In August, a notable hiring streak ended: for the first time since January, the economy failed to create 200,000 new jobs during a month. Investors were disappointed by the news from the Labor Department, but it came with a silver lining: the moderation in job gains may give the Federal Reserve a bit less incentive to adjust interest rates down the road. The jobless rate ticked down to 6.1% last month; the U-6 rate (underemployed & unemployed) declined from 12.2% to 12.0%. August also saw 0.2% wage growth.1
FACTORY & SERVICE SECTOR GROWTH TOPS ESTIMATES
Both the manufacturing and non-manufacturing PMIs overseen by the Institute for Supply Management posted August gains. ISM’s purchasing manager index for the service sector reached 59.6 last month while its factory sector PMI hit 59.0. Analysts polled by Briefing.com thought the services PMI would come in at 57.8, the factory PMI at 57.0. Word also came last week from the Commerce Department that factory orders were up 10.5% in July.2
GOLD & OIL BEAT RETREATS
NYMEX crude dropped 2.7% last week, losing 1.3% Friday alone to settle at $93.32 a barrel; it didn’t do as badly as natural gas, which sank 6.9% last week. COMEX gold ended the week at $1,267.20 an ounce, representing a 4-day loss of 1.6%. Silver closed Friday at $19.17 an ounce, also falling 1.6% for the trading week.3
STOCKS POST SMALL GAINS IN A SHORT WEEK
Rising another 0.22% across four days, the S&P 500 settled at 2,007.71 Friday. The NASDAQ and Dow also pushed higher: the former gained 0.55% in the abbreviated market week to close at 4,582.90 and the latter went north 0.34% to end the week at 17,137.36.4
THIS WEEK: Monday brings quarterly results from Campbell Soup and Casey’s General Stores. All eyes will be on Apple Tuesday, as it will likely unveil the iPhone 6 at its 9.9.14 media event; Wall Street will also consider earnings from Krispy Kreme, Barnes & Noble, Burlington Stores and Comverse. Wednesday marks the release of the July wholesale inventories report and earnings from Men’s Wearhouse and Restoration Hardware. On Thursday, China releases its August inflation data, a new initial claims report comes out, and Lululemon Athletica and Kroger announce earnings. Friday sees the release of the University of Michigan’s preliminary September consumer sentiment index plus the August retail sales numbers and the July business inventories report from the Commerce Department.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||9/5 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.31%||0.92%||1.70%||1.86%|
Sources: online.wsj.com, bigcharts.com, treasury.gov – 9/5/145,6,7,8
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1 – marketwatch.com/story/hiring-slows-as-us-adds-142000-jobs-in-august-2014-09-05 [9/5/14]
2 – briefing.com/investor/calendars/economic/2014/09/01-05 [9/5/14]
3 – livetradingnews.com/gold-silver-crude-oil-nat-gas-week-69596.htm [9/5/14]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [9/5/14]
5 – markets.wsj.com/us [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F5%2F13&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F5%2F13&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F5%2F13&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F4%2F09&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F4%2F09&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F4%2F09&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F7%2F04&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F7%2F04&x=0&y=0 [9/5/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F7%2F04&x=0&y=0 [9/5/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/5/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/5/14]