Stocks went nowhere on the last full trading ahead of the holiday-shortened week, but by virtue of closing with gains, the Dow and S&P 500 each made new all-time closing highs.
First, the scoreboard
- Dow: 16,976.24, +20.2, (+0.1%)
- S&P 500: 1,974.62, +1.3, (+0.07%)
- Nasdaq: 4,457.73, -1, (-0.02%)
And now, the top stories of the day:
1) ADP said private payrolls climbed 281,000, the biggest increase since November 2012. Economists were expected additions of 205,000, up from May’s gain of 179,000. Following the report, Ian Shepherdson at Pantheon Macro said, “In one line: Looks great but ADP’s predictive powers are very limited.” Shepherdson added that, “Still, this is a bigger rebound than we expected. It does not change our payroll forecast, though, which remains at a decent but unspectacular 200K. We worry that the seasonal factors in the official data — which are entirely separate from those used by ADP — were too generous in June last year and will now correct. Any hit will be temporary, though; the labour market is improving steadily despite the short-term noise.” Following the report, Chris Rupkey at Bank of Tokyo-Mitsubishi said, “The economy has big momentum going for it now as uncertainty over the outlook diminishes.”
2) U.S. factory orders for May fell 0.5%, worse than expectations for a decline of 0.3%. This was the final economic data report before the jobs report, set for release at 8:30 am EST tomorrow morning. At the same time as the jobs report, we’ll also get weekly initial jobless claims and the balance of trade report for May.
3) Federal Reserve Chair Janet Yellen spoke in front of the IMF in Washington, and said she sees, “pockets of increased risk-taking across the financial system.” Among other things, BI’s Rob Wile noted that Yellen said, “credit levels do not suggest borrowers are taking on excessive debt, and that improved capital and liquidity positions at lending institutions should ensure resilience against potential losses due to their exposures.” Yellen also said that monetary policy faces limitations as a tool used to promote financial stability.
4) In corporate news, Tyson Foods and Hillshire Brands reached a definitive merger agreement under which Tyson will acquire Hillshire for $US8.55 billion, or $US63 per share. The agreement also includes Tyson paying $US163 million to Pinnacle Foods as part of that company’s dissolved merger agreement with Hillshire.
5) GoPro lost more than 12%, the first negative day for the wearable camera maker since its debut last Thursday. The tumble in GoPro comes after yesterday the stock traded above $US48, or more than double its $US24 IPO price. Karl Loomes, a market analyst with SunGard’s Astec Analytics, said data showed that short sellers are beginning to circle GoPro. Loomes noted that most all of the shares available for borrow to be shorted have been spoken for.
6) On Friday, the government auctioned off 30,000 Bitcoins, which were all purchased by legendary VC investor Tim Draper. At current Bitcoin prices of around $US640, Draper’s haul is worth about $US19 million.
7) A new research note from Morgan Stanley’s Adam Jonas said that despite its massive recalls, General Motors sales have been increasing because, Parker writes, dealers flooded with customers bringing in recalled cars have lead to new sales when there normally wouldn’t be.