November 2014 was the best month for hiring since January 2012. Analysts polled by MarketWatch had projected payrolls expanding by 235,000 jobs last month, and that forecast was trumped. While seasonal jobs constituted 50,000 of the new positions, professional and business hires comprised 86,000 more. The Labor Department also found average hourly wages rising 0.4% last month (though they were still just up 2.1% in 12 months). More hiring gains like this might lead the Federal Reserve to tighten a bit sooner than investors anticipate. The jobless rate (which the Labor Department determines from a different survey of households) stayed at 5.8% in November, but the U-6 rate including both the jobless and underemployed ticked down to 11.4%.1,2
FACTORY, SERVICE SECTORS STAY HEALTHY
November brought a major gain for the non-manufacturing PMI maintained by the Institute for Supply Management: it advanced 2.2 points to 59.3. ISM’s factory PMI dipped from October’s 59.0 reading to 58.7, still far above the 50 mark that delineates expansion from contraction. A MarketWatch survey of economists projected both PMIs to come in at 57.7.2,3
GOLD RALLIES, OIL RETREATS FURTHER
Across December 1-5, the precious metal gained 1.3% on the COMEX, ending the week at $1,190.40 an ounce. That happened even as the greenback hit a 5-year high versus a number of key currencies Friday, reducing gold’s lure. Oil prices declined again – NYMEX crude settled Friday at a 5½-year low of $65.84 a barrel.4
DOW NEARS 18,000
The blue chips settled just a rally removed from that milestone Friday at 17,958.79, rising 0.73% in 5 days. How did the Nasdaq and S&P 500 do? The former declined 0.23% on the week to 4,780.76; the latter rose 0.38% during the week to 2,075.37.5
THIS WEEK: Nothing major is scheduled for Monday. Tuesday, earnings from AutoZone, Burlington Stores and Krispy Kreme arrive along with data on October wholesale inventories. Wednesday brings earnings from Men’s Wearhouse, Costco, Casey’s General Stores and Toll Brothers. November retail sales numbers are out Thursday, plus reports on initial jobless claims and October business stockpiles and Q3 results from Lululemon Athletica. Friday, Wall Street interprets the University of Michigan’s initial December consumer sentiment index, November’s Producer Price Index and a report on China’s November factory output.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||12/5 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.56%||0.76%||1.34%||1.70%|
Sources: online.wsj.com, bigcharts.com, treasury.gov – 12/5/146,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
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1 – forbes.com/sites/samanthasharf/2014/12/05/jobs-report-u-s-economy-added-321000-jobs-in-november-unemployment-steady-at-5-8/ [12/5/14]
2 – marketwatch.com/economy-politics/calendars/economic [12/5/14]
3 – ism.ws/ [12/5/14]
4 – proactiveinvestors.com/companies/news/58616/gold-drops-14-us-crude-retreats-to-over-5-yr-low-58616.html [12/5/14]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [12/5/14]
6 – markets.wsj.com/us [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F5%2F13&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F5%2F13&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F5%2F13&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F4%2F09&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F4%2F09&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F4%2F09&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F6%2F04&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F6%2F04&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F6%2F04&x=0&y=0 [12/5/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/5/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/5/14]