Wall Street Pump & Valve Industry Watch: February 2014

The Jordan, Knauff & Company (JKC) Valve Stock Index was up 25.4 percent during the last 12 months, comparable to the broader S&P 500 Index, up 26.4 percent. The JKC Pump Stock Index was up 34.9 percent.¹ Despite a slight decline in the Institute for Supply Management’s Purchasing Managers’ Index (PMI) to 57.0 percent in December from 57.3 percent in November, manufacturing ended 2013 with expanding activity for seven straight months. The PMI survey averaged 56.3 percent for the second half of 2013, compared to the 51.5 percent average at the beginning of the year. The Federal Reserve reported that U.S. industrial production—which measures the output of manufacturers, utilities and mines—jumped a seasonally adjusted 1.1 percent in November over the previous month, putting the index above the prerecession peak set in December 2007. Manufacturing, which is the largest component of the index, remains below its prerecession peak. U.S. gross domestic product (GDP) grew at a 4.1 percent annual pace in the third quarter of 2013, up from the 2.5 percent reading in the second quarter and the best reading since the fourth quarter 2011. Increases in consumer spending and business investments in commercial real estate, industrial equipment and intellectual property helped boost the number. Fourth quarter GDP numbers are expected to be slightly weaker.

The U.S. Energy Information Administration forecasts that the year-over-year growth in liquid fuels production from countries outside OPEC will reach a record 1.9 million barrels per day (bpd) this year and slow to 1.5 million bpd in 2015. Non-OPEC production grew by 1.4 million bpd in 2013, exceeding 55 million bpd by the end of 2013. Production from the U.S. is expected to grow by an annual average of 0.98 million bpd during the next two years. In Canada the increase is expected to be 0.25 million bpd, with an increase of 0.15 million bpd in Brazil. On Wall Street, U.S. stocks rose for the fourth month in a row and closed 2013 with broad gains despite a federal government shutdown and worries of a coming reduction in the Federal Reserve stimulus program. The Dow Jones Industrial Average rose 26.5 percent, its best performance since 1995. The S&P 500 Index gained 29.6 percent, while the NASDAQ Composite Index was up 38.3 percent. In Europe, the stimulus policies of global central banks as well as the improvement in the economy boosted the Stoxx Europe 600 index 17 percent during the year. Asian stock markets were mixed. China’s Shanghai Composite lost 6.7 percent and Japan’s Nikkei Stock Average rose 57 percent.

Reference

1. The S&P Return figures are provided by Capital IQ.