Happy Mother’s Day and The Market Update May 15

 

Thoughts to Ponder . . .

• At the end of the day life should ask us “Are you sure you want to save the changes?”
• You already know something you don’t even know that you know.
• Always have something beautiful in sight, even if it’s only a poster on a wall.
• My mind not only wanders, sometimes it leaves completely!
• My hobbies include eating and complaining that I’ve gained too much weight.

 

And Now for the Market Update . . .

A week with few surprises on the economic front had some investors making the decision to cash out their profits from the recent stock market rally.

• With the Dow Jones Industrial Average poised to finish the week down around 200 points, it seems that the major driver of the decline was more profit taking than anything else.

 

The report on Job Openings and Labor Turnover (JOLTS) shows there are plenty of help-wanted signs to be seen, however there appears to be a limited number of qualified applicants to fill these open positions.

• With unemployment at one of the lowest points in history, it is becoming harder and harder for employers to attract the right talent.
• More employees are changing companies than in recent past as confidence in the economy continues to slowly improve.
• However, with unemployment so low, the cost to employers to attract qualified talent is increasing.

 

First time jobless claims remain at historical lows with the latest report showing only 236,000 claims were filed last week.

• 300,000 is considered the benchmark number as to where concerns around the job market might appear.
• The low numbers of claims validates the JOLTS report as to why employers are struggling to find the right talent to fill their open positions.

 

While March was an unusually weak month for inflation, April appears to be showing the exact opposite.

• The Producer Price Index rose a higher than expected 0.5 percent.
• Analysts were expecting only a 0.3 percent increase in wholesale prices.
• When you exclude the volatile food and energy sectors, prices rose 0.4 percent which places wholesale inflation on an annual rate of just under 5.0 percent.
• The likelihood of this number remaining at this level is extremely low, however it is important to note that this is one of the highest readings on wholesale price increases since 2007.
• A factor in the price growth is related to the recent Fed increase in interest rates.

 

Finally, consumer confidence readings are beginning to move back from their highs.

• The consumer comfort index remains very strong at a reading of 49.7, however this is a decline of 1.2 points from the previous month.
• Confidence continues to point to strength in employment.

 

This week’s potential market moving reports are:

• Monday May 15^th – Housing Market Index
• Tuesday May 16^th – Housing Starts, Industrial Production
• Wednesday May 17^th – MBA Applications
• Thursday May 18^th – First Time Jobless Claims, Leading Economic Indicators
• Friday May 19^th – St. Louis Fed Reserve Bank President Speaks