Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended June 4, 2021. Note the week was shortened by the observance of Memorial Day.
The major global stock market indices were all positive last week with the S&P 500 rising 0.64%, the NASDAQ up 0.49%, international developed markets (MSCI: EAFE) adding 0.73% and the emerging markets (MSCI: EM) up 1.60%. (1)
Interest rates fell and bond prices rose last week with the aggregate bond index up 0.12%. (1) The yield on the benchmark 10-year treasury bonds declined 2 basis points to 1.56% following disappointing monthly employment numbers (see Economic Data below). (2)
Oil prices continued their gains last week and broke through $70 per barrel price intraday, hitting a 3-year high on Friday. It closed the week at $69.62 per barrel, up 4.1% for the week. (3)
For May 559,000 new non-farm jobs were created, below consensus estimates for the second consecutive month. The unemployment rate, however, fell to 5.8% based (0.3 percentage points) due to declining numbers of people available for work.4 This is likely impacted by ongoing supplementary unemployment insurance benefits and limited childcare outside the home (temporary conditions) as well as high rates of early retirements.
The purchasing-managers index of manufacturing rose again in May, to 61.2 versus 60.7 in April. It also was stronger than consensus expectations as demand boosted new orders. The report indicated that U.S. manufacturers are wrestling with record-long lead times, transportation bottlenecks, shortages of basic materials and workers related to the pandemic. (5)
The services index for May rose to 64.0, higher than the prior month and once again exceeded expectations. All 18 services industries reported growth in May. This marked the 12th consecutive month of gains. Employment growth slowed although business activity and new orders accelerated.6
Proprietary portfolio happenings:
Company News (7)
DocuSign Inc. (DOCU), a Core Select and G33 holding, reported quarterly revenues and earnings that beat expectations and management of this cloud-based e-signature software company guided full year earnings upward ahead of expectations. (8) Shares rose 15.68% for the week.
Suncor Energy (SU), a G40i holding, rose 11.12% last week following an investor analyst day at which management emphasized its earnings and cash flow growth potential as well as superior dividend growth rate on new, higher prices for oil. (9)
Did You Know? The pharmacist Dr. James Vernor of Detroit was working on a medicinal tonic of vanilla and spices with the addition of ginger to calm the stomach in 1862 when he was called to fight the Civil War. He left the blend in an oak barrel and upon his return found the aged beverage had a zesty, unique flavor. Vernor’s highly carbonated drink is still enjoyed and used to cure stomachaches, primarily in the Midwest. When mixed with vanilla ice cream, it becomes a “Boston Cooler” dessert.
(2) US Treasury
(7) All weekly changes in company stock prices: Yahoo Finance