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Global Market Wrap-Up - February 1, 2013

Friday, February 1, 2013
Mark Hanna
U.S. began February in much the same fashion as most of January - upward, despite a mixed economic news front. The S&P 500 added 1.0% and the NASDAQ 1.2%, even as the monthly jobless growth came in below expectations and the unemployment rate ticked up from 7.8% to 7.9%. Fed addicted traders were warmed by the fact the unemployment rate is NOT falling anywhere near the 6.5% target area that Ben Bernanke has indicated would be an area he might withdraw stimulus. A bit perverse but that is the current conditioning.
  • The U.S. economy added 157,000 jobs last month, fewer than the 180,000 economists were expecting,while the unemployment rate increased 0.1% to 7.9%. Annual government revisions showed that the economy added 335,000 more jobs in 2012 than originally reported. Retail led the way in January with 33,000 new jobs, while construction rose 28,000 and health care added 23,000.
  • A separate unemployment measure that also takes into account those who have quit looking for jobs as well as those working part-time for economic reasons remained unchanged at 14.4%.
  • The labor force participation rate was unchanged near 30-year lows at 63.6%.
In other economic data:
  • Construction spending rose 0.9% in December as warm weather in the north aided the ability for projects to be worked on.
  • The Institute for Supply Management's monthly manufacturing index rose to 53.1 in January, a sign that manufacturing sector is continuing to expand. Economists were expecting a reading of 50.5. Any reading over 50 indicates expansion.
Crude oil gained 0.3% to $97.77, gold added 0.5% to $1670.60, and silver jumped 1.9% to $31.96.

British and French markets gained 1.1% while German stocks rallied 0.7%.

Japan gained 0.5% while China advanced 1.4%. China released two sets of purchasing managers data:
  • The official purchasing managers index came in at 50.4 in January, slightly lower than December's 50.6 and below the 51.0 estimate. A reading above 50 indicates an expansion in manufacturing activity.
  • The final reading on HSBC's purchasing managers index—a survey that is more skewed towards smaller, private companies than the official reading—rose to a two-year high of 52.3 from a preliminary reading of 51.9, up from December's final reading of 51.5.