“U.S. private employers added 169,000 jobs last month, the fewest since January 2014 and far below economists' expectations, a report by a payrolls processor showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 200,000 jobs.” Story at…
http://www.cnbc.com/id/102653003
PRODUCTIVITY FALLS (WSJ)
“U.S. worker productivity fell in the opening months of 2015, the latest sign of sluggish economic growth at the start of the year. The productivity of nonfarm workers, measured as the output of goods and services per hour worked, decreased at a 1.9% seasonally adjusted annual rate in the first quarter from the previous period…” Story at…
http://www.wsj.com/articles/u-s-productivity-falls-1-9-in-first-quarter-1430915528
CRUDE INVENTORIES FALL (Business Insider)
“US oil inventories fell more than expected last week. The latest data from the Energy Information Administration showed that commercial crude inventories fell by 3.9 million barrels in the week ended May 1.” Story at… http://www.businessinsider.com/eia-weekly-crude-oil-inventories-may-6-2015-5#ixzz3ZNKofsys
MARKET REPORT
- Wednesday, the S&P 500 was down about 0.5% to 2080 at the close. It could have been a lot worse; the Index was down close to 1% around 3PM. The late day buying was a bit of good news.
-VIX was up about 6% to 15.15.
-The yield on the 10-year Treasury Note rose to 2.24%.
The S&P 500 closed around the lower trend line, about 0.4% below the 50-day moving average and 2.5% above the 200-day moving average. If recent history is a guide (say over the past month or so) the Index should bounce up from here. That may be wishful thinking; the trend in market internals is down and that is not a good sign. With the 200-dMA only 2.5% down from Wednesday’s close, damage may be limited. I hate to keep saying this, but tomorrow is an important day. More moves down could indicate a correction.
It is odd to be writing about a correction when the Index is only 1.8% below its high, but that is a current risk.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 45% at the close Wednesday. (A number below 50% is usually BAD news for the markets.) New-lows outpaced New-highs Wednesday. The spread (new-highs minus new-lows) was minus-55. (It was -16 Tuesday.) The 10-day moving average of change in the spread fell to minus-12. In other words, over the last 10-days, on average; the spread has fallen by 12 each day.
Internals switched to negative on the markets. Now the internals are suggesting a correction. Repeating: I hate to keep saying this, but tomorrow is another important day.
Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late. They are most useful when they diverge from the Index. In 2014, using these internals alone would have made a 9% return vs. 13% for the S&P 500 (in on Positive out on Negative – no shorting). Of course, few trend-following systems will do well in an extreme low-volatility, nearly straight-up year like 2014.
NTSM
Wednesday, the NTSM analysis remained HOLD. PRICE, VOLUME, VIX and SENTIMENT indicators are neutral, although (as always) sentiment remains extremely high.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested, mostly in smaller
cap-stocks in the long-term portfolio with some international stocks. 50% is
conservative, but appropriate for a conservative retired guy. The Dow Jones US Completion Index (all stocks except the S&P 500 – the “S” fund in the TSP) continues to outperform the S&P 500. Since 1 February it is 2% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 3.1% ahead of the S&P 500.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My TSP Allocation: 50%-G; 10%-C; 25%-S; 15%-I. (50% cash is too high for non-retirees, however, the “G”-fund did return 2.2% over the last 12-months and that is exceptional for risk-free money.)
