The Market Bull – February 1, 2019
The major averages were unable to hold their early gains despite generally positive data closing about even. Since Monday the Standard and Poors 500 Index is up 62 points or 2.3%, while the NASDAQ gained 189 points or 2.7%. As stocks go from thoughtless selling to close out 2018 to thoughtless buying to kick off 2019, go figure.
The Bureau of Labor Statistics January employment report handily beat expectations with 304,000 new jobs to start the year, December was revised down by 90,000 jobs.
A record 100 consecutive months of job gains. The official unemployment rate increased fractionally to 4%, average weekly hours were unchanged at 34.5, average hourly earnings gained an anemic .1%. A strong report at first glance, January could well be revised sharply lower next month, like December, so will see.
The Institute of Supply Management Manufacturing Index increased 2.5 points to 56.6 in January on gains in new orders and production, employment slipped a little.
Price data contracted for the first time since February of 2016, after falling more than 26 points in the last 8-months.
Construction spending increased .8% in November on a very large jump in residential construction activity that snapped a string of declines.
The best showing for this series in 7-months. Nonresidential or commercial construction and public construction both fell.
After 4-months of trade war inspired large gains, wholesale inventories advanced just .3% in November, missing expectations, on strength in Durable Goods stockpiling.
The Inventory to Sales Ratio increased fractionally to 1.29 months. Sales fell for a second month, down .6%. With the trade war talks going nowhere risks are tilted to the downside for this series.
Standard and Poors 500 Index closed at: 2,706.53 up 2.43
NASDAQ finished the day: 7,263.87 down 17.87
Gold ended trading at: $1,322.50 down $2.70