The first full trading week in May was another consequential one with several key reports being released.
On Tuesday, the ISM Services report and the JOLTS jobs reports were released. The ISM Services report came in at 53.6, which was just a shade below the projected 53.7 prior to the release. Meanwhile, the JOLTS report was also close to matching analyst expectations as it revealed that there were 6.87 million openings in the United States compared to an expected 6.86 million.
On Wednesday, the ADP’s version of the nonfarm payroll report came out. It found the economy added 109,000 jobs in April, which was lower than the expected 118,000. However, it was higher than the March reading of 61,000.
Thursday saw the reveal of the unemployment claims data for the past seven days. During that time, there were 200,000 requests for benefits, which was about 10,000 higher than last week. Of course, that reading was one of the lowest since the 1960s, so it’s not surprising that there would be an uptick.
On Friday, the BLS sent out its version of the nonfarm payroll report. In April, the economy added 115,000 compared to an expected 65,000. In addition, the March figure was revised upward to 185,000 from 165,000. The unemployment rate remained steady at 4.3 percent while average hourly earnings were up .2 percent on a monthly basis compared to an expected increase of .3 percent.
The consumer sentiment report from the University of Michigan also came out Friday and found that sentiment was the lowest on record. In April, sentiment dropped to 48.2 percent compared to an expected 49.7. Inflation expectations came in at 4.5 percent, which means that respondents think the inflation rate will be 4.5 percent in 12 months.
The S&P 500 had another winning week finishing up 2.4 percent to close at 7.398 at the end of day Friday. On Monday afternoon, the market made a weekly low of 7,182 before reversing and gaining ground for the remaining four days. It would make a high of 7,399 on Friday afternoon before easing ever so slightly into the close.
The Dow was also up this week, gaining 254 points to close at 49,606 on Friday. This was an increase of 0.5 percent for the index that is up more than 6 percent since the first week of April. Over the last five days, the market made a low of 48,941 on Monday morning and a high of 50,051 on Thursday morning.
Finally, the Nasdaq was up more than 4.5 percent this week to close at 26,247. This was an increase of 1,134 points for an index that is up over 4,000 points during the mini-rally that has existed since the beginning of April. Over the last five days, the market made a low of 24,946 on Monday morning before reversing and closing at its high of the week.
In international news, Australia announced on Monday that it would raise its key interest rate to 4.35 percent from 4.1 percent. American investors should take this seriously as some within the Fed believe that there is room for an interest rate hike in the near future. Canada on Friday announced that its economy lost 17,700 jobs compared to an expected gain of about 12,000.
Next week will be another interesting one as inflation data is set to be released on Tuesday. There will also be a vote to confirm Kevin Warsh as the new leader of the Fed where he is expected to be confirmed without issue. Furthermore, the PPI reports for April are set to be released on Wednesday while retail sales data will come out on Thursday.