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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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The Week In Review

9/5/14

The stock market finished a cautious week on a modestly higher note. The S&P 500 added 0.5%, ending the week with a slim gain of 0.2%, while the Russell 2000 (+0.3%) shed 0.2% for the week.

This morning, the Nonfarm Payrolls report for August revealed the addition of 142,000 payrolls, while the Briefing.com consensus expected a reading closer to 223,000. Interestingly, this was followed by a rally in equity futures with investors viewing the report as an argument in favor of the Fed potentially delaying its first rate hike.

Equity indices slipped from their opening levels, but the S&P 500 found support near the 1990 mark, which served as resistance in July and provided support over the past two weeks. The benchmark index tested the area around 10:45 ET and spent the remainder of the session in a slow climb to new highs.

All ten sectors finished in the green, but health care (+0.6%) contributed to the opening weakness. The countercyclical sector was pressured by Gilead Sciences (GILD 105.36, -1.50) in the early going with the stock down 8.7% at its worst point of the session. Shares of GILD narrowed their loss to 1.4% by the close, while the iShares Nasdaq Biotechnology ETF (IBB 270.60, -0.32) shed 0.1% after being down as much as 2.0%. Furthermore, the ETF logged its fourth consecutive decline, ending the week lower by 2.2%.

The underperformance of the biotech space kept the Nasdaq Composite behind the S&P 500, but the tech-heavy Nasdaq still drew a good bit of strength from the technology sector (+0.7%), which outperformed throughout the day. Components of all sizes contributed to the advance with Apple (AAPL 98.97, +0.85), Facebook (FB 77.26, +1.31), and Microsoft (MSFT 45.90, +0.64) gaining between 0.9% and 1.7%. High-beta chipmakers also displayed strength with the PHLX Semiconductor Index climbing 0.9%.

Even though technology spent the day in the green, it was the utilities sector (+1.2%) that finished in the lead.

Treasuries rallied following today's Nonfarm Payrolls report, but surrendered all of their gains during the day. The 10-yr yield ended at 2.45%.

Participation was below average with roughly 600 million shares changing hands at the NYSE.

Taking a closer look at the details of today's jobs report:

Nonfarm payrolls increased by 142,000 (Briefing.com consensus 223,000)
July nonfarm payrolls revised to 212,000 from 209,000
June nonfarm payrolls revised to 267,000 from 298,000
Private sector payrolls increased by 134,000 (Briefing.com consensus 200,000)
July private payrolls revised to 213,000 from 198,000
June private payrolls revised to 260,000 from 270,000
Unemployment rate was 6.1% (Briefing.com consensus 6.1%) versus 6.2% in July
Average hourly earnings rose 0.2% (Briefing.com consensus 0.2%) after being unchanged in July
The average workweek was 34.5 hours (Briefing.com consensus 34.5) for the sixth consecutive month
The labor force participation rate was 62.8% versus 62.9% in July
Monday's economic data will be limited to the Consumer Credit report for July (Briefing.com consensus $17.80 billion), which will cross the wires at 15:00 ET.

Nasdaq Composite +9.7% YTD
S&P 500 +8.6% YTD
Dow Jones Industrial Average +3.4% YTD
Russell 2000 +0.6% YTD
Week in Review: September Begins on Quiet Note

On Tuesday, the market started the abbreviated week on a mixed note with modest point changes on either side of the unchanged mark for the major indices. For the most part, the stock market was a sideshow. The main trading events were seen in the commodity and Treasury markets, both of which saw some decent-sized losses within their respective complex. Dollar strength was at the heart of the weakness in the commodity arena, which saw a 4.2% drop in natural gas futures to $3.90/btu, a 3.1% decline in oil prices to $92.96/bbl, and a 1.7% slide in gold prices to $1266.10/troy ounce. The US Dollar Index increased 0.3% to 82.99 -- a 13-month high -- as the yen hit its weakest level (105.15) against the greenback since January.

The stock market had difficulty getting anything going on Wednesday as a wait-and-see stance permeated the trading action. That was understandable given some confusing headlines about cease-fire talk between Ukraine and Russia, Apple suffering a 4.2% decline in its stock price, and the specter of policy meetings by the Bank of Japan, the Bank of England, and the ECB on Thursday. The way things ended on Wednesday was pretty much how they went throughout the day. That is, the Dow (+0.1%) and S&P 500 (-0.1%) held up better than the Nasdaq Composite (-0.6%) and Russell 2000 (-0.6%). Things sounded more promising before the open when there was talk of a "permanent" cease-fire agreement between Ukraine and Russia. However, Kremlin countered that it could not have agreed to such a thing when it is not a party to the conflict in eastern Ukraine.

Equities finished Thursday on a modestly lower note following a daylong retreat from the opening high. The S&P 500 shed 0.2%, while the Russell 2000 (-0.4%) settled behind the benchmark index. Overnight, the Bank of Japan and the Bank of England made no changes to their policy stances, while the European Central Bank announced a rate cut. The ECB lowered its main refinance rate to 0.05% from 0.15%, cut its deposit facility rate to -0.2% from -0.1%, and cut the marginal lending rate to 0.3% from 0.4%. In addition to the cuts, the central bank announced the deployment of an asset-backed securities purchase program, but it was revealed that the decision was not unanimous. The policy move pressured the euro, sending the single currency to its lowest level since July of last year.