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Friday, November 06, 2015

Stock Market Read - Sink or Swim on the Jobs Report?

Stocks are likely to mostly slip in early trading Friday after a strong monthly jobs report was published. Positive economic data signals lead investor expectations toward a Fed rate action for December, which while perhaps appropriate is still unsavory for most companies and for good reason. Fear not, though, as this early indicator only has so much punch. Given the fact that the Fed December meeting is still a ways away, and given the seasonal influence of capital flows, I expect stocks to bounce back. I’m looking at the $208 level on the SPDR S&P 500 (NYSE: SPY) as a test point for any declne Friday, and that is where I expect stocks should stabilize and bounce back from. Keep in mind that the important financial sector mostly benefits from higher interest rates and acts as a counterbalance to other equity softness, limiting today’s impact. Also remember that a strong economy justifies higher interest rates and is the best of all long-term drivers for stocks. Though, until the December Fed meeting today’s data point places a cap on the stock market’s upside potential. Keep in mind that more data (economic and other) will follow that could change the dynamics. See the full report on the stock market here.

Market Sectors & Specific Issues
11-06-15 Early Trade
SPDR S&P 500 (NYSE: SPY)
-0.1%
SPDR Dow Jones (NYSE: DIA)
+0.2%
PowerShares QQQ (Nasdaq: QQQ)
-0.1%
iShares Russell 2000 (NYSE: IWM)
-0.2%
Financial Select Sector SPDR (NYSE: XLF)
+1.7%
PowerShares DB US Dollar Bullish (NYSE: UUP)
+1.2%
iShares Nasdaq Biotech (Nasdaq: IBB)
-0.4%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Tuesday, June 09, 2015

Energy Sector Layoffs are Over

Evidence in data reported today seems to show the market free of a heavy burden. Announced corporate layoffs decreased in May from a much higher level in April. The data seems to indicate the damage to the energy industry and its ripples through various economies due to the sharp decrease in energy prices of the past year may finally be coming to an end. If my reading of the situation is correct, it would mark relief from a heavy burden on the overall economy and stocks. See my report on the energy sector. Article interests United States Oil (NYSE: USO), iPath S&P GSCI Oil (NYSE: OIL), Energy Select Sector SPDR (NYSE: XLE), SPDR S&P Oil & Gas E&Ps (NYSE: XOP) and Exxon Mobil (NYSE: XOM).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Friday, March 06, 2015

FRIDAY’S MARKET – Good Jobs News is Bad Market News

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This day will without a doubt be dictated by the most important economic report in terms of market following. The monthly Employment Situation Report certainly deserves the attention today, as it came in astoundingly strong in a period that could have easily shown weakness on bad weather. Nonfarm payrolls and the unemployment rate improved far beyond expectations, which is good news about the American economy. However, that is bad news for investors, because it seems to push the U.S. Federal Reserve closer to interest rate hikes. We cover the market daily at our stock market blog at a level unmatched.

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Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Sector Security
3-5-15
YTD
TTM
Vanguard S&P 500 (NYSE: VOO)
+0.1%
2.5%
14.1%
iShares Dow Jones (NYSE: IYY)
+0.2%
2.8%
13.1%
Fidelity NASDAQ  ETF (Nasdaq: ONEQ)
+0.4%
6.0%
15.8%
ProShares Ultra Gold (NYSE: UGL)
-0.2%
1.3%
-23.9%
ProShares Ultra Real Estate (NYSE: URE)
+0.6%
2.1%
39.3%
ProShares Ultra Oil (NYSE: UCO)
-2.1%
-14.4%
-75.5%
WisdomTree US$  Bullish (NYSE: USDU)
+0.4%
3.3%
15.0%
iShares 20+ Yr. Treasury (NYSE: TLT)
-0.1%
-0.4
21.9%

Economic Report Schedule


Economists and market strategists alike will be focused on one data point Friday. The most widely followed economic report has been released, the monthly Employment Situation Report. It was better than expected for the month of February, but remember, good news is bad news now because of how it affects the Fed’s rate plans.

Nonfarm Payrolls showed job creation of 295K for the frigid month, far better than what was expected at 230K. Though January’s payroll figure was revised lower to 239K; December was unchanged above 300K. Private nonfarm payrolls also beat expectations, marking 288K jobs created versus expectations for 225K. Again the prior month was revised lower to 237K. The unemployment rate improved to 5.5%, where economists thought it would improve to 5.6%, from January’s 5.7%. Labor force participation deteriorated, though, so there will be the usual debate about whether the unemployment rate really tells the story.

Nonetheless, the jobs data was clearly positive, where a negative report could have been blamed on the weather. While revisions may later come, today investors have to contend with the fact that the economy appears to be doing better than expected. That means the Federal Reserve could be backed into a corner and forced to raise interest rates sooner than even they might like to, given recent dollar muscle building. As a result of the super strong report, stock futures moved lower before the open and it looks like the SPDR S&P 500 (NYSE: SPY) will have a slow start to the day.

ECONOMIC REPORT SCHEDULE

Economic Data Point
Prior
Expected
Actual
FRIDAY






-Nonfarm Payrolls
239K*
230K
295K
-Private Payrolls
237K*
225K
288K
-Unemployment Rate
5.7%
5.6%
5.5%
$-45.6 B*
$-41.8 B
$-41.8 B
$14.8 B
$15.0 B
3 PM ET
 *Revised

EPS Report Schedule


Apple (Nasdaq: AAPL) is being added to the Dow Jones Industrial average, which I see as a positive for Apple and the Dow. For Apple, funds that track the Dow must now buy Apple, and so the stock rose 1.6% to start the day. The Dow, and the SPDR Dow Jones (NYSE: DIA) benefit because it is a price-weighted index, and Apple is sure to move the index with its superior price action to the company it replaces, AT&T (NYSE: T). The earnings day includes Staples (Nasdaq: SPLS) and Big Lots (NYSE: BIG).

HIGHLIGHTED EPS REPORTS
Company
Ticker
FRIDAY

Big Lots
NYSE: BIG
Cheetah Mobile
Nasdaq: CMCM
Chimerix
Nasdaq: CMRX
Foot Locker
NYSE: FL
Furmanite
NYSE: FRM
Global Sources
Nasdaq: GSOL
Gramercy Property Trust
NYSE: GPT
KVH Industries
Nasdaq: KVHI
Monroe Capital
Nasdaq: MRCC
New Home Co.
Nasdaq: NWHM
Noah Holdings
Nasdaq: NOAH
OFS Capital
NYSE: OFS
Southcross Energy Partners
NYSE: SXE
Staples
Nasdaq: SPLS
Tribune Media
Nasdaq: TRCO
Vantage Drilling
NYSE: VTG
Verso
NYSE: VRS

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Thursday, February 05, 2015

De Blasio's Blunder & Chris Christie's Crackup Screwed Up the Jobs Report

Regarding the Jobless Claims Report that showed claims lower than expected this week, which some in the media are pointing to as a reason to rally this morning; remember that worst blizzard in history thing? Yeah, well, no matter how weakly it panned out for much of the Northeast, thanks to the perhaps panicked actions of critically important governors and mayors it still paralyzed people across the most congested region of this nation. In Boston and parts of Long Island it actually did snow a lot and kept people indoors too. As a result, the phantom storm likely kept a good number of people from making it to report their loss of employment. And there’s a good reason for the prior week’s weakness as well, so I suggest looking to a different catalyst today if you want a real reason to buy stocks. See our full jobless claims report here. Article matters to SPDR S&P 500 (NYSE: SPY), Vanguard Total Market (NYSE: VTI), Robert Half (NYSE: RHI), Monster Worldwide (NYSE: MWW).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Friday, December 06, 2013

Super Jobs Report Blows Away Fed Fear

good times
November Unemploy- ment 7.0% from 7.3%, Nonfarm Payrolls +203K

The November Employment Situation Report showed sharp improvement in the labor situation. Unemployment improved by far more than the economist community forecast, as did the nonfarm payroll figure. Private nonfarm payrolls, which should be the driver of job growth in America, led the way with an increase of 196K net new jobs created. Visit the blog for more like this.

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Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Jobs Report



Prior Mos.
Prior Revised
Consensus
Actual
Unemployment Rate
7.3%

7.2%
7.0%
Nonfarm Payrolls
204K
200K
180K
203K
Private Payrolls
212K
214K
173K
196K
Ave Hourly Earnings
+0.1%
+0.1%
+0.2%
+0.2%
Ave Workweek
34.4 hours

34.5
34.5

The news was received well by the market. It was a blowout report, meaning that it was so good on the surface that it reassured the investment community that a Fed taper might even be appropriate. Investors are concerned that a premature Fed tapering of asset purchases might stifle a still needy economy. But this data seems to say the economy is standing strongly on its own two feet, and so there is reduced fear of a premature action.

Security
December 6 AM Change
SPDR S&P 500 (NYSE: SPY)
+0.9%
SPDR Dow Jones (NYSE: DIA)
+0.9%
PowerShares QQQ (Nasdaq: QQQ)
+0.8%
SPDR Gold Shares (NYSE: GLD)
+0.6%
iShares Silver Trust (NYSE: SLV)
+1.2%
PowerShares DB US Dollar Bullish (NYSE: UUP)
+0.1%
Bank of America (NYSE: BAC)
+1.1%
Ford (NYSE: F)
+0.2%
Apple (Nasdaq: AAPL)
-0.4%
Google (Nasdaq: GOOG)
+0.9%
Wal-Mart (NYSE: WMT)
+0.5%
Amazon.com (Nasdaq: AMZN)
+0.7%
Darden Restaurants (NYSE: DRI)
+1.1%
Health Care Select Sector SPDR (NYSE: XLV)
+0.9%
MetLife (NYSE: MET)
+2.1%
SPDR S&P Homebuilders (NYSE: XHB)
+1.2%

As you can see in the table above, stocks are broadly higher Friday morning, save Apple (AAPL) curiously enough. The table here offers a good representation of much of the market in my view, including areas where better labor data would show up more strongly. This is exaggerated in the insurance firms like MetLife (MET), because their assets include other financial securities (it’s like a derivative). The consumer sensitive stocks are well-represented here, with the two major retailers online and on the street in Amazon.com and Wal-Mart included. Darden Restaurants’ casual dining locations are a step up from the McDonald’s (NYSE: MCD) of the world, and benefit when the economy improves.

It’s interesting that gold and silver are higher along with the rest of the market and the dollar. What we have is one of those days when betas align and the tide takes all ships with it. It happens when news is good or bad enough to affect all capital flows into investment assets.

The market could use more economic data like this. Blowout figures that ease investor concern about the Fed taper allow the Fed to appropriately hedge against inflation without hindering economic growth. I started this article with the words telling how good the report was “on the surface,” and unfortunately that accurately implies that below the surface, they remain imperfect. The U-6 figure improved nicely this past month to 13.2%, and you can bet that news is helping to ease investor concern about the missing unemployed. You’ll recall that the U-6 figure reclassifies part-timers and the marginally attached to the labor force, considering them like unemployed; it is the underemployment rate. However, it still misses important changes in the labor force, when people disappear from the radar because they are now collecting disability checks; or if they are unemployed and undocumented; or operating in the black market. Still, the improvement in the U-6 from 13.8% to 13.2% is enough to clear away investor concern about this issue.

No matter what, the investment community is likely to eventually take Fed tapering badly, at least initially. Still, the more support we can get from the economic data, the more confident we can be in our outlook. Risk acceptance follows along with continued investment in equities. If the data keeps coming in strongly, the reaction of the market when Fed tapering finally starts will be shorter lived than if Fed tapering started before such supports were in place. In other words, we'll be able to stand on our own two feet and the stock trend will continue higher.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Thursday, March 14, 2013

Would Obama Prefer 7.1 Million Unaccounted for Jobless Americans Just Drop Dead?

cemetaryBy Markos Kaminis:

Major media is celebrating another decline in the flow of initial jobless claims today, but it’s missing the story on the long-term unemployed. It is certainly good news that new filers for unemployment benefits are declining in numbers as the weeks progress. However, it’s unacceptable that the long-term unemployed whose benefits have expired fall off the radar and are unaccounted for, and perhaps left to die.

The Department of Labor’s Weekly Initial Jobless Claims Report showed yet another improvement for the period ending March 9. Claims fell by 10K from the prior week and measured 332K. That was far below the expectations of the economists surveyed by Bloomberg, who in their infinite wisdom foresaw an increase this week to 350K. The four-week moving average for jobless claims illustrated the trend that both market and media seem to be celebrating today. The average declined by 2,750, to 346,750. Not coincidentally, the SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrials (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) were each safely in the green through early trading. The shares of employment services firms Robert Half International (NYSE: RHI) and Monster World Wide (NYSE: MWW) were relatively unchanged through 10:00 AM and better reflected the slow pace of hiring activity in this country.

The report is undoubtedly good news if you have a job. Your job security is improving. However, for those of you who have been unemployed for more than 27 weeks or longer, some 40% of the total unemployed count, the government doesn’t know you exist any longer. We’re assuming you’ve retired comfortably and are living out your last days without a care or concern. If you are still active, we expect you’ve started up a solar panel company after all of our efforts to make your sweet solar dreams come true.

The truth, though, is that those poor people have lost their homes, crammed into apartments with higher rent rates along with other struggling souls, and are either selling furniture on Craigslist or walking dogs under the table to keep from eating further into their savings. Otherwise, perhaps they are members of the mass of people, some 1 in 6 Americans, collecting food stamps and hopefully still being accounted for by the government as a result. Somehow, I doubt the accounting is perfect though. Have you ever been to one of these offices? From what I hear, you’ll feel better putting a pencil through your eye, especially if it’s a lead pencil (the poisoning will help); just imagine the Department of Motor Vehicles times ten and that’s what you would experience if you got the bright idea to try to collect food stamps or some other relief our taxes and our government provide for us… at least that’s what I hear. I invite you to share your experiences in the comment thread below for the enlightenment of the rest of us.

The Jobless Claims Report shows the total number of Americans receiving benefits of some sort under all programs actually increased by approximately 218K in the measured period ending February 23rd. However, at 5.6 million that figure was down sharply from last year’s 7.4 million. Certainly some of the difference in the count is represented by very happy Americans that are once again holding jobs. However, it also includes a bunch of people you might now inaccurately refer to as bums. Indeed, my latest analysis of the Employment Situation Report shows that there has been a significant change in the labor force participation rate over the last seven years. If we had the same proportion of our population in the labor force count today as we did in 2006, unemployment would be 11.8%, not 7.7%, and underemployment would be 18%! Furthermore, the trend in February would have been reported as deteriorated and not improved, as the government data expressed. That’s a tough chew, and it runs counter to the enthusiasm stocks are trading on today. The fact is that some 7.1 million Americans are missing. Are they assumed to be happily retired? Perhaps the government would prefer they just drop dead already?

It’s a good thing that big layoffs from large companies are declining in number, but we’ve still recorded big cuts at big firms like J.P. Morgan Chase (NYSE: JPM) and Citigroup (NYSE: C), and a little scrape at Goldman Sachs (NYSE: GS) recently. And the news from the nation’s small businesses has not been good, with the NFIB’s Small Business Optimism Index marking lower ground than the troughs of recent recessions this month. Small businesses do a lot of the hiring and firing in this country, so there’s little hope for the long-term unemployed who have been left to die. We need to address this issue by making it a priority in corporate America to prioritize Americans for jobs who have been unemployed longer; that’s if we care to revive our economy to its once super-healthy status. Government incentives to corporations which do so would be helpful in that regard. Those readers interested in critical analysis of data are welcome to follow along with this column.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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