March 13th – Weekly Update

  • U.S. equities finished the week flat while new jobs data paved the way for a Federal Reserve rate hike. The S&P 500, Nasdaq and Dow Jones all experienced a slight loss. Oil took a dive hitting its lowest point since December 2016. Gold also dropped as expectations of a rate rise continue to grow. The 10-year U.S. Treasury yield closed at approximately 2.58%.
  • February nonfarm payrolls rose a seasonally adjusted 235,000, beating the 200,000 consensus. Construction jobs rose 58,000, the biggest gain since March 2007. The manufacturing industry added 28,000 positions, the most in three years. The retail sector shed 26,000 jobs, its greatest loss since late 2012.
  • The unemployment rate fell to 4.7%, in line with expectations. The labor force participation rate ticked up again. Average hourly earnings rose 0.2% month-to-month, slightly weaker than the 0.3% gain expected. However, the year-over-year rate was still in line with expectations posting a 2.8% gain. The average workweek came in at 34.4 hours, unchanged and matching the consensus.
  •  ADP reported that private payrolls increased 298,000 in February, well ahead of the 189,000 consensus and following an upwardly revised 261,000 rise in January. The February data was the strongest reading since March 2006 and (according to Bespoke) the largest beat relative to expectations since December 2011.
  • Crude oil settled at its lowest point since December 2016. The cause appeared to be the release of higher-than- expected U.S. inventory numbers. The Energy Information Administration (EIA) reported a crude oil build of 8.2M barrels, above consensus for 6.6M and representing the ninth straight week of inventory growth.
  • U.S. new orders for manufactured goods increased 1.2% month-over-month in January following a December rise of 1.3% and beating the 1% consensus. Transportation equipment orders shot up 6.2% supported by a 62.2% increase in defense aircraft and a 69.8% jump in civilian aircraft.
  • China experienced its worst export decline since 2009 posting a 2016 drop of 7.7% year-to-year. Imports were down 5.5%.
  • The UK Royal Institution of Chartered Surveyors (RICS) house price balance for February came in at 24%, in line with expectations of 23%.

CPWM Weekly Market Monitor (2017.03.13)