Most major indices ended the week lower, except for the Nasdaq 100, which posted a slight gain. Lower consumer sentiment and fears that tariffs will push up inflation drove the losses.
Treasury bond yields fell with the 30-year bond yield at 4.667% and the 10-Year note at 4.437%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.89%. Crude oil fell to $71.51 a barrel and natural gas rose to $3.233 per MMBTUs. The U.S. dollar index fell to 107.47 and gold rose to $2898.70 an ounce.
In economic reports this week:
- The S&P Global released its purchasing managers indices for January. Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
- U.S. manufacturing PMI rose from 49.4 to 51.2.
- U.S. services PMI fell from 56.8 to 52.9.
- Canada manufacturing PMI fell from 52.2 to 51.6.
- Canada services PMI rose from 48.2 to 49.0.
- Mexico manufacturing PMI fell from 49.8 to 49.1.
- China manufacturing PMI fell from 51.5 to 51.1.
- China services PMI fell from 52.2 to 51.0.
- Japan manufacturing PMI fell from 49.6 to 48.7.
- Japan services PMI rose from 50.9 to 53.0.
- Eurozone manufacturing PMI rose from 45.1 to 46.6.
- Eurozone services PMI fell from 51.6 to 51.3
- The Commerce Department reported:
- Construction spending rose 0.5% in December.
- Construction spending rose 0.5% in December.
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- Manufactured goods orders fell 0.9% in December after falling 0.8% in November.
- Manufactured goods orders fell 0.9% in December after falling 0.8% in November.
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- The trade deficit rose 24.7% in December as imports rose and exports fell.
- The trade deficit rose 24.7% in December as imports rose and exports fell.
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- Real wholesale inventories fell 0.5% in December after falling 0.1% in November.
- Real wholesale inventories fell 0.5% in December after falling 0.1% in November.
- The Labor department reported:
- Job openings fell to 7.6MM in December and were down 1.3MM from a year ago.
- Hires were little changed at 5.5MM.
- Separations were little changed at 5.3MM.
- The U.S. added 143,000 jobs in January and the unemployment rate fell to 4.0%.
- Average hourly wages increased 0.5% to $35.87. From a year ago average hourly earnings have risen 4.1%,
- The average workweek fell 0.1 hours to 34.1 hours.
- November’s job gains were revised up from 212,000 to 261,000.
- Seasonally adjusted first-time claims for unemployment were 219,000, a decrease of 11,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 216,750 an increase of 4000 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- Job openings fell to 7.6MM in December and were down 1.3MM from a year ago.
- The EIA weekly oil report is here: http://ir.eia.gov/wps91wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil rose from 13.240MM BPD to 13.478MM BPD.
- Natural gas storage fell 174BN cubic feet and was below its average level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs rose 1 to 480 and the number of natural gas rigs rose 2 to 100.
- Factset reported with 77% of S&P 500 companies reporting, the blended earnings increase from a year ago is 16.4%.
Please call us if you have any questions.
Loren Rex – Emeritus
Erik A Smith, AIF® – 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. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
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
