Stocks were mixed as todays jobs data was disappointing. Market leadership continued to shift from software and drug makers to energy, gold and materials. The Dow closed the day up 79 at 17,740 on lighter trading volume. For the week the Dow fell three tenths of a point.
The April jobs report came in and was bad……yet good. The bad part was that the US only added 160,000 jobs in April which was well below the 200,000 expected. Moreover, revisions to prior months also brought down the monthly average jobs figure for 2016 to 192,000. On the good side, unemployment held steady at 5% and wages were up 0.3% bringing the annual wage growth figure to 2.5%. These conflicting figures within the report makes it harder for the Federal Reserve to decide on a rate hike (or not) in June. Markets today tell us the odds of a rate hike are lower due to the weak jobs number but May’s report next month might reverse that notion.
WTI crude rose after Baker Hughes reported the number of oil rigs fell by 4 to 328 (it was 668 this time last year) and Canadian oil sands production fell by a third plus an attack today on a Chevron platform in Nigeria by the “Niger Delta Avengers” is hurting production in Africa’s second largest oil producer. While the global oversupply problem still exists markets appear to be trading more in line with future expectations of growing demand. WTI closed up a half point at $44.55 a barrel.
Gold continued its rise after the jobs report and the increasing odds that the Fed will not raise interest rates in June. Gold, when viewed as a global currency, does not have the counter party risk associated with paper money which may lose value thanks to bad monetary policy. Gold closed up $18.40 an ounce to $1,290.