May 8th – Weekly Update

  • U.S. equities crept up with the Nasdaq, Dow Jones and S&P 500 all finishing the week slightly higher. This marked the third consecutive week of gains for the S&P 500. Oil and gold dove over the period hitting a five-month and one-month low, respectively. The 10-year U.S. Treasury yield closed at approximately 2.35%.
  • Congress passed a $1.1 trillion bill in a deal to avert a partial government shutdown and extend funding through the end of September.
  • The Federal Open Market Committee (FOMC) noted that economic activity has slowed since the last meeting, but added that the labor market continues to strengthen. The committee sees the slowdown as temporary. It also said that while consumer spending appears to have slowed, the fundamentals that have underpinned continued growth in consumption remain in place.
  • Unemployment fell 4.4% in April to achieve its lowest rate since May 2007 with nonfarm payrolls rising by 211,000. Initial jobless claims fell to 238,000 in the latest week, better than the 248,000 consensus and down 19,000 from the prior week.
  • A weaker than expected Institute for Supply Management (ISM) manufacturing index for April came in at 54.8, down from 57.2 in March and below the 56.5 consensus estimate. New orders fell to 57.5 from 64.5, while employment fell to 52.0 from 58.9. The report noted respondent commentary generally reflected stable to growing business conditions.
  • The ISM services headline reading came in at 57.5 for April, better than the 55.8 consensus estimate and up from 55.2 in March. New orders rose to 63.2 from 58.9 in the prior month, with only 8% of respondents reporting lower orders
  • The final Markit manufacturing purchasing manager’s index (PMI) fell to 52.8 in April from 53.3 in March, which was the slowest rate of growth in seven months. The report noted signs of slowing growth most evident in the consumer sector.
  • Personal spending for March came in flat, weaker than the 0.2% gain expected and compared to a flat February reading as well. This came as personal income rose 0.2% for March, a bit weaker than the 0.3% increase expected and compared to the 0.3% gain seen in February.

CPWM Weekly Market Monitor (2017.05.08)