Pumps & Systems, March 2013
The Jordan, Knauff & Company (JKC) Valve Stock Index was up 10.4 percent over the last 12 months, below the broader S&P 500 Index, up 13.1 percent. The JKC Pump Stock Index was up 6.7 percent for the same time period.1
Manufacturing began 2013 on a positive note. In January, the Institute for Supply Management’s Purchasing Managers’ Index (PMI) increased 2.9 percent over December to reach 53.1 percent, the highest level since April 2012. All five PMI component indexes—new orders, production, employment, supplier deliveries and inventories—registered growth in January. Most important, the index for new orders moved from contraction at 49.7 percent in December to slight growth at 53.3 percent.
The Commerce Department reported that shipments of manufactured durable goods increased $2.6 billion (1.1 percent) to $230.1 billion in December. This followed a 1.8 percent November increase.
Figure 1. Stock Indices from Feb. 1, 2012, to Jan. 31, 2013
Figure 2. U.S. Energy Consumption and Rig Counts
Figure 3. U.S. PMI Index and Manufacturing Shipments
Total, nonfarm payroll employment increased by 157,000 jobs in January according to the U.S. Bureau of Labor Statistics. Employment numbers for November were revised from 161,000 to 247,000 jobs, while the numbers for December were revised from 155,000 to 196,000 additional jobs. Including these revisions, nonfarm payrolls rose 2.2 million in 2012, roughly 180,000 per month. Manufacturing employment was essentially unchanged in January and has changed little since July. Job gains in January occurred in retail trade, construction, health care, and wholesale trade.
Due to ongoing activity in onshore basins, the U.S. Energy Information Administration (EIA) expects U.S. crude oil production to continue its growth during the next two years. Increasing from an average of 6.4 million barrels per day (bpd) in 2012, the EIA predicts that crude oil production will average 7.3 million bpd in 2013 and 7.9 million bpd in 2014. Drilling in tight oil plays in the Williston, Western Gulf and Permian Basins will account for most of the forecasted growth, with the Western Gulf Basin accounting for more than half the onshore domestic liquid production growth. The Williston Basin’s Bakken formation (North Dakota and Montana) and the Western Gulf Basin’s Eagle Ford formation (Texas) currently produce about two-thirds of the tight oil in the U.S.
On Wall Street, The Dow Jones Industrial Average had its largest January increase since 1994. Better-than-expected earnings for the fourth quarter combined with a brighter employment scenario and encouraging numbers from the housing sector boosted the markets. The Dow Jones Industrial Average increased 5.8 percent, the S&P 500 Index gained 5.1 percent and the NASDAQ Composite rose 4.1 percent in January. P&S
Reference
1 The S&P Return figures are provided by Capital IQ.
These materials were prepared for informational purposes from sources that are believed to be reliable but which could change without notice. Jordan, Knauff & Company and Pumps & Systems shall not in any way be liable for claims relating to these materials and makes no warranties, express or implied, or representations as to their accuracy or completeness or for errors or omissions contained herein. This information is not intended to be construed as tax, legal or investment advice. These materials do not constitute an offer to buy or sell any financial security or participate in any investment offering or deployment of capital.