Not for novice investors.
Friday, 4 April 2014
Stocks slip as Nasdaq slides, dollar eases on jobs data
A slide in momentum stocks pulled Wall Street and a measure of global equities lower on Friday despite a solid U.S. jobs report, while the dollar weakened on views the Federal Reserve will likely continue to wind down its stimulus.
The U.S. bond market surprisingly rallied, particularly five-year Treasury notes, which had been weak lately on fears the Fed could raise interest rates earlier than anticipated.
The FTSEurofirst 300 index of European shares touched a high last seen in 2008 on the jobs data and closed higher, marking nine straight gains and three consecutive weeks of higher closes.
But stocks on Wall Street retreated after stabilizing earlier in the week as momentum stocks such as biotechs fell for a second straight session. The Nasdaq biotech index <.NBI> lost 3.2 percent and the Nasdaq composite fell more than 2 percent, pulling down U.S. stocks and global equities.
"You’ve got some big names in there. There is a high correlation inside of those groups," said Keith Bliss, senior vice-president at Cuttone & Co in New York. "Managers tend to trade the entire group as opposed to individual names. So that of course, is hitting the Nasdaq and everybody else."
Equities had opened higher on optimism spurred by the U.S. nonfarm payrolls report, which showed jobs rose by 192,000 in March, just shy of the 200,000 forecast, after rising 197,000 in February. The unemployment rate was unchanged at 6.7 percent.
With a solid pace of hiring for a second month, the economy appears to be recovering from a winter slowdown. [ID:nL1N0MV1UG]
A smaller survey of households, from which the unemployment rate is derived, showed a much bigger surge in employment. That jump was met by a rise in the number of people entering the labor force, a show of confidence in the U.S. job market.
The percentage of working-age Americans with a job reached its highest level since the summer of 2009.
"Overall, people are taking this as a sign there isn’t some sort of underlying weakness in the economy," said Kate Warne, investment strategist at Edward Jones in St. Louis.
"It has fit into people’s belief that most of the weakness we saw earlier was due to the weather and not something really changing about the economy."
The S&P 500 hit a fresh record high before retreating. MSCI's all-country world stock index <.MIWD00000PUS> fell 0.07 percent.
The Dow Jones industrial average fell 40.17 points, or 0.24 percent, to 16,532.38. The S&P 500 lost 9.96 points, or 0.53 percent, to 1,878.81 and the Nasdaq Composite dropped 83.989 points, or 1.98 percent, to 4,153.75.
Bond prices rose, with the 5-yearup 12/32 in price to yield 1.7008 percent. The benchmark 10-year U.S. Treasury note rose 16/32 in price to yield 2.7298 percent.
"This number doesn't give any reason to move up the Fed timing of rate hikes, which is what was feared most," said John Briggs, U.S. rates strategist at RBS in Stamford, Connecticut.
The FTSEurofirst 300 index closed up 0.56 percent at 1,352.78 points.
The dollar was choppy against the euro and declined against other major currencies despite the solid U.S. jobs gains.
The jobs report will likely encourage the Fed to continue reducing, or tapering, its massive monetary stimulus, according to Anthony Valeri, investment strategist at LPL Financial in San Diego.
"It's a Goldilocks report, not too warm and not too cold, and puts pressure on the next report in May to be good," Valeri said. "It doesn't change the pace of tapering and shows the economy is still on track."
The greenback was up 0.17 percent against the euroat $1.3695. It fell 0.51 percent to 103.38 against the Japanese yen after hitting a session high of 104.12 yen in trading immediately after the employment report.
Brent crude rose above $106 a barrel as expectations of a deal to reopen vital Libyan oil ports were balanced by doubts that a lasting resolution was imminent.
Brent crudewas up 69 cents at $106.84 a barrel. U.S. crude , or West Texas Intermediate (WTI), rose $1.04 to $101.33 a barrel.
Source: Reuters
The U.S. bond market surprisingly rallied, particularly five-year Treasury notes, which had been weak lately on fears the Fed could raise interest rates earlier than anticipated.
The FTSEurofirst 300 index of European shares touched a high last seen in 2008 on the jobs data and closed higher, marking nine straight gains and three consecutive weeks of higher closes.
But stocks on Wall Street retreated after stabilizing earlier in the week as momentum stocks such as biotechs fell for a second straight session. The Nasdaq biotech index <.NBI> lost 3.2 percent and the Nasdaq composite fell more than 2 percent, pulling down U.S. stocks and global equities.
"You’ve got some big names in there. There is a high correlation inside of those groups," said Keith Bliss, senior vice-president at Cuttone & Co in New York. "Managers tend to trade the entire group as opposed to individual names. So that of course, is hitting the Nasdaq and everybody else."
Equities had opened higher on optimism spurred by the U.S. nonfarm payrolls report, which showed jobs rose by 192,000 in March, just shy of the 200,000 forecast, after rising 197,000 in February. The unemployment rate was unchanged at 6.7 percent.
With a solid pace of hiring for a second month, the economy appears to be recovering from a winter slowdown. [ID:nL1N0MV1UG]
A smaller survey of households, from which the unemployment rate is derived, showed a much bigger surge in employment. That jump was met by a rise in the number of people entering the labor force, a show of confidence in the U.S. job market.
The percentage of working-age Americans with a job reached its highest level since the summer of 2009.
"Overall, people are taking this as a sign there isn’t some sort of underlying weakness in the economy," said Kate Warne, investment strategist at Edward Jones in St. Louis.
"It has fit into people’s belief that most of the weakness we saw earlier was due to the weather and not something really changing about the economy."
The S&P 500 hit a fresh record high before retreating. MSCI's all-country world stock index <.MIWD00000PUS> fell 0.07 percent.
The Dow Jones industrial average fell 40.17 points, or 0.24 percent, to 16,532.38. The S&P 500 lost 9.96 points, or 0.53 percent, to 1,878.81 and the Nasdaq Composite dropped 83.989 points, or 1.98 percent, to 4,153.75.
Bond prices rose, with the 5-year
"This number doesn't give any reason to move up the Fed timing of rate hikes, which is what was feared most," said John Briggs, U.S. rates strategist at RBS in Stamford, Connecticut.
The FTSEurofirst 300 index closed up 0.56 percent at 1,352.78 points.
The dollar was choppy against the euro and declined against other major currencies despite the solid U.S. jobs gains.
The jobs report will likely encourage the Fed to continue reducing, or tapering, its massive monetary stimulus, according to Anthony Valeri, investment strategist at LPL Financial in San Diego.
"It's a Goldilocks report, not too warm and not too cold, and puts pressure on the next report in May to be good," Valeri said. "It doesn't change the pace of tapering and shows the economy is still on track."
The greenback was up 0.17 percent against the euro
Brent crude rose above $106 a barrel as expectations of a deal to reopen vital Libyan oil ports were balanced by doubts that a lasting resolution was imminent.
Brent crude
Two Oil and gas Plays in Colombia and Peru
One had a nice run from March till today.
The other has been rather volatile in the short run, but a buy from my top picks.
The other has been rather volatile in the short run, but a buy from my top picks.
U.S. Trade Gap Widens, Spurring Downshift in GDP Projections
The Wall Street Journal reports,"the nation's exports declined 1.1% to $190.43 billion, while imports rose 0.4% to $232.73 billion, the Commerce Department said Thursday. As a result, the nation's trade gap widened 7.7% to $42.3 billion, more than the $38.6 billion gap forecast by economists. It was the largest trade deficit since September".
February's export decline followed a 0.6% gain in January. That suggests the surge in overseas sales that helped boost economic growth late last year was likely unsustainable. Growth in China is slowing while Europe's recovery remains fragile, tempering demand for U.S. exports.
The report triggered a spate of downward revisions to first-quarter growth estimates, which had already come down substantially due to economic disruptions caused by unusually cold and stormy weather.
Macroeconomic Advisers lowered its first-quarter growth forecast to a 0.9% annual growth rate from 1.4% previously. Morgan Stanley lowered its forecast to a 1.2% pace from 1.5%. Economists at Royal Bank of Scotland lowered their forecast to a 0.6% annual growth rate from 1.2% previously.
February's meager import growth provided new evidence of weak spending by U.S. consumers and businesses in the early part of the year. Domestic demand looks even weaker after adjusting the import data for inflation. Stripping out the effect of higher prices for petroleum and other products, imports fell slightly. Imports of capital goods, industrial supplies and petroleum products all declined. Imports of crude oil fell to $19.5 billion, the lowest level since late 2010, a reflection of expanded domestic energy production.
The U.S. economy trade data showed also some signs of strengthening in March. Recent data showed auto sales surging to one of the strongest rates in years after weakening in January and February, while manufacturing activity strengthened. According to a survey of purchasing managers by the Institute for Supply Management, March manufacturing output rebounded from multiyear lows in February, new orders rose and export orders picked up.
A bout of financial volatility in emerging markets early in the year has subsided, providing a more stable outlook that should help support U.S. exports.
But challenges remain for the global backdrop. China's growth engine is downshifting. Many economists believe Europe risks entering a period of deflation. And tensions with Russia over Ukraine could further harm the global economy.
U.S. exports to the European Union in February were down 2.5% from January, while exports to China were 4.6% lower.
"The recovery is taking hold, but is too slow," Christine Lagarde, managing director of the International Monetary Fund, said in a speech Wednesday. "Unless countries come together to take the right kind of policy measures, we could be facing years of slow and subpar growth."
U.S. adds 192,000 jobs in March; unemployment 6.7%
The U.S. created 192,000 jobs in March, and the unemployment rate was unchanged at 6.7%, the result of more than a half-million people joining the labor force in search of work, according to Labor Department figuresissued Friday. Economists surveyed by MarketWatch expected an increase of 200,000 nonfarm jobs. In March, hiring was strongest in the professional ranks and at bars and restaurants. Manufacturing shed 1,000 jobs but was the only sector to do so. Average hourly wages, meanwhile, dipped 1 cent to $24.30 after several strong gains. And the average workweek jumped 0.2 hours to 34.5 hours, matching a post-recession high. The labor-force participation rate moved up to 63.2% from 63%, as 503,000 people searched for work, a sign that they think more jobs are available. Employment gains for February and January were revised higher by a combined 37,000. The number of new jobs created in February was raised to 197,000 from 175,000, while January's figure was increased to 144,000 from 129,000.
Source: Marketwatch
Source: Marketwatch
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