Stocks ended the week on a strong note thanks to positive trade chatter, good earnings and a solid October jobs report. All three major US indexes are at or near record territory. The Dow was up 301 on heavy trading volume to close at 27,347. Industrial, energy and material stocks were market leaders while utility and defensive sectors lagged. For the week the Dow gained about 1.4%.
The October labor report came in much better than expected. Gurus had been looking for 85,000 new jobs and were surprised when the actual results showed an increase of 128,000. Adding to this upside shocker were upward revisions to prior months job counts. Civilian employment which includes small business startups grew 241,000. Analysts had expected a lower number because of the GM labor strike. The unemployment rate increased from 3.5% to 3.6% and the labor force participation rate increased to 63.3% which is the highest reading since 2013. Average hourly wages rose 0.2% and are up 3% from a year ago and total earnings are up 4.2% year over year which is enough to keep the US consumer in fat city for now.
The earnings reporting season so far is going better than expected. For the past three quarters earnings have been declining but consensus now says that Q3 results will mark a bottom and improvement is expected going forward. In earnings reports today shares of US Steel jumped after reporting results that, while they were ugly, were much better than expected and shed light on companies’ efforts to invest in modern plants as they phase out the blast furnaces of old.
The scouts head out on two hikes this weekend. As John Wayne would say “Well two hikes are better than one……wa ha!” The older scouts are doing a 12 miler in the North Cascades and the younger ones are hoofing it a couple miles on a less challenging hike. What is interesting is that with both the girls and boys now active in the troop we are seeing more involvement at the family level because it’s no longer just the son going on trips. Heck even the grand parents are joining the fray. The weather this weekend will be cold but there is no storm in the forecast.