The Jordan, Knauff & Company (JKC) Valve Stock Index was down 4.5 percent over the last 12 months, below the broader S&P 500 Index which was up 2.7 percent. The JKC Pump Stock Index was down 22.1 percent for the same time period.

 

Figure 1. Stock Indices from May 1, 2011 to April 30, 2012
Source: Capital IQ and JKC research. Local currency converted to USD using historical spot rates. The JKC Pump and Valve Stock Indices include a select list of publicly-traded companies involved in the pump and valve industries weighted by market capitalization. 

  

The Institute for Supply Management’s Purchasing Managers Index (PMI) registered 54.8 percent, an increase of 1.4 percentage points over March. New orders, production and employment indices all increased, indicating growth at faster rates than in March. New export orders, an important component of the PMI, continued to expand, highlighting the revival in U.S. manufacturing exports. The improvement in manufacturing was broad based, with 16 of 18 sectors reporting expansion, one remaining stable and one reporting a contraction.

 

Figure 2. U.S. Energy Consumption and Rig Counts
 Source: U.S. Energy Information Administration and Baker Hughes Inc.

  

The Bureau of Economic Analysis reported that U.S. economic growth slowed to a rate of 2.2 percent in the first quarter of 2012, down 3 percent from the last three months of 2011. Consumers were one of the main drivers of activity as real personal consumption expenditures rose 2.9 percent, the strongest growth rate in five quarters. This solid gain in consumer expenditure was driven by a 15.3 percent rise in spending on durable goods. Overall, U.S. worker productivity dropped by 0.5 percent during the first quarter. However, productivity in the manufacturing sector increased 5.9 percent. 

U.S. employment rose by 115,000 jobs in April. The unemployment rate edged down to 8.1 percent, largely due to a decrease in labor force participation.

Crude oil prices declined in April because global liquids supply outpaced consumption by 0.6 million barrels per day in the first quarter of 2012 leading to global inventory builds. The U.S. Energy Information Administration (EIA) expects the price of West Texas Intermediate crude oil to average approximately $104 per barrel in 2012.

Baker Hughes reported that worldwide rig counts fell almost 10 percent in April compared to March but were up about 6.5 percent over April 2011 levels. Rig counts in the U.S. were down slightly over March but up almost 10 percent over April 2011.

On Wall Street, despite positive earnings reports from several blue chip companies, the market could not keep its momentum into April. After four months of gains, the S&P 500 Index fell 0.8 percent. The Dow Jones Industrial Average narrowly avoided its first monthly loss since September. News that Spain’s economy entered another recession renewed worries about the fragility of Europe’s finances.

 

Figure 3. U.S. PMI Index and Manufacturing Shipments
 
 Source: Institute for Supply Management Manufacturing Report on Business® and U.S. Census Bureau.