We did it!
The Dow moved into positive territory for the year after what’s been a tumultuous few months for the markets. The benchmark S&P 500 is still about 3 points off turning positive for the year.
The move higher in stocks follows Wednesday’s Federal Reserve meeting where the central bank pared its forecast for rate interest rate increases this year.
First, the scoreboard:
- Dow: 17,488, +162, (+0.9%)
- S&P 500: 2,041, +14, (+0.7%)
- Nasdaq: 4,778, +15, (+0.3%)
- WTI crude oil: $40.10, +4.2%
It’s a busy week for US economic data and while the week’s marquee event happened on Wednesday, Thursday morning saw readings on manufacturing activity and two readings on the labour market cross the tape.
The Philadelphia Federal Reserve’s latest manufacturing activity index hit 12.4 for March, way better than the -1.5 that was expected by economists and marking the first time in seven months the index registered a positive reading. Inside the report, the new orders index jumped significantly higher and 46% of firms responding to survey said they planned to increase spending over last year.
“It is unclear exactly why there was such a significant shift in activity between February and March, but the improvement supports our view that we are moving past the weakest period for the manufacturing sector,” said JP Morgan’s Daniel Silver in a note following the release.
“It is likely that we are now past the biggest drags from the stronger dollar and inventory correction.”
Meanwhile in the labour market the latest weekly report on initial jobless claims showed claims rose to 265,000 this week from the prior week’s 258,000. This was still below the 268,000 expected by economists.
The January JOLTS report, or Job Openings and Labour Turnover Survey, showed there were 5.54 million jobs available in January, indicating continued strength in the labour market as jobs remain abundant. The quits rate declined some in January however, a disappointment considering this rate — which is seen as a sign of worker confidence — ticked up in December and argued for a stronger, more dynamic US labour market.
In a filing Thursday morning, the industrial giant said sales in the first quarter will come in between $9.3 and $9.4 billion, way less than the $10.2 billion that was expected by analysts. Earnings should come in at around $0.65-$0.70 per share, less than the $0.95 expected by analysts.
Caterpillar has long been seen as a bellwether of economic activity given that its equipment is expensive, requiring a large investment from firms. If you’re buying Caterpillar stuff, in short, things are going well (is more or less the thinking).
A major impact on the company over the last couple years has been the strength of the dollar and the decline in oil prices, which have paralysed activity in the industrial sector.
Here’s a handy slide from the company outlining everything crushing the company:
In a statement on Thursday the company said its current generation of orcas will be the last in the care of the company.
As Bob Bryan notes, this move comes after years of scrutiny about the company’s treatment of animals, which came to a head in 2013 with the release of the documentary “Blackfish.”
Now, the company’s park does have other stuff to offer guests aside from Orca performances, but basically the next few decades will see its signature attraction eventually wind down and cease to exist.
Shares of the company gained over 9% on Thursday.
“As society’s understanding of orcas continues to change, SeaWorld is changing with it,” CEO Joel Manby said in the release.
“By making this the last generation of orcas in our care and reimagining how guests will encounter these beautiful animals, we are fulfilling our mission of providing visitors to our parks with experiences that matter.”