Weekly Update - March 09, 2018
- The S&P 500, Dow Jones and Nasdaq all finished the week higher. Oil and gold dipped and the 10-year U.S. Treasury note finished the period at approximately 2.90%.
- President Trump signed steel and aluminum tariffs into law, applying a 25% tariff on imported steel and a 10% tariff on imported aluminum. Mexico and Canada will be exempt, indefinitely, but this could be dependent on the outcome of NAFTA negotiations.
- There was some press during the week that downplayed concerns over a trade war. A New York Times Upshot column said that despite the hawkish rhetoric, the administration is acting within the rules of global trade, citing carve-outs for Canada and Mexico, and progress in the last round of NAFTA negotiations. A Bloomberg article noted that an importer can ask the Commerce Department for a waiver if there is a limited supply of the product in the U.S. or if national security is at stake. The article cited representatives from the can, automobile and pipeline industries, who are all building their case on why they should receive tariff exemptions.
- The Federal Reserve released its Beige Book, which reported all districts seeing modest-to-moderate expansion. The report noted that most districts saw employers raising wages and expanding benefit packages, and prices increasing in all districts, notably in steel, transportation and building materials.
- The nonfarm payrolls report showed an increase of 313K jobs in February, ahead of estimates of 200K. The prior two months were also revised higher by 54K. The unemployment rate was unchanged at 4.1% (for the fifth straight month), vs. a consensus of 4.0%.
- Average hourly earnings was the most eagerly anticipated number of the report, though the +0.1% print was below expectations of +0.3%. The average hourly wage increase of 2.6% year-to-year was also below estimates of a 2.8% increase.
- Private-sector employment was up 235K, better than the consensus 195K. January was revised up 10K to 244K, and December was revised up 7K to 249K.
- ISM non-manufacturing for February hit 59.5, beating expectations of 58.5. However, this is down from January’s print of 59.9. New orders were stronger at 64.8, up from last month’s 62.7.