The Market Bull – March 8, 2019
An ugly employment report sent the major averages deep into the red in early trading, closing with small losses. Since Monday the Standard and Poors 500 Index has lost 71 points or 2.5%, while the NASDAQ slipped 229 points or 3%.
The Bureau of Labor Statistics reported just 20,000 new jobs in February, missing expectations of 180,000 by a country mile. Previous months were revised higher by 12,000. The average workweek slipped .1 hours to 34.4.
Average weekly earnings gained a respectable .4%. The official unemployment rate fell to a very low 3.8%. The labor force participation rate was unchanged at 63.2%. A disappointing report to be sure but one month does not make a trend. That said the data has been coming in soft of late, so will see.
Construction activity bounced back in January with a better than expected 1.23 million units annualized pace for housing starts. While the 18.6% gain is impressive it follows 4 consecutive declines. Permits increased for a 3rd month up 1.4% to 1.345 million units annualized.
Global stocks fared poorly this week as well after Chinese exports plunged more than 20% compliments of the trade war and tariffs. Over in Europe the Central Bank surprised everyone with a renewal of its cheap bank loan program or targeted long-term refinancing operations, or TLTROs, as it is called. Additionally they announced plans to keep Euro Area interest rates ultra-low through early 2020. Given that the Italian economy is officially in recession, a crash out Brexit looking very likely and considerable civil unrest in France amongst other items, monetary easing comes as no surprise.
Standard and Poors 500 Index closed at: 2,743.07 down 5.86
NASDAQ finished the day: 7,408.14 down 13.32
Gold ended trading at: $1,300.40 up $14.30