That beat the 230,000 hires forecast in a MarketWatch consensus of analysts. Yes, the headline jobless rate actually rose 0.1% to 5.7% last month, and the total unemployment rate (U-6) rose for the first time in six months to 11.3% – but average hourly wages were up 0.5%, a striking shift after the 0.3% December decrease.1,2
ONE ISM PMI FALLS, ANOTHER RISES
The Institute for Supply Management’s January factory PMI lost 1.6 points to come in at 53.5, while its January service sector index advanced 0.2 points to 56.7. Analysts polled by MarketWatch projected readings of 55.0 for the manufacturing gauge and 56.5 for the services gauge. In related news, the Federal Reserve said factory orders fell 3.4% in December, twice the November decline.1
CONSUMER SPENDING SANK IN DECEMBER
December saw a welcome 0.3% gain in consumer incomes but also a 0.3% pullback in consumer spending – the largest monthly dip since 2009. The Commerce Department noted sizable December declines in car and truck sales – and less spending on gas and other fuels. The personal savings rate rose 0.6% to 4.9%.3
MOMENTUM RETURNS TO THE MARKET
Oil rallied, hiring topped expectations and the euro area was poised to receive an economic stimulus, so big gains were the order of the week. The Dow soared 3.84% in five trading days, settling Friday at 17,824.29. The same stretch saw the Nasdaq climb 2.35% to 4,744.40 and the S&P 500 jump 3.03% to 2,055.47. Light sweet crude gained 8.84% last week in New York to reach $52.08 a barrel Friday; gold futures lost 3.62% on the COMEX.4
THIS WEEK: Monday, Wall Street reviews Q4 results from Loews Corp. and Hasbro. Tuesday brings data on December wholesale stockpiles plus earnings from CVS Health, Akamai, Dean Foods, LifeLock, Monster, Genworth, Kinross Gold, Molson Coors, Spirit Airlines, Starwood Hotels and Western Union. More earnings appear on Wednesday: Cisco, Tesla, Baidu, MetLife, Applied Materials, Panera, AOL, Cheesecake Factory, NetApp, Mosaic, Nvidia, PepsiCo, Owens Corning, Panera, Tesoro, Time Warner, TripAdvisor, Whole Foods and Zulily. January retail sales and December business inventories reports are out on Thursday, along with the latest initial jobless claims numbers and earnings from Coca-Cola, Avon, Apache, Groupon, Zynga, AIG, Boyd Gaming, CBS, Kellogg, Kraft Foods and Shutterfly. The University of Michigan’s initial February consumer sentiment index and earnings from J.M. Smucker and Red Robin complete the week on Friday.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||2/6 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.24%||0.57%||1.32%||1.62%|
Sources: online.wsj.com, bigcharts.com, treasury.gov – 2/6/155,6,7,8
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 – marketwatch.com/economy-politics/calendars/economic [2/6/15]
2 – tinyurl.com/nyfpnt2 [2/6/15]
3 – marketwatch.com/story/consumer-spending-posts-biggest-drop-since-2009-2015-02-02 [2/2/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [2/6/15]
5 – markets.wsj.com/us [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/6/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/6/15]