U.S. equities finished near the unchanged line in listless trading on Friday. The bulls recovered smartly from an overnight decline in the futures market after President Trump authorized a surprise cruise missile attack against a Syrian airbase. The strike was in retaliation for Assad’s alleged chemical weapons attack.
As the sun rose on the east coast, focused turned to the March non-farm employment report, which came in at a weaker-than-expected 98,000 versus the 180,000 that was expected. Yet the unemployment rate fell 0.2% to 4.5%, below expectations of 4.7% to hit the lowest level in nearly 10 years.
In the end, the Dow Jones Industrial Average lost a fraction, the S&P 500 lost a fraction, the Nasdaq Composite lost a fraction and the Russell 2000 gained a fraction. Treasury bonds ended lower, the dollar was stronger, gold gained 0.4% and oil rose for the fourth straight session for a 1% gain.
Consumer staples gained 0.3% to lead the pack while utilities were the laggards, down 0.5%. When two of the most boring sector groups in the market attracted the most attention, you know it was a slow day. Wal-Mart Stores Inc (NYSE:WMT) gained 2.1% on an upgrade from Telsey Advisory Group on the belief the company is regaining its physical retail dominance and demonstrating new prowess in e-commerce.
On the downside, Pandora Media Inc (NYSE:P) gained 4.5% on a Bloomberg report the company is looking to renegotiate its music rights terms with record labels in an effort to reach profitability.
Turning back to the jobs report, Deutsche Bank economist Joseph LaVorgna chalked up the disappointment to bad weather in March: 3.1 million people reported that could not work a full work week because of the weather, the highest reading for any March on record going back to 1976. Removing the impact of weather should add about 100,000 payrolls back to the total, in LaVorgna’s view, in-line with recent trends.
Indeed, the household employment survey (which wasn’t weather affected) posted its best result since February 2016.
Looking ahead, the economic calendar is relatively light with just updates on job openings and producer price inflation. Friday will be busier, with consumer price inflation and retail sales on the docket.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.