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Weekly Market Update – May 6, 2016

The Dow finished up 80 points on Friday after the Labor Department reported the slowest pace of job creation since September, reducing the likelihood of a June interest rate hike. For the week the Dow was down 0.2% and year-to-date the index is 1.8% higher.

Non-farm payrolls surprised to the downside on Friday with a weaker gain than the consensus: Employers added 160,000 jobs in April, a smaller increase than the 202,000 jobs expected by economists. However, unemployment rate still held steady at 5%. Initial jobless claims rose to 274,000 last week, ahead of consensus but remaining near long-term lows. Average hourly earnings increased slightly, as well as the average work week. Global growth concerns were in focus this week following a surprise interest rate cut in Australia, weaker manufacturing data out of China and the UK, and disappointing European bank earnings. Due to lower probability of a rate hike, yields on 10-Year Treasury note declined 6 basis points to 1.77%.

Crude oil rebounded towards the end of the week, ending at $44.66 per barrel on the news of supply disruptions. A massive wildfire continued to spread near the Athabasca oil sands in Alberta, Canada, which results in a production decrease of 720,000 barrels per day. The standoff between Libya’s Eastern and Western factions prevented crude loadings at the Marsa al-Hariga port, shutting in 120,000 barrels per day. Nigeria’s recent militant attacks also reduced the country’s crude production. The next OPEC meeting will be hosted on Jun 2, 2016.

Next week’s economic calendar highlights include Crude Inventories (May 11th), Initial Jobless Claims (May 12th), Core PPI (May 13th).

Have a good weekend,

Natalie Do

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Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464