Stocks today finished a relatively flat week with the Dow closing up 55 points to 21,006. Trading volume was weaker than a kitten. For the week the Dow eked out a gain of 0.25%. Elections in France will occur this weekend and the pols predict a big win for centrist candidate Macron which is helping stabilize markets in the eurozone. Warren Buffet will also host the Berkshire annual meeting in Omaha. I wonder if he will bring in Payton Manning to yell “Omaha” a couple of times to start the meeting.
The labor report for April showed an increase of 211,000 jobs and a nice rebound from the lull that occurred in March. The gurus were expecting a reading of about 185k jobs. The unemployment rate fell to 4.4% and workers in the labor force grew by 1.7 million. While the labor force participation rate remains low it is no longer declining. The number of hours worked grew by 0.5% and the average hourly earnings rose 0.3% pushing total earnings to the highest level in 7 months. This report sends a strong signal that the Federal Reserve Board is cleared for takeoff and can move full speed ahead with another rate hike in June.
The price of oil rebounded after yesterday’s shellacking. While the price of oil has suddenly dropped the important metric is the “expectation” of where oil will be priced in a month or so and no one expects it to stay this low for very long. OPEC will meet in June and will most likely continue the production cut program which should boost prices and offset the effects of US production and high levels of oil in storage. WTI crude closed up 1.8% to $46.34 a barrel. Oil was off over 6% for the week. Natural gas was up 2.5% to $3.22 per MBTUs.