Good news on Main Street was not so good for Wall Street. Non-farm employers added 295,000 new workers to payrolls in February, according to the Labor Department; the headline unemployment rate fell to 5.5% while the U-6 rate measuring the unemployed plus underemployed declined to 11.0%. Professional and business sector hiring was up 3.5% year-over-year, construction hiring 5.3%. These labor market improvements weighed on the stock market Friday, with the S&P 500 (-29.78) suffering its biggest one-day loss since January – investors worried that the report would tip the Federal Reserve toward tightening sooner, even with only 2.0% hourly wage growth over the past year.1,2
PERSONAL SPENDING SLIPS IN JANUARY
Rather than spending leftover money resulting from falling gas prices, households seem to be saving it. The Commerce Department said consumer spending lessened 0.2% in January after declining 0.3% in December. Core personal spending (with fuel and energy expenditures removed) did rise 0.3%.3
ISM FACTORY PMI SHOWS SMALL DECLINE
February saw the Institute for Supply Management’s manufacturing PMI tail off 0.6 points to a 52.9 mark. ISM’s service sector PMI rose 0.2% to a reading of 56.9, however. In other manufacturing news, January brought a 0.2% retreat in the Federal Reserve’s gauge of factory orders, which had slipped 3.5% in December.1,4
STOCKS POST 5-DAY LOSSES
Friday’s selloff left the S&P 500 down 1.58% for the week, the Dow off 1.52% and the Nasdaq down 0.73%. Friday’s settlements for the big three were as follows: S&P, 2071.26; Dow, 17,856.78; Nasdaq, 4,927.37.5
THIS WEEK: Monday, Urban Outfitters and Casey’s General Stores report quarterly results. Tuesday brings a report on January wholesale inventories and earnings from VeriFone and Barnes & Noble. Men’s Wearhouse, Rosetta Stone, Shake Shack and Krispy Kreme present earnings Wednesday. Reports on February retail sales, January business inventories and euro area factory output arrive Thursday along with the latest initial claims figures and earnings from Jamba, RE/MAX, El Pollo Loco, FTD, Dollar General and Aeropostale. March’s initial University of Michigan consumer sentiment index appears Friday, along with February’s Producer Price Index.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||3/6 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.41%||0.53%||1.48%||1.63|
Sources: online.wsj.com, bigcharts.com, treasury.gov – 3/6/156,7,8,9
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 – haver.com/ [3/6/15]
2- marketwatch.com/column/market-snapshot?dist=tbeforebell [3/6/15]
3 – reuters.com/article/2015/03/02/us-usa-economy-spending-idUSKBN0LY1DU20150302 [3/2/15]
4 – ism.ws/ISMReport/NonMfgROB.cfm [3/6/15]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [3/6/15]
6 – markets.wsj.com/us [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F6%2F14&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F6%2F14&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F6%2F14&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F5%2F10&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F5%2F10&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F5%2F10&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F7%2F05&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F7%2F05&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F7%2F05&x=0&y=0 [3/6/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/6/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/6/15]