COMPANIES ADDED FEWER WORKERS IN MARCH
Just 98,000 net new jobs were created last month, and some analysts think Winter Storm Stella may have held hiring back. Even so, the Department of Labor’s latest employment report showed the U-3 jobless rate decreasing 0.2% to 4.5%; the broader U-6 rate fell 0.3% to 8.9%. The big factor in both declines: 326,000 people leaving the ranks of the unemployed. If all this seems incongruous, consider that the Bureau of Labor Statistics compiles data from two separate surveys: one focusing on payroll growth; the other, on the employment status of individuals.1
STRONG EXPANSION FOR SERVICE, FACTORY SECTORS
Another month, another wave of growth for industry and retail businesses – this was the tale told by the two purchasing manager indices at the Institute for Supply Management. For March, ISM’s service sector PMI came in at 55.2; its factory PMI, at 57.2. The services PMI lost 2.4 points from its February mark; the factory PMI, 0.5 points. Still, these readings were well above the crucial 50 level.2
FED MAY START TO REDUCE ITS BALANCE SHEET
According to the minutes of the March Federal Reserve policy meeting, most Federal Open Market Committee members believe that the central bank should begin shrinking its vast portfolio of mortgage-backed securities and Treasuries later in 2017. The minutes noted that whether the FOMC decides to phase out or halt reinvestments, the shift in balance sheet policy “should be communicated…well in advance of an actual change.”3
STOCKS MOVE SLIGHTLY LOWER
Wall Street’s three major equity indices pulled back a bit last week. Over five days, the Dow ceded just 0.03% to 20,656.10. But the S&P 500 (closed at 2,355.54) and Nasdaq (closed at 5,877.81) took deeper respective losses of 0.30% and 0.57%. The Russell 2000 slipped 1.54% for the week to 1,364.56; the CBOE VIX “fear index” rose 4.04% to 12.87.4
THIS WEEK: On Monday evening, Federal Reserve chair Janet Yellen discusses monetary policy at the University of Michigan. Bank of the Ozarks reports Q1 results Tuesday. Earnings from Delta Air Lines, Fastenal, and Pier 1 Imports arrive Wednesday. On Thursday, the Q1 earnings season gathers steam, with Citigroup, JPMorgan Chase, PNC Financial Services Group, and Wells Fargo all reporting; apart from that, the March Producer Price Index, the preliminary April University of Michigan consumer sentiment index, and a new initial claims report also appear. Friday brings March retail sales figures and the March Consumer Price Index.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.52 +17.75 +11.63 +6.45
NASDAQ +9.19 +21.23 +18.16 +13.78
S&P 500 +5.21 +15.36 +13.70 +6.32
REAL YIELD 4/7 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.44% 0.12% -0.16% 2.27%
Sources: wsj.com, bigcharts.com, treasury.gov – 4/7/174,5,6,7
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.
WEEKLY QUOTE
“You think adventure is dangerous, try routine. It’s lethal.”
– Paul Coelho
WEEKLY TIP
Anyone who wants to avoid or lower probate costs and simplify distribution of their assets after their death would be wise to consider a revocable living trust. These trusts can be modified during the grantor’s lifetime.
WEEKLY RIDDLE
I was born as a rock, being molded to great degree. I dance around a fiery neighbor, who does not dance with me. Instead, it provides my people with some long-lasting energy. What am I?
Last week’s riddle:
What contains thousands of ears, but hears absolutely nothing?
Last week’s answer:
A corn field.
Citations.
1 – forbes.com/sites/maggiemcgrath/2017/04/07/u-s-adds-just-98000-jobs-in-march-missing-expectations-by-a-wide-margin/ [4/7/17]
2 – instituteforsupplymanagement.org/ismreport/nonmfgrob.cfm?SSO=1 [4/5/17]
3 – reuters.com/article/us-usa-fed-minutes-idUSKBN1772G4 [4/5/17]
4 – markets.wsj.com/us [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F7%2F16&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F7%2F16&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F7%2F16&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F5%2F12&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F5%2F12&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F5%2F12&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F5%2F07&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F5%2F07&x=0&y=0 [4/7/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F5%2F07&x=0&y=0 [4/7/17]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/7/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/7/17]
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Stonecreek is located in Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City in Utah.
