manufacturing PMI fell from 43.5 to 43.4.
- Eurozone services PMI rose from 47.9 to 48.7.
- Mexico manufacturing PMI fell from 51.2 to 49.8.
- Canada manufacturing PMI fell from 48.0 to 47.5.
- The Commerce Department reported:
- New orders for manufactured goods rose 1.2% in August after falling 2.1% in July.
- Construction spending rose 0.5% in August after rising 0.9% in July.
- The U.S. trade deficit fell 9.9% in August as exports rose and imports fell.
- The Federal Reserve Reported the change in the M2 money supply and inflation over the several years. M2 has fallen in the past year which is unprecedented in records going back to 1959 but it follows extremely rapid growth in M2 during the pandemic. This decline in M2 should continue to bring inflation down over the long run.
- The Labor Department reported:
- Job openings increased to 9.6MM in August.
- The U.S. added 336,000 jobs in September, the most since January.
- The unemployment rate remained at 3.8%.
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- Hourly wages rose 0.2% in September and 4.2% from a year ago.
- Seasonally adjusted first-time claims for unemployment were 207,000, an increase of 2,000 from the previous week’s revised level of 205,000.
- The 4-week moving average of claims, designed to smooth out volatility, was 208,750, a decrease of 2500 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil was unchanged at 12.9MM BPD.
- Natural gas storage rose 86BN cubic feet and is above the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs fell 5 to 497. The number of active natural gas rose 2 to 118.
Please call us if you have any questions.
Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
https://bakerhughesrigcount.gcs-web.com/na-rig-count
