November 3, 2017
The October employment report came in as billed with payroll growth rising strongly, to 261,000 vs a hurricane-depressed 18,000 in September, but with average hourly earnings dead flat following two 0.5 percent gains in the prior three months. But earnings may be moving higher based on the unemployment rate which is at a 17-year low of 4.1 percent.
Stocks remain very strong with the Dow up 0.4 percent to end the week at a new record of 23,539. Year-to-date, the Dow is up 19.1 percent. Stocks may be pointing to economic strength but the signal from the bond market may be one of slowing as the yield curve continues to flatten with the 2-year up 3 basis points in the week to 1.62 percent but the 10-year down a sizable 9 basis points to 2.33 percent. Oil had a strong week, up 3.1 percent to $55.70.