Chief Economist Scott Brown discusses the latest market data.
Despite omicron disruptions, nonfarm payrolls posted a 467,000 seasonally adjusted gain in January. Annual benchmark revisions shifted job growth around in 2021 and showed a much stronger near-term trend. Average hourly earnings rose 0.7% (+5.7% y/y). The unemployment rate edged up to 4.0% (from 3.9%), reflecting a pickup in labor force participation (concentrated among teenagers and those over 54, which seems like noise). Details of the household survey data showed that 2.3% of those with jobs could not work due to illness during the survey week – that’s huge. (It was 1.0% in the delta wave.)
Job openings rebounded to 10.9 million at the end of December, still elevated. The ISM Manufacturing Index edged down to 57.6 in January (from 58.8 in December), while the Services Index fell to 59.9 (vs. 62.3) – both reports were consistent with moderate growth but restrained by ongoing supply chain and COVID-19 issues. Unit motor vehicle sales rose to a 15.0 million seasonally adjusted annual rate in January (vs. 12.5 million in December), but the total was exaggerated by the seasonal adjustment. (Unadjusted sales were down 25% from a year ago, reflecting ongoing production constraints.) Jobless claims fell to 238,000 in the week ending January 29, following a COVID-19-related rise in the early weeks of the year.
Next week: One shouldn’t make too much of any particular data report, but the January job market data put a 50-basis-point hike on the table for the March 15 to 16 Federal Reserve policy meeting. This week’s inflation data will be important.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Last||1 year ago|
|Last||1 year ago|
|Dollars per British Pound||1.360||1.365|
|Dollars per Euro||1.144||1.204|
|Japanese Yen per Dollar||114.960||105.030|
|Canadian Dollars per Dollar||1.268||1.279|
|Mexican Peso per Dollar||20.551||20.195|
|Last||1 year ago|
|Last||1 month ago|
|10-year municipal (TEY)||2.25||1.63|
Treasury Yield Curve – 2/4/2022
As of close of business 2/3/2022
S&P Sector Performance (YTD) – 2/4/2022
|February 8||—||Trade Balance (December)|
|February 10||—||Jobless Claims (week ending February 5)|
|—||Consumer Price Index (January)|
|February 11||—||CARTS data (January 15-31)|
|—||UM Consumer Sentiment (mid-February)|
|February 15||—||Producer Price Index (January)|
|February 16||—||Retail Sales (January)|
|—||Industrial Production (January)|
|—||FOMC Minutes (January 25-26)|
|February 17||—||Building Permits, Housing Starts (January)|
|February 21||—||Presidents Day Holiday (markets closed)|
|March 4||—||Employment Report (February)|
|March 16||—||FOMC policy decision|
|May 4||—||FOMC policy decision|
All expressions of opinion reflect the judgment of the author and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.
The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.
Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business February 3, 2022.
Markets & Investing September 22, 2023 Review the latest Weekly Headings by CIO Larry Adam. Key...