Home
Our Services
Meet Our Team
Client Events
Special Events
Cambridge Investment Research

NelsonCorp In the Headlines
Team Recognition
Account Lookup
Newsletters
Stock Quotes
Financial Briefs
Financial Headlines
Articles Of Interest
Financial Calculators
Market Data Bank
Web Resources
Contact Us
Disclosure
Importance of
a CFP

Financial Headlines


More Articles  Printer Friendly Version

 

Stocks Surge 1.7% Friday As Tariff Fears Subside And New Jobs Surge

The Trump administration's tough talk on tariffs softened last week, and government reports on Friday showed job growth was booming in February while real-wages roared, capping a good week for the Standard & Poor's 500 with 1.7% surge on Friday that left stocks just 4% from their all-time high.

313,000 new jobs were added to the economy last month, when only about 200,000 were expected. In addition, the official unemployment rate stayed at 4.1%. That's the same it has been since October 2017, and the lowest it's been since December 2001, which capped the end of the longest expansion in post-War U.S. history, the boom of the 1990s.

Meanwhile, purchasing managers at large non-manufacturing companies - 86% of U.S. gross domestic product - continued to say they're experiencing near-record high levels of activity. The 59.5% reading in February for months has hovered at highs rarely reached.

In addition, this Institute of Supply Management index is comprised of 10 sub-indexes, among them is an index tracking new orders. The index of new orders measures money just about to be spent, making this a good forward-looking indicator. At 64.8%, new orders surged at non-manufacturing companies - the backbone of the United States.

It was last month's average hourly earnings surge - initially reported at 2.9% - that triggered February's stock market correction. The 2.9% initial report was revised down to 2.8% this past week, and the latest monthly report showed average hourly earnings grew in the 12-months through February by 2.6%. How good is that? Since the recession ended nine years ago, average hourly earnings grew 2% annually. Average hourly earnings are growing 30% faster in the past 12-months versus the nine-year average.

This chart, from an independent economist whose research we license, adjusts the government's monthly report on the average hourly earnings for inflation index used by the Federal Reserve to make policy decisions about interest rates. Real average hourly earnings are booming. Consumers, who account for 70% of U.S. economic activity, have more money in their pockets to spend.

The bull market began on March 9, 2009 and turned nine years old Friday and, with the S&P 500 closing at 2786.57, stocks are fully valued, which makes them susceptible to emotional swings on sentiment.

President Trump's tough talk on tariffs initially caused a plunge in stock prices, but a week after, exemptions were offered to allies and fears of a trade war subsided. Key economic fundamentals remain strong.


This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

Sources: BLS, BEA. Average hourly earnings through February 2018. Inflation data through January 2018. 1AHE includes 100% of non-farm private employees, and excludes benefits and employers' share of payroll taxes. 2Compound annual growth rate March 2006 through December 2008 = 3.4%; CAGR December 2008 through February 2018 = 2.0%. 2March 2006 average hourly earnings of $20.04 inflated by the personal consumption expenditures deflator (PCED). AHE adjusted by the personal consumption expenditures deflator.


Email this article to a friend


Index
Despite Distractions, Economic Data Boomed Last Week
Protect Yourself Against Spearphishing
Even The New York Times Gets Investment Facts Wrong Sometimes
First-Half Of 2018 Stock Investing Highlights
U.S. Leading Indicators Growth Rate Slowed In May; Should You Worry?
Signal To Noise Ratio Of U.S. Economy Is An Anomaly
Father's Day Financial Tip: Put Your Kids To Work
Is Economic Growth Sustainable?
How The New Small Business Tax Break Phases Out
Fed Shatters Conventional Economic Wisdom
Four New Signs Point To Economic Strength (2-Minute Read)
Are You Better Off Than 10 Years Ago?
CNN, CNBC, And WSJ Mislead Investors
10 Years Of Financial History And The Current Outlook In 2-Minutes
Lost In The Wild Headlines: A U.S. Economic Boom
Facts About The Recent Volatility And Fears Of A Trade War

This article was written by a professional financial journalist for NelsonCorp Wealth Management and is not intended as legal or investment advice.

©2018 Advisor Products Inc. All Rights Reserved.
Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC to residents of AK, AL, AR, AZ, CA, CO, FL, GA, HI, IA, IL, IN, KS, KY, LA, MA, MD, MI, MN, MO, MS, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, WA, WI.
Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.
Cambridge and NelsonCorp Wealth Management are not affiliated.