Market Action

• A poor jobs report on Friday sent shocks throughout markets around the globe. The dollar abruptly fell as skepticism renewed over the Fed raising rates at some point over the next two months. Bonds rallied and stocks fell on the day as well. Defensive areas of the market, such as Utilities and Consumer Staples, continue to exhibit strength compared to cyclical firms.
• OPEC failed to agree to any curbs in production. It was the first meeting of the cartel with Saudi Arabia’s new oil minister. Crude remains around the $50 level as outages in Canada, Nigeria and Venezuela have cut back on supplies.
• Japan is postponing an increase in its sales tax until 2019. The news elevates expectations of new stimulus measures from fiscal authorities later this year. It is the second time Japan has delayed its increase despite having the world’s heaviest debt burden.
• Australia’s Q1 GDP delivered a positive surprise. Growth of 3.1% is the fastest in over three years despite weakness in China, a major trade partner. The report likely will mean that the central bank keeps rates steady at their next meeting.
• Speaking of China, a wave of economic data renewed doubts about any sort of positive momentum. Manufacturing weakness continues in the country while the services sector is expanding at a slower pace, reaching a three month low.
• Consumer spending figures for the month of April were the strongest since August of 2009. While households continue to delever in the aftermath of the financial crisis, spending on durable goods and housing remains strong.
• The OECD lowered its forecast for global economic growth to 3.0% for 2016, down from 3.3%. The organization also lowered its outlook for future years and called on fiscal action to stimulate growth. In the U.S., the Atlanta Fed’s GDP tracker lowered its estimates for Q2 growth from 2.9% to 2.5%.

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