The markets exhibited very little volatility to round off the week.
First, the scoreboard:
- Dow: 16,408.5 (-16.3, -0.1%)
- S&P 500: 1,864.8 (+2.5, +0.1%)
- Nasdaq: 4,095.5, (+9.2, +0.2%)
And now the top stories:
- Initial weekly jobless claims climbed to just 304,000 from 302,000 a week ago. This was lower than the 315,000 expected by economists. This brought the four-week moving average down to 312,000, which is the lowest level since October 2007. "The lower claims reading during the April nonfarm payroll survey week suggests that labor markets should continue to strengthen during the month, with last month’s survey period claims reading coming in at a much higher 330K," said TD Securities Gennadiy Goldberg. "A similarly important development is this week’s 4 week moving average hitting a cycle low of 312K, suggesting sustained improvement in labor market dynamics and hinting at an April nonfarm payroll reading in the 175K-225K region."
- Continuing claims slipped to 2.739 million from 2.750 million a week ago. "We continue to note that the ongoing improvement in continuing claims remains encouraging amid more positive labor market dynamics, suggesting that workers are not simply leaving the labor force but likely finding gainful employment," said Goldberg.
- The Philadelphia Fed's Business Outlook Survey was much stronger than expected, with he headline index surging to 16.6 in April from 9.0 in March. The shipments, new orders, and employment indexes all showed increases. "Overall, the improvement in the Philly Fed survey, even when taken together with the weakness in the Empire State report (released earlier this week), is consistent with another rise in the national ISM manufacturing index," said Capital Economics' Amna Asaf. "Furthermore, echoing what we learnt from yesterday's Beige Book of anecdotal information from the Fed, it suggests that manufacturing activity is pulling out of its weather-induced slump."
- Earnings season continued today with investment banks Goldman Sachs and Morgan Stanley both announcing quarterly results that were much stronger than expected. Morgan Stanley managed to buck the Wall Street trend of weak trading activities by reporting strong growth in its fixed income and commodities trading division. "Results reflect strong performance in commodities and solid results in credit and securitized products, despite lower volumes across most fixed income businesses," said management. Morgan Stanley closed up 2.9%.
- Chipotle Mexican Grill reported strong sales, but earnings were a bit weak. Food price inflation ate into profit margins. "Food costs were 34.5% of revenue, an increase of 150 basis points driven by higher commodity costs," Chipotle management said. "Higher commodity costs were primarily driven by inflationary pressures in beef, avocados, and cheese prices." Chipotle closed down 5.9%.
- Don't Miss: How 9 Countries Saw Inflation Explode Into Hyperinflation »
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