Receive Weekly Market Updates via Email


Weekly Market Update – June 5, 2015

The Dow fell 56 points Friday as a better-than-expected May jobs report increased the likelihood of an interest rate hike by the Fed later this year.  For the week the Dow fell .9% and for the year the index is now up .1%.

Friday’s May jobs report showed the addition of 280,000 jobs, the largest number registered so far this year.  The unemployment rate increased to 5.5% though mainly due to more people entering the labor force looking for work.  Hourly wages rose 2.3% from last year’s level, the biggest increase since August 2013.  The economic data firms the belief that the economic recovery is on track and that the softness exhibited in the first quarter was indeed related to temporary negative factors (adverse winter weather, the strong dollar, work stoppages, etc.).  Though the IMF this week urged the US to delay an interest rate increase until 2016, it is expected the Fed will begin to act perhaps as early as September and at the latest in December.

The yield on the 10-year Treasury rose 10 bps Friday to 2.40%, up 30 bps for the week and now up 23 bps for the year.  Through Thursday, June 4, our trust preferred portfolios were up approximately 3.5%, on average, versus .07% for the Barclays Aggregate Bond Index. 

Oil rose 1.95% to $59.13 Friday after the number of rigs drilling for oil fell for the 26th consecutive week according to the weekly drill rig report.  Oil production has yet to register as steep a decline as the rig count, but being a lagging indicator, production should soon begin to decrease, in turn helping oil prices recover.  OPEC met today and agreed to keep production level at 30 million barrels a day.

Next week’s economic calendar highlights include May retail sales and weekly jobless claims on Thursday and May inflation data and a consumer confidence reading on Friday.  Expect retail sales to show an uptick from April, weekly jobless claims to settle in the 270,000 – 280,000 range (from 276,000 this week), the inflation data to show a slight increase in prices and consumer confidence to increase from the prior reading.


Ulland Investment Advisors

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