Showing posts with label jobs. Show all posts
Showing posts with label jobs. Show all posts

Friday, February 7, 2020

Wuhan Flu Can't Stop Stocks; January Added 225,000 Jobs

Stocks made reasonable gains on Thursday in advance of the monthly non-farm payroll data released Friday prior to the market open.

The news was solid for US employment, as the Bureau of Labor Statistics (BLS) reported 225,000 new jobs in the month of January, far outpacing expectations of 165,000.

Entering into the job market in January were 500,000 looking for work, though not all of them found it. The influx of new job seekers boosted the jobless rate to 3.6 percent, from a 50-year low of 3.5 percent in December.

On mainland China, both the death count and number of new cases of coronavirus, or Wuhan Flu, as it is now becoming known more colloquially, continued to rise, but the Chinese government announced that the number of people under observation was declining. This, according to Chinese officials, is an important turning point in efforts to control the spread of the virus. How well that prediction works out for the country of 1.2 billion people remains to be seen.

The roller coaster ride that has recently been Tesla stock abated, at least for a day, with shares of the electric car company settling around a price of $750 per unit. Whether that level proves to be support or resistance is another guessing game. Many are still short the stock, believing that the company is built largely on sand and promises, while rumors of a secondary offering continue to swirl.

President Trump lambasted his foes and praised his friends in a pair of very pubic appearances on Thursday, the day after the Senate voted overwhelmingly (2/3rds vote needed) in favor of acquittal from the charges of impeachment leveled against him by a partisan, Democrat-led House of Representatives. At a prayer breakfast, Trump had no kind words for Speaker of the House, Nancy Pelosi, nor Mitt Romney, the only Republican to cast a vote of guilty against him.

Later in the day, Trump assembled members of the House, Senate, his legal team and others, in a round of congratulations and thanks that lasted well over an hour. Singling out many of his political allies with stories and minutia, Trump laid the groundwork for what is likely to be a counter-attack against the Democrats who tried to have him removed from office and public life, setting the stage for a wide open election campaign that will hold nothing back.

Politics, like money, is a hardball business and the Trump team intends to use the best equipment and the best players to take it to the opposition in the fall.

At the Close, Thursday, February 6, 2020:
Dow Jones Industrial Average: 29,379.77, +88.92 (+0.30%)
NASDAQ: 9,572.15, +63.47 (+0.67%)
S&P 500: 3,345.78, +11.09 (+0.33%)
NYSE: 14,034.95, +10.09 (+0.07%)

Tuesday, December 10, 2019

Stocks Struggle Second Straight Monday; Paul Volker Passes

In what is beginning to look like a recurrent theme, stocks struggled to open the week, with all the major US indices down on the day.

This is the same condition that prevailed last week. Stocks were down hard to start the week, only to be rescued on Friday by a surprisingly good jobs report.

That may not be the case this time around. There will be no salvation by numbers later on the week. Market participants will have to deal with the troika of incessant impeachment hearings, troubling trade talks, and fruitless Federal Reserve operations.

It's no secret that the Fed has opened the spigots again, starting in September with what they're currently calling "not QE," a series of open market operations conducted on a daily basis that was originally intended to ease the malaise in overnight lending markets, and, while still performing that function, has morphed into another monstrosity, already having increased the size of the Fed balance sheet by some $300 billion.

And this will go on at least through the first quarter of next year, and probably further, because once the Fed shuts down the free money booth, there will be carnage, which is not to say there won't be carnage beforehand or that they will ever be able to completely close down their operations of largesse to the yield-starved banks.

Beyond the ordinary absurdities that has become the financial world, a moment of pause was given to mourn the passing of former Fed Chairman Paul Volker, who served in that post from August 1979 to August 1987, under presidents Carter and Reagan. Widely credited as the man to defeat the high inflation of the 70s and 80s through the use of tight money controls and ridiculously high interest rates, Volker was first seen as ridiculous, then hated, and finally emerged an American hero, rescuing the US economy from a terrific bout of inflation, unemployment, and a deep recession - caused, in part, by his raising of the federal funds rate from 11% to a record 20% - in 1981-82, that lasted 16 months.

Volker died Sunday. He was 92.

At the Close, Monday, December 9, 2019:
Dow Jones Industrial Average: 27,909.60, -105.46 (-0.38%)
NASDAQ: 8,621.83, -34.70 (-0.40%)
S&P 500: 3,135.96, -9.95 (-0.32%)
NYSE Composite: 13,555.07, -33.22 (-0.24%)

Wednesday, October 3, 2018

Donald Trump Is Goldilocks In Disguise; Stocks Rally; Treasury Yields Rocket Higher

Odd thing about politics: As soon as one man comes into the picture promising to fix everything that's broken with the US economy, all the other politicians instantly hate him, fight him, and actively try to get rid of him... by any means necessary.

That man, of course, is none other than the current president, Donald J. Trump, who has fended off non-stop assaults from Democrats, members of his own party, even having to defend himself against attacks from within his own administration, such as the FBI and the Justice Department.

Meanwhile, Trump, while he hasn't kept all of his election promises, has delivered on a good number of them, especially those dealing with the economy, trade, and taxes.

Trump has cut taxes for many, he's re-negotiated bad trade deals such as NAFTA, and he's presided over an economy that by most accounts is booming.

Yet, the vast majority of politicians, bureaucrats, and Baltway insiders still want him gone. They'd love to impeach him, shame him into resigning, or otherwise undermine his America First policies.


Because they're jealous, and they're petty, and Trump has exposed them as swamp dwellers whose sole interests are enriching themselves at the public's expense and getting re-elected.

Trump has delivered - with assistance from the Federal Reserve and some members of congress - the United States into the goldilocks economy: not too hot, not too cold, just right. Stocks are up, yields on treasury bonds are rising, but inflation and unemployment are low. There's so much good going o in the US economy it's actually difficult to find problem areas.

401k accounts are fatter, paychecks have less tax taken from them, incomes are rising. Just what about all of this isn't to like? Ask Diane Feinstein, Chuck (sellout) Schumer, Nancy Pelosi or any of a handful of petty thieves masquerading as honorable congress-people. They have no answer and they're worried about losing their prestige and power in the upcoming mid-term elections. That's why they and their lackeys in the media are so intent on tearing down everything related to Trump and his successes. They accuse his Supreme Court nominee of sexual assault that supposedly happened more than 35 years ago, when Brett Kavenaugh - who will almost surely be confirmed by the Senate - was a teenager in high school.

The attacks and assaults will continue up to the November elections and beyond. Russia and collusion will be thumbed up again by the wicked special prosecutor from hell (and hopefully soon to return there). The New York Times will continue to run stories in vain attempts to tarnish President Trump's image. None of it will work. The American people see results and see through the media attacks, the howling senatorial rhetoric, and the baseless accusations. Jobs are plentiful. Money is flowing. Things are good, very good.

The Dow Jones Industrial Average closed at yet another record high today, despite backing off substantially from intra-day highs. The yield on the benchmark 10-year-note reached the highest point in more than a decade, at 3.16%, a number that has Fed officials smiling, lenders beaming, and most consumers and small business owners a little bit piqued, but still not worried or upset. Interest rates are still low compared to other times; mortgages are reasonably priced. With business prosperity, the cost of money should be a little higher and it's not at a point that it does damage to one's bottom line.

Goldilocks has arrived and his name is Trump.

(Plus, baseball playoffs are underway and Alabama is #1 in college football.)

Dow Jones Industrial Average October Scorecard:

Date Close Gain/Loss Cum. G/L
10/1/18 26,651.21 +192.90 +192.90
10/2/18 26,773.94 +122.73 +315.63
10/3/18 26,828.39 +54.45 +370.08

At the Close, Wednesday, October 3, 2018:
Dow Jones Industrial Average: 26,828.39, +54.45 (+0.20%)
NASDAQ: 8,025.08, +25.54 (+0.32%)
S&P 500: 2,925.51, +2.08 (+0.07%)
NYSE Composite: 13,118.55, +12.54 (+0.10%)

Friday, January 5, 2018

Huge Miss on December Non-Farm Payrolls Won't Trigger Sell the News Event

Stocks ripped higher on Thursday on pure hope and fumes, in anticipation of Friday's BLS release of December non-farm payroll data.

As mentioned in yesterday's post, the market has set itself up for a "sell the news" event, having already bought the rumor in the form of an incredible 250,000 December private jobs gain from ADP.

Being a case of which numbers should be trusted, investors will probably accept the BLS, being that it is the "official" number, despite the wild swings, methodology and revisions for which the data set is so famous.

On Friday morning, the BLS announced a gain of a mere 148,000 net new jobs in December, on expectations of 190,000, the lowest print since July 2017. [full release here]

The unemployment rate remained moored at 4.1%, a rather humorous figure, given that the BLS counts part-time jobs and working more than one day a week as a "job."

As of this writing, roughly 15 minutes prior to the market open, stock futures are higher, but well off the levels seen earlier this morning.

The expectation for stocks to sell off throughout the session, given that valuations have been stretched to unsustainable levels, will likely not materialize since prognosis is as much the stuff of smoke and mirrors as the algo-driven market itself.

At the Close, Thursday, January 4, 2018:
Dow: 25,075.13, +152.45 (+0.61%)
NASDAQ: 7,077.91, +12.38 (+0.18%)
S&P 500: 2,723.99, +10.93 (+0.40%)
NYSE Composite: 13,028.46, +71.18 (+0.55%)

Saturday, October 7, 2017

Payroll Loss Means Nothing As Stocks Recover to Close Friday Flat

Weekend Wrap: Even a horrible September jobs report couldn't slow down the runaway freight train that is the US stock market.

After the BLS reported on Friday a net loss of 33,000 jobs in the month, stocks were lower for most of the session, though investors shrugged off the data as the result of hurricane that hit Texas and Florida and continued to buy as the afternoon wore towards the closing bell.

The late-day surge left the markets mostly flat for the session, with the NASDAQ the only major index to post a gain.

For the week, however, stocks put in one of their best performances of the year, led by the Dow Industrials, which ramped up 1.65%. The laggard was the broad-based NYSE Composite, which posted a gain of just under one percent.

The non-farm payroll report for September was the first since 2010 to show a loss in employment. Despite the three-month average declining sharply to 91,000 from 172,000, stocks were still the place to be.

As stated previously here at Money Daily many times, there is nothing to impede stocks from careening higher for what looks to be the remainder of 2017. with the Fed on hold until December conceding rate increases, and the Bank of Japan and the ECB buying stocks with both fists, passive investors need do nothing besides sitting back and waiting for their quarterly statements.

Making money has never been so easy.

At the Close, Friday, October 6, 2017:
Dow: 22,773.67, -1.72 (-0.01%)
NASDAQ: 6,590.18, +4.82 (+0.07%)
S&P 500: 2,549.33, -2.74 (-0.11%)
NYSE Composite: 12,317.69, -21.24 (-0.17%)

For the Week:
Dow: +368.58 (+1.65%)
NASDAQ: +94.22 (+1.45%)
S&P 500: +29.97 (+1.15%)
NYSE Composite: +108.53 (+0.89%)

Thursday, October 5, 2017

With September Non-Farm Payroll Data On Deck, Stocks Post Record Highs

Even though ADP reported the weakest jobs numbers in 11 months Wednesday, investors shrugged off the data and limped higher, with all major indices closing at fresh all-time highs.

ADP private employment figures for September showed a gain of 135,000 jobs, with the most damage done to firms with less than 20 employees, which registered a loss of 11,000 jobs. The firm, which tracks private payrolls, was quick to point out that hurricanes Harvey and Irma accounted for 50-60,000 fewer jobs created, noting that many mom-and-pop-like outfits were forced to close during and after the disasters that covered much of Florida and the Houston metropolitan area.

Without doing the requisite math, October's figures are likely to be higher by an order of magnitude, unless Mother Nature unleashes more of her wrath on America's southern states.

The data which ADP provides usually presages the Bureau of Labor Statistics (BLS) Non-farm Payroll release, due out on Friday, October 6.

Wall Street will likely remain unfazed with a low NFP number, taking the easy way out by blaming storms and natural disasters for the poor showing.

Life goes on, new jobs or not.

At the Close, Wednesday, October 4, 2017:
Dow: 22,661.64, +19.97 (+0.09%)
NASDAQ: 6,534.63, +2.91 (+0.04%)
S&P 500: 2,537.74, +3.16 (+0.12%)
NYSE Composite: 12,304.67, +1.79 (+0.01%)

Thursday, April 20, 2017

Stocks Split, But Down On The Main; Valuation Could Be At The Root

Something is upsetting the markets, but it's difficult to find an appropriate culprit for the current nausea.

Maybe it's an overhang from tax filing day, even though that is now two days in arrears, still, the amount of taxes Americans pa to federal, state, and local governments has probably never been higher. If taxes rates are not the largest they've ever been, they're certainly close to being so.

It takes 113 working days for the average American worker to earn enough money just to pay off the taxman. That day arrives - for most people - around mid-May, so perhaps the realization that one hasn't yet worked enough just to stay even with the bloated governments that regulate every conceivable activity might be a cause for upset.

Falling stock prices cannot be attributable to the current employment situation because we've been told over and over again that there are plenty of jobs in America. What we're not told is that many of those jobs are part time,
or low-paying, or otherwise dissatisfying. So, maybe it could be that.

One doesn't see to many corporate CEOs suffering, so there is virtually no possibility that these titans of industry are panic selling their shares.

What could it be?

Maybe the idea that stocks are currently trading at some of the highest valuations in history is giving some with more savvy investing skills than the average fund manager cause for concern. These people have seen tops and bottoms before, so they might just be looking for an exit and these high prices seems like a good place to take one's leave, or, as the case may be, profits.

If that's all there is to the sideways trading since mid-March, then it's probably not much to worry about, unless one is looking for a place to invest. In that regard, buying would be quite out of the question, thus solving our quandary: there are more sellers than buyers.

It could be that simple.

At the Close, Wednesday, April 19, 2017:
Dow: 20,404.49, -118.79 (-0.58%)
NASDAQ: 5,863.03, +13.56 (0.23%)
S&P 500: 2,338.17, -4.02 (-0.17%)
NYSE Composite: 11,342.42, -36.16 (-0.32%)

Wednesday, April 5, 2017

Stocks Finish With Small Gains On Tuesday, But ADP Jobs Report Could Change The Narrative

Stocks finished with small gains on Tuesday, but the recent squeamishness of investors may be about to change, as ADP reported job growth of 263,000 for the month of March, the largest gains seen in the small business sector, characterized as businesses with fewer than 50 employees, which gained by 118,000 during the month.

Making note of the increasingly positive tone of business and employment, stock futures were set to explode higher, with Dow futures up by more than 50 points roughly a half hour prior to the opening bell on Wall Street.

The ADP report - which covers private sector employment - is generally seen as a guide to the highly-anticipated monthly Non-Farm Payroll (NFP) report, generally released the first Friday of each month. The BLS is set to issue the report for March on Friday, April, 7.

At the close, April 4, 2017:
Dow: 20,689.24 +39.03 (0.19%)
NASDAQ: 5,898.61 +3.93 (0.07%)
S&P 500: 2,360.16, +1.32 (0.06%)
NYSE Composite: 11,470.54, +6.62 (0.06%)

Friday, March 3, 2017

Stock Markets Backtrack In Advance of February NFP Jobs Report

Editor's Note: Sincere apologies to readers for the incorrect posting this morning. February Non-farm payroll data will not be released until March 10, instead of the usual first Friday of the month. Money Daily reported below that the NFP data would be out TODAY, March 3, but that is not the case. We seriously regret the error.

Following Wednesday's massive upturn in markets on the heels of President Trump's speech, Thursday was a bit of a reality check for gamblers in the Wall Street Casino.

Smart one - and there were plenty of them - took their quick profits and are likely sitting in cash ahead of Friday's non-farm payroll report from the tarnished Bureau of Labor Statistics (BLS).

Since February is a short month, expectations for another bump in payrolls may very well be disappointed, to a degree not previously factored.

ADP reported fewer jobs created in the private sector for February than expected. The 139,000 American workers hired to private-sector payrolls in February was below economists' consensus forecast of 155,000. Additionally, ADP revised their January figure to 127,000 from 175,000. That's a mighty big decline which was overshadowed by Wednesday's shock and awe euphoria.

While the NFP does not exactly mirror ADP, it usually tracks pretty well, though the BLS is notorious for using metrics such as the business birth/death model to goose numbers toward the desired result.

Non-farm payroll data will be released Friday morning at 8:30 am ET. There may well be fireworks if the number falls short of the lowered-bar expectations of 157,000 net new jobs.

At The Close, 3.2.17:
Dow: 21,002.97, -112.58 (-0.53%)
NASDAQ: 5,861.22, -42.81 (-0.73%)
S&P 500: 2,381.92, -14.04 (-0.59%)
NYSE Composite: 11,575.91, -85.31 (-0.73%)

Friday, February 3, 2017

Stocks Finish Flat Thursday, Friday Futures Boosted By Boffo BLS Jobs Report

Stocks finished the day Thursday relatively flat, but the big jobs number Friday should manage to erase any doubts about where the market is headed (spoiler alert: back over 20,000).

According to the ever-accurate-and-oft-revised BLS, he US economy added 227,000 jobs in January while the unemployment rate rose slightly to 4.8%. Economists were looking for payrolls to grow by 175,000 with the unemployment rate expected to hold steady at 4.7%.

So, more jobs, but the unemployment rate goes higher. Only in America, land of missed opportunities and bogus statistical data from the government.

Wages missed the mark, as average hourly earnings rose just 0.1%. The usual suspect "experts" were seeking a gain of 0.3%. Sorry, slaves. Back to work. However, the day is early, and though futures are rocketing higher, there's now the possibility that President Trump will unleash a tweet or two designed to fan the flames of confusion.

Just one question: Are we having fun yet?

At The Close, Thursday, February 2, 2017:
Dow: 19,884.91, -6.03 (-0.03%)
NASDAQ: 5,636.20, -6.45 (-0.11%)
S&P 500: 2,280.85, +1.30 (0.06%)
NYSE Composite: 11,215.38, +8.14 (0.07%)

Friday, December 2, 2016

December Jobs Report OK; Look For FedRes To Raise Rates

The U.S. economy added 178,000 net new jobs last month while the unemployment rate fell to 4.6%, the lowest since 2007, the Labor Department said Friday.

That's about all one needs to know about what the Fed may do at the next meeting of the FOMC in less than two weeks, December 13 and 14.

The economy seems to have picked up some confidence from the Trump election, and there's the possibility that the Fed may consider more rate hikes at a faster pace if economic conditions continue to improve (it's about time). what the Fed doesn't want to do is slam the door shut on any expansion by raising rates too quickly, but, after eight years of moribund global flim-flammery, it's apparent that the Fed doesn't want to do anything that might draw undue attention to itself.

As the year enters the final month of a very turbulent 2016, the signs are good that the eight years of non-recovery (except for stocks) may be about to usher in a new prosperity and at least a couple of good years for the US economy. While the rest of the world is in somewhat dubious condition, especially Japan and Europe, with their mountains of debt and negative interest rates, the US seems poised to again take the lead in economic matters.

It may take a while and it may take a pullback in stocks, which hasn't happened since '09, but things do seem to be on the improve.

Other than the Dow Industrials, stocks took a bit of a beating this week, ending on a down note as the Friday rally failed to maintain momentum. This could be the beginning of a Wall Street hissy fit over rate hikes. Then again, stocks are close to all-time highs.

Stay tuned and keep that power dry.

Closing Bell, Friday 12/02/16
Dow: 19,170.42, -21.51 (-0.11%)
NASDAQ: 5,255.65, +4.55 (0.09%)
S&P 500: 2,191.95, +0.87 (0.04%)
NYSE Composite: 10,841.64, +12.65 (0.12%)

For the week:

Dow: +18.28 (+0.10%)
NASDAQ: -143.27 (-2.65%)
S&P 500: -21.40 (-0.98%)
NYSE Composite: -38.98 (-0.36%)

Friday, October 28, 2016

Special: Fighting Fraud Starts With Skepticism Of Statistics Like GDP

Stocks sold off slightly on Thursday, but, over the past few days and weeks, the real money has been moving in bonds, which - in the case of the US and Germany, at least - are sporting yields at or near multi-year highs.

The cause is mostly FUD, the arcane acronym invented on the internet standing for Fear, Uncertainty, Doubt. When bond traders get riffed, the world should take note, but, since we are preconditioned to focus our collective attention on stocks, most people don't realize where money is moving and why until it's too late. Interest rates rise, money tightens and flows into bonds because they are considered more stable and safer than stocks. Businesses and consumers face higher lending costs, the economy stalls, stocks decline. The process takes many months, often years, before the eventual recession occurs. Fortunes are made and lost, mostly made by savvy bond specialists and lost by individuals and stock investors.

It's a royal screw job on the middle and upper-middle class (or what's left of it) by monetary authorities and governments that have been skimming off the top through inflation, deflation, fractional reserve banking, taxes, fees, and penalties. If you feel like you've been screwed by either banks or the government (village, city, county, state, or federal), it's because you have been... often overtly, but more often, quietly, covertly, under the cover of "we're doing what's best for you," or increased spending, deficit spending, capital "improvements" or budget windfalls to schools, tunnels, roads, bridges, fire departments, special tax districts, et cetera ad nauseum.

It's why people are voting for Trump. No kidding. American voting-age citizens fall today grossly into two broad categories: 1) Working people or retired on fixed income, getting nowhere fast, watching their incomes stagnate since 1999, paying more for everything from health care to property taxes to cell phone or internet service to utilities; 2) Welfare, SSI disability or other entitlement recipients, government employees who care not a whit that everything is going to hell in a handbasket because they either a) get a rent subsidy, food stamps, and other goodies no matter what, for doing nothing, or, b) are a government employee getting an automatic annual raise regardless of their job performance or the economic condition of the country.

In between or outside these two mega-groups are the upper-upper crust of one-percenters who make their money off interest on investments and the swath of social security and pension retirees who have maxed out on the system. That large last group vectors in and out of the working class spectrum to a large degree and some are being largely disenfranchised in the same ways that the middle class has been, especially since 2001, when interest rates began tanking and savings no longer provided a great enough return to outpace inflation.

Older folks will remember better days, when banks paid 5% interest on savings. Forget that. It's gone. Just like the social security fund, which faces default and bankruptcy within 15 years, our best days are behind us. Baby boomers will be the last generation to get ahold of the golden ring of social security. Generations X and Y will get less and millennials will likely get little to nothing. The system broke in the 80s, under Ronald Reagan (sorry, conservatives, but that's the truth), and it's just gotten worse as banking regulations were eased (Clinton and congress conspired to eviscerate Glass-Steagall leading to the global collapse) and every president since Carter has stolen from the social security fund to pay general obligations.

What's multiple times worse is that not only has the federal government stolen from the future, but they've managed to run up enormous deficits nearly every year and add to the debt at an exponential rate.

Here at Money Daily we don't expect everyone to understand economics, but we do strive to encourage people to exercise a little common sense and have basic math skills. Since what the government does with money (spend more than they take in), it doesn't take a Ph.D. in anything to discern that if you did the same, your financial condition would deteriorate, slowly at first, then all at once, sending you and yours to the poor house.

So, the government does better? How do they perform this magic? Lies and deception, mostly, through the issuance of bonds, sold to the Fed, parceled out to primary dealers and sold again to investors of all stripes. The Fed then prints more money, which is spent throughout the economy. Banks used to multiply the money supply via fractional reserve lending but they don't do much of that anymore. They use accounting tricks, balance sheets nobody can comprehend and investments form the ordinary to the arcane (CDOs, for instance) rather than functioning under some form of fiscal discipline. It's all too easy for the government and the banking system to defraud everyone. They've been doing it for centuries. It gets reset from time to time, but the same powers that were become the powers that be. It's history, if you know where to find it.

So, to the point: Just moments ago, the Deptartment of Commerce reported its first estimate of third quarter GDP, coming in at a robust 2.9%, more than double the second quarter's stumbling 1.4%, all smoke and mirrors designed to elect Hillary Clinton as president, keep the status quo firmly entrenched, and continue your existence as a docile, dumb serf. When the numbers are revised in a month, and again another month later, and again in two years, the number will be much lower, but, by that time the elections will be long over, the winners will be still partying, and you will be getting screwed, again, and again, and again.

Just wait until October's job numbers come out next Friday, the final, big lie prior to the elections. It should be awesome, but it will still be a lie.

If you aren't gardening, putting up solar panels, repairing an old car rather than buying a new one, scrimping and saving, buying gold and silver now, worry not, you soon will be.

Thursday's Tumble
Dow Jones Industrial Average
18,169.68, -29.65 (-0.16%)

NASDAQ Composite
5,215.97, -34.29 (-0.65%)

S&P 500
2,133.04, -6.39 (-0.30%)

10,503.06, -25.13 (-0.24%)

Friday, August 5, 2016

Stocks Gallop Ahead On July Jobs Boost

While the consensus estimate was for July Non-Farm Payrolls to show a gain of 160,000, the BLS (aka Bureau of Lies and Salaciousness) blew away the number, showing the US economy grew by 255,000 jobs in the usually dolorous month of July. The unemployment rate remained unchanged at 4.9%.

That number sent the dollar screeching higher and stocks rocketing back toward or beyond (S&P 500) all-time highs.

The Dow Jones Industrial Average was up more than one percent, along with the NASDAQ, no doubt buoyed by the sensational jobs report and the trouncing Hillary Clinton was giving to Donald Trump in the majority of the latest polls. The elite status quo has their agenda in hand; Wall Street obviously a willing partner.

All major averages finished with modest gains for the week (with the exception of the NYSE Composite), despite the idea that a better economy - one that, say, produces 250,000+ jobs per month - might give the Federal Reserve cause to raise rates. For now, however, good news is good news.

On The Day:
Dow Jones Industrial Average
18,543.53, +191.48 (1.04%)

5,221.12, +54.87 (1.06%)

S&P 500
2,182.87, +18.62 (0.86%)

NYSE Composite
10,781.78, +75.74 (+0.71%)

For the Week:
Dow: +111.29, (+0.60%)
S&P 500: +9.27 (+0.43%)
NASDAQ: +58.99 (+1.14%)
NYA: -2.65 (-0.02)

Saturday, June 4, 2016

Weak Jobs Number; Worst In Six Years Rattles Market

At the end of the day, the weakest jobs number since 2010 didn't deter stock traders much, though the damage was more severe earlier in the session, another carbon copy of the previous two, with a deep drop at the open, followed by relentless pumping towards the positive.

While Friday's effort left much to be desired, it has now become all-too-obvious that there is no such thing as a fair and open market in US stocks, especially in the face of negative economic data. The federal government and agents of the Fed are adamant about painting a rosy picture of the economy, even though the metrics - especially manufacturing and non-farm payrolls this week - are using a strikingly different palette.

The 38,000 new jobs created in May, as reported by the BLS, was miles below the consensus estimate of 164,000 and gives the Fed much more thinking material as concerns a rate hike, which now appears to be off the table for June, at the very least.

What the number suggests is that despite all the howls from the president, his advisors and others on TV, the economy is in a precarious state, not one in which overheating is even a remote possibility. This would be no time to raise interest rates.

While stocks held their own during a tumultuous week, Friday saw gold and silver rally back, perhaps an indication that all is really not well in the kingdom of Obama.

On The Week:
Dow: -66.16, (-0.37%)
S&P 500: +0.07 (0.00)
NASDAQ: +9.01 (+0.18)

For the Day:
S&P 500: 2,099.13, -6.13 (0.29%)
Dow: 17,807.06, -31.50 (0.18%)
NASDAQ: 4,942.52, -28.85 (0.58%)

Crude Oil 48.90 -0.55% Gold 1,246.50 +2.80% EUR/USD 1.1366 0.00% 10-Yr Bond 1.70 -5.91% Corn 418.25 +0.72% Copper 2.12 +2.42% Silver 16.44 +2.59% Natural Gas 2.76 -0.54% Russell 2000 1,164.14 -0.55% VIX 13.47 -1.17% BATS 1000 20,677.17 0.00% GBP/USD 1.4515 0.00% USD/JPY 106.5450 0.00%

Friday, May 6, 2016

Jobs Miss Mark: To Markets, OK, But FED COURTS DEPRESSION

Jobs. Who needs 'em?

Friday's epic non-farm payroll data turned out to be disappointing to the Fed cheerleaders and assorted brain-dead economists and analysts who are still touting the "recovery" mantra.

Instead of the predicted 205,000 net new jobs that were supposed to be created in April, the BLS reported a net gain of just 160,000, a 20% miss, but at least something to seize upon by those who believe in ultra-low interest rates (aka, free money).

Thus, in the world of bass-ackward economics, stocks actually gained on the final day of the week, thinking (probably correctly) that more evidence of a weak economy would cause the Fed to continue to pause on their relentless rate-hiking journey, which, to date, has been confined to one measly 0.25% hike in December of last year, which was a prima facia cause for a wicked stock market decline in January.

Since then, however, the Fed has talked down the rate hike theme with alarming accuracy as relates to paper assets (stocks), and the markets have responded in kind, reversing all of the losses from January and the first two weeks of February.

Odds of the Fed raising the federal funds rate in June are now approaching infinity, because the one thing the Fed wants to avoid is another market correction. They are, in the estimation of many leading private money managers, OUT OF THEIR MINDS.

A return to "normalized rates," - something on the order of 3-5% on the fed funds front - is still years out, and, since the only data the Fed is interested in happens to be the levels on the Dow, S&P and NASDAQ, the market is probably going to overrule the ivory tower charlatans at the Fed. Corporate profits are and have been heading south since the third quarter of 2015, and will likely continue to do so, as capital is being mis-allocated to an alarming degree.

The levels of absurdity between stock prices and profits also are approaching extreme levels. It's only a matter of time before investors (and the term is used loosely, because most of the market is algo-driven, speculative, and dominated by institutional buyers and sellers) give up on future gains, cash out and head to the safety of alternatives, those being cash, bonds, and precious metals to a small degree.

In other words, the Fed has not abolished the business cycle. They've managed only to delay the inevitable, and by delaying, in a perverse avoidance of any pain, will cause degrees more devastation to not just financial markets, but markets in everything.

The Fed is courting depression by denying the failure of their experiment in fiat money with no backing save faith, and that faith has been on the wane. Expect a cratering of the economy just in time for the November presidential election. Between now and then, plenty of market noise, but nothing any good at all.

For the Week:
Dow: -33.01 (-0.19%)
S&P 500: -8.16 (-0.40)
NASDAQ: -39.20 (-0.82)

On the day:
S&P 500: 2,057.14, +6.51 (0.32%)
Dow: 17,740.63, +79.92 (0.45%)
NASDAQ: 4,736.16, +19.06 (0.40%)

Crude Oil 44.56 +0.54% Gold 1,289.70 +1.37% EUR/USD 1.1405 -0.04% 10-Yr Bond 1.78 +1.83% Corn 377.25 +0.94% Copper 2.15 -0.09% Silver 17.50 +1.03% Natural Gas 2.09 +0.82% Russell 2000 1,114.72 +0.61% VIX 14.72 -7.48% BATS 1000 20,677.17 0.00% GBP/USD 1.4431 0.00% USD/JPY 107.1050 -0.02%

Thursday, May 5, 2016

Stocks Pop, Drop, End Flat Before Jobs Friday

It is probably the dumbest thing going in the markets - besides, perhaps, waiting on FOMC decisions - but the monthly "Jobs Friday" fiasco is upon us once again, as breathless investors await one more dicey number form the government.

Prior to the market open on Friday, the Bureau of Labor Statistics (BLS) will release its April Non-Farm Payroll figure, and by that traders will have access to vital information needed to access the health of the economy and trade stocks.

except for the fact that the numbers are largely a joke, have been proven to be such, and are not of importance to anybody in particular. They offer a rather fuzzy view of the employment conditions in the United States, if one is even inclined to believe them.

So, stocks went up, came down and finished just about where they started the day, with the Dow up, the S&P and NASDAQ ever so slightly to the downside.

Idiots On Parade:
S&P 500: 2,050.63, -0.49 (0.02%)
Dow: 17,660.71, +9.45 (0.05%)
NASDAQ: 4,717.09, -8.55 (0.18%)

Crude Oil 44.51 +1.67% Gold 1,279.60 +0.41% EUR/USD 1.1403 0.00% 10-Yr Bond 1.75 -2.07% Corn 373.75 -0.80% Copper 2.14 -1.92% Silver 17.38 +0.43% Natural Gas 2.08 -2.80% Russell 2000 1,107.95 -0.47% VIX 15.91 -0.87% BATS 1000 20,677.17 0.00% GBP/USD 1.4485 +0.02% USD/JPY 107.2700 -0.01%

A note on the blatant unfairness within the judicial system:
The Arbitration Association of America, which handles the majority of arbitration cases, charges $200 for an initial filing fee, not counting fees incurred by consumers who hire attorneys. The CFPB argues that fees like this have a cooling effect on potential claimants. Over the two-year period between 2010 and 2011, the CFPB found only 25 cases were filed by consumers with claims for under $1,000. For every dollar claimed, consumers won an average of 12% of the original claim in relief. Only 9% of consumers who took on financial institutions received any relief at all. In contrast, 93% of claims filed against consumers by financial institutions came out in the institution’s favor.

Wednesday, May 4, 2016

ADP Jobs Miss; Stocks Lower; Markets Appear Exhausted

The best analyst assumptions on where markets might be heading are probably not going to impress anybody this year. As usual, the best and brightest of Wall Street had rosy calculations heading into the new year and so far none of them are anywhere close to the reality of 2015.

That reality has the Dow and S&P clinging to one to two percent gains for the year, with the NASDAQ roughly six percent underwater.

This morning's miss in the ADP privater jobs report for April set a sullen tone for equities, having already been battered on Tuesday. The middle of the week turned out to be no better, sending stocks further into the red.

ADP's report of 156,00 new jobs in April was well below the average estimate of 193,000, and was the lowest number since March of 2013. The ADP report sets the stage for the BLS April non-farm jobs report, due out Friday.

Stocks have run out of gas, this current bull market having become the second longest in history a few days back, but the central banks haven't run out of money to print out of thin air, a specialty that also is apparently running its course and running the global economy into the ground.

With summer heading its way and the outlook for a Fed tightening looking more and more dubious for June or even July, investors are beginning to take money off the table and head into cash or other, more stable assets, particularly bonds, art, gold, silver and oil.

For the most part, equities are overpriced and volumes have been thin. A serious correction could occur within days or weeks. With nothing but bad news and data hitting the street and foreign markets on a regular basis, the casino is quickly running out of chips as the players cash in and head out of town.

S&P 500: 2,051.12, -12.25 (0.59%)
Dow: 17,651.26, -99.65 (0.56%)
NASDAQ: 4,725.64, -37.58 (0.79%)

Crude Oil 44.05 +0.92% Gold 1,281.60 +0.56% EUR/USD 1.1487 +0.01% 10-Yr Bond 1.78 -0.89% Corn 377.75 -0.53% Copper 2.18 -0.14% Silver 17.42 +0.69% Natural Gas 2.14 +2.83% Russell 2000 1,113.13 -0.77% VIX 16.05 +2.88% BATS 1000 20,677.17 0.00% GBP/USD 1.4501 +0.02% USD/JPY 107.0170 +0.02%

Wednesday, March 2, 2016

Market Steady Ahead of NFP; ADP Reports Jobs Creation Strong

The snapback rally in stocks off the January lows cannot be understated, nor can it be stopped. There are simply not enough reasons to not own stocks, being that commodities have been decimated, bonds are beyond the reach or intellect of ordinary investors, and the fact that most of the investment advisors and fund managers of the world are reaching for yield, putting stocks first, to the detriment of everything and anything else.

But, today was a day for repositioning, after ADP got the party started by reporting that private employers added 214,000 jobs in February. [Full report here]

Stocks initially had the blues, trading in the red for most of the morning, until European markets closed, then quickly erasing all losses, hugging the UNCH line for the remainder of the session.

While stocks were lacking in volatility and volume, commodities got a bit of a boost, with oil, gold and silver headed handily higher.

It was a lackluster session due to uncertainty about next week's FOMC meeting, one which the Fed could conceivably raise interest rates, though analysts have largely dismissed that possibility.

The interim rally in stocks has, since the middle of February, clawed back more than two-thirds of the losses incurred during the six-week decline from the start of January to the middle of February. Nothing seems to be able to send stocks back to their 2016 lows, though getting back to all-time highs would be something of a surprise, considering the slow growth rates of economies around the world, and especially in developed nations.

There's a week left before the FOMC meeting, at which point sentiment may take a turn to the negative, though, if the Fed continues to keep rates at their abnormally low rates, the party crowd on Wall Street is likely to break out the champagne, hats, and favors, bidding up equities beyond reasonable valuations (some say they already have).

This is just normal churn, but no time to either stake out new positions nor panic. The markets seem content - like the US economy - to muddle along, delivering unsensational profits in a low-inflation, low-growth environment.

Friday's non-farm payroll report - as meaningless and unprovable as their spurious numbers might be - may provide some idea of sentiment going forward, but, at this point, the Fed is holding the most volatile hand of all the players, and they're not likely to bluff or fold. In typical Fed fashion, they'll be more likely to check, rather than raise the ante or call the hands.

Wednesday's Sleeper:
S&P 500: 1,986.45, +8.10 (0.41%)
DOW: 16,899.32, +34.24 (0.20%)
NASDAQ: 4,703.42, +13.83 (0.29%)

Crude Oil 34.65 +0.73% Gold 1,241.70 +0.89% EUR/USD 1.0867 -0.01% 10-Yr Bond 1.8480 +0.76% Corn 355.75 +0.07% Copper 2.19 +2.21% Silver 15.01 +1.69% Natural Gas 1.67 -4.13% Russell 2000 1,065.67 +1.06% VIX 17.12 -3.28% BATS 1000 20,677.17 0.00% GBP/USD 1.4079 +0.91% USD/JPY 113.38

Friday, March 6, 2015

GOOD=BAD; NFP +295,000, DOW -278.87, NASDAQ -55.44, S&P 500 -29.78

As bizarre as global economics has become, almost nothing compares to the algo-crazed stock markets in the United States, where computers are programmed to interpret diverse news report headlines and respond accordingly.

One of the more perverse actions was visible today, when, after the BLS announced, in their monthly non-farm payroll release, that the US had created (mysteriously, magically) 295,000 net new jobs in the month of February stocks traded sharply to the downside and continued that trend for the remainder of the session.

At issue is the proposed June 0.25% increase (that's right, 25 bips) to the federal funds rate that the Federal reserve has been hinting at for the better part of the past two years. Maybe they've been hinting about this seminal event for longer, but, honestly, one has only so much patience for the garbled issuance of verbiage from the masters of misinformation.

Supposedly, the argument on Wall Street is thus: if the economy is truly improving and gathering steam, then the Fed will raise interest rates, meaning that inside players like the big banks, insurance companies and some hedge funds are going to find it much more difficult to make money, because, when you're borrowing billions of dollars at almost nothing, and investing it in dubious stocks and other investments that might not pan out as you had expected - unless the Fed has your back - and, leveraging up those investments 10, 20, maybe 30 times, any increase in your cost of borrowing might bring on disastrous events.

So, as soon as the bells and whistles went off signaling the opening of trade on the final day of the first week of March, the selling ensued, and did so with resolute alacrity and vigor not seen when the markets were going up (all of the past six years, on low volume).

The whole set-up is patently absurd and it's purely the cause of the Fed, which has kept rates too low for too long, and now must reap what they have sewn, so welcome to the great deflation, part two, which began in 2008, and was interrupted by the Fed and Wall Street in March of 2009. If stocks sell off like this merely on the rumor that the Fed will hike rates a measly 1/4 percent, imagine what kind of carnage will ensue when they actually do it.

Where the absurdity begins is difficult to ascertain, though the Fed, through their continued press releases after FOMC meetings, has linguistically backed themselves into a corner. They've repeatedly maintained that they will raise interest rates on a data-driven, unspecific schedule, and the data released today by the BLS was undeniably good, showing strong job growth and an unemployment rate at the lowest point in nearly a decade, at 5.5%, which, to almost anybody's eyes, is pretty much full employment.

There's one little problem with the figures the BLS releases the first Friday of every month: they're BULLS--T, garbage, manipulated, massaged, goal-sought, and thoroughly distort the true nature of the labor market. In other words, there's almost no way there were 295,000 new jobs created in the US last month, and the figures for the past year, and the year before that and before that, etc., are even more misleading. The US economy has been hollowed out, and, while it may be better here than it has been in years, it is not much better.

Now, the Fed knows these figures are made from pure cloth, but they are tied to them. Call today a test of the algorithms, a dry run for the main event, which should occur around the middle of June or by early July. The Fed and the government have to continue to spread the lie that the US economy is strong, vibrant and growing, and, because of that, while most other countries in the world are lowering interest rates (because they honestly know their economies stink), the US is prepared to embark upon one of the more ludicrous propaganda and financial experiments in the history of mankind.

The Federal Reserve, should they go through with their supposed plan to begin raising interest rates in June 2015, will be attempting the impossible, and doing a most dangerous thing: they will be trying to slow down an economy they proclaim - and would like everyone to believe - is growing, which in reality is contracting and deflating.

Our money is heavily on the side of reality winning that argument.

Related trades today concerned all US treasuries, which sold off, sending yields higher. Oil, gold and silver were all lower.

Dow Jones 17,856.85, -278.87 (-1.54%)
S&P 500 2,071.26, -29.78 (-1.42%)
Nasdaq 4,927.37, -55.44 (-1.11%)

Ironic notes: Today was Alan Greenspan's 89th birthday; Apple will replace AT&T in the Dow Jones Industrials on March 18 (just in the nick of time?)

Wednesday, January 21, 2015

SOTU 2015 Recap: Drink, Drink, Chug, Vomit; Oscar Wilde For The Win

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Just to be fair, we didn't exactly keep pace with the president in our SOTU drinking game.

Having chosen the top four words from our Top Ten list - taxes, jobs, Middle Class, and, economy - President Obama brought down the house on the jobs number, using that specific word (either in the singular or plural form) 24 times before we stopped counting. Smartly, he only said "tax" or "taxes" five times, used the term, "Middle Class" four times, "economy" 13 times and never once used the word "rich."

Where the president excelled, however, actually overwhelming even our rosiest expectations, was in the bonus chugs segment, in which he mentioned ten countries specifically, not including the United States (or America), which technically didn't count, and was, obviously, one of the more frequently used words in his hour-long speech to the nation.

Obama got off early with mentions of Afghanistan and Iraq, and, though it took a while for him to come up with the third county, Japan, he took charge with a quick rattling off of Syria, Russia, Ukraine, Cuba, Iran, Israel and China in short order.

What took the whole drinking effort to new levels was the president's expert rendering of the terrorist naming bonus, in which we instructed that the mention of three terrorist groups would constitute a chug command. Though Obama specifically named only one group by name, he nailed the ISIS-ISIL bonus at 9:45 pm, 35 minutes into the speech, calling his favorite Mideast thugs by their pet name, ISIL, invoking the rule of our game to promptly end in a spellbinding, chug-til-you-puke crescendo.

So intent was the president on getting the nation massively inebriated that he intoned "ISIL" again just one minute later. Strangely enough, his wording was actually foreshadowed by Mrs. Alan Greenspan (aka, Andrea Mitchell), who mentioned ISIL just minutes before the president made his way to the podium. We applaud the otherwise droll Mrs. Greenspan for her literary bravado.

Aside from yet another successful SOTU drinking panacea - Obama's sixth - the president's rhetoric was little more than a rehash of his last two SOTU addresses, replete with promises that will be broken and high-minded principles to which congress and the administration will find difficult, if not impossible, to personalize.

Generally, while we agree in principle with a good deal of Obama's vision of America (though free community college and health care coverage for everyone are a bit too far out on the socialist agenda for our tastes), we have grown tired of waiting for either the president or the congress to come through with specific actions. Empty rhetoric becomes tiresome in short time. Repetition of such tends to be unbearable.

On the humorous, if not tragic, side, the president made the bold claim that inflation was at its lowest level in 50 years, at the precise time that the Federal Reserve is in a death match to avert outright deflation. While the president wishes to point out that low inflation is a grand intention - and it is - the pedals of public policy are being pimped and pumped by the pervicacious pedants at the Fed in exactly the opposite direction, with, thankfully, limited success.

Perhaps, in a perverse and fateful way, the wisdom and wit of Oscar Wilde is prescient:

"There are only two tragedies in life: one is not getting what one wants, and the other is getting it."

By all appearances, neither the Fed, the president, nor the American public's aspirations will be satiated.