Posts Tagged ‘Jobs Report’

Employment Data Were Still Weak

Employment Data Were Still Weak

Courtesy of Bondsquawk 

David Rosenberg, economist for Gluskin Sheff provided more insight on last Friday’s employment report in his daily report, “Breakfast with Dave.”

It’s quite amazing to see what the “take” was on last Friday’s U.S. jobs report. The WSJ was fairly typical of the general response — Jobs Data Provide Hope was the front page headline. That is only true in the sense that the nonfarm payroll number came in above expectations, but the report, while hardly horrible, was still quite weak and highly unusual for an economy operating on so many government-applied steroids.

Returning strikers added 10,000 workers and the Birth-Death model, when accurately measured, contributed a net 17,000 jobs, so strip out these two effects and we actually end up with +40,000, which was bang on the consensus estimate. So, this was not a figure deserving of a triple-digit gain in the Dow (the market rally was again on lower volume) and the spike in bond yields we saw. A huge overreaction to what was still a soft report, in our view, and not one that settles the debate over the prospect of a double-dip recession.

Recall that the month before the Great Recession began in late 2007, the economy managed to generate 97,000 private sector jobs that month. It was the data three-, six- and 12-months later that mattered most and nothing in November 2007 prepared anyone for what was to come down the pike. To be thinking that we are out of the woods because of Friday’s data is just about the biggest mistake anyone can be thinking right now.

The markets are also feeling good because of all the trial balloons being floated over more government stimulus (see more on this below). It’s with that in mind that we decided to reprint this headline from the New York Times, dated November 29, 2007 — Dow Surges on Hints of a Cut in Interest Rates by Michael M. Grynbaum. The article asserted that “Capping a series of wild swings, the Dow Jones Industrial Average soared to its biggest one-day percentage gain in more than four years yesterday after a top Federal Reserve official hinted at another interest rate cut.” Guess what? The Fed sure did end up cutting rates — all the way to zero — and the stock market still went down 60%. Don’t fight


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JOBS REPORT: NOT A PRETTY PICTURE

JOBS REPORT: NOT A PRETTY PICTURE

Courtesy of The Pragmatic Capitalist

It’s becoming more and more clear that the government has failed in its efforts to create a sustainable private sector recovery.  The monetarist bank bailout has failed to create the economic recovery that Ben & Co. said it would generate.  This morning’s job’s data is just one more piece of evidence that shows the private sector remains weak at best.  We’re now almost two years since the peak in the credit crisis and the greatest government intervention in US history and we can’t even generate 100K+ jobs at the private sector level per month.  Via the AP:

“Private employers added new workers at a weak pace for the third straight month, making it more likely economic growth will slow in the coming months.The Labor Department says companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate. The jobless rate was unchanged at 9.5 percent.

Overall, the economy lost a net total of 131,000 jobs last month, as 143,000 temporary census jobs ended.

The department also says businesses hired fewer workers in June than it previously estimated. July’s private sector job gains were revised down to 31,000 from 83,000. May was revised up slightly to show 51,000 net new jobs, from 33,000.”

It would be unwise to overreact to this news, but it’s certainly disheartening for those who are looking for a job or those who are looking for an economic recovery to actually materialize.  The duration of this recession in the labor market is truly depressing.

20100702 JOBS REPORT: NOT A PRETTY PICTURE

(image via chart of the day


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Four-Week Moving Average of Weekly Unemployment Claims Holds Steady near 460,000, No Progress for Seven Months

Four-Week Moving Average of Weekly Unemployment Claims Holds Steady near 460,000, No Progress for Seven Months

Courtesy of Mish 

Tack on another month of no progress with weekly unemployment claims. The 4-Week moving average is still hovering around the 450,000 to 460,000 level where it was in mid-December 2009.

Please consider the Unemployment Weekly Claims Report for July 17, 2010.

In the week ending July 17, the advance figure for seasonally adjusted initial claims was 464,000, an increase of 37,000 from the previous week’s revised figure of 427,000. The 4-week moving average was 456,000, an increase of 1,250 from the previous week’s revised average of 454,750.

Weekly Claims and 4-Week Moving Averages

Last week’s improvement in claims is an outlier primarily related to seasonal discrepancies in auto manufacturing workloads. The 4-week moving average smoothes out such fluctuations and is still hovering above 450,000,

The numbers are consistent with an economy that is losing jobs.

Questions on the Weekly Claims vs. the Unemployment Rate

A question keeps popping up in emails: "How can we lose 400,000+ jobs a week and yet have the unemployment rate stay flat and the monthly jobs report show gains?"

The answer is the economy is very dynamic. People change jobs all the time. Note that from 1975 forward, the number of claims was generally above 300,000 a week, yet some months the economy added well over 250,000 jobs.

Also note that the monthly published unemployment rate is from a household survey, not a survey of payroll data from businesses. That is why the monthly "establishment survey" (a sampling of actual payroll data) is not always in alignment with changes in the unemployment rate. At economic turns the discrepancy can be wide.

It may be quite some time before we weekly claims drop to 300,000 or net hiring that exceeds +250,000.

Mike "Mish" Shedlock


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PREVIEW OF THE JOBS REPORT

PREVIEW OF THE JOBS REPORT

Courtesy of The Pragmatic Capitalist

The steady improvement in jobs data remains one of the primary drivers of equity prices.  As we mentioned last week, the recent dramatic improvement in claims is likely to lead to jobs gains in the coming months.  We think gains could come as early as Friday.   The consensus is currently calling for no change in jobs and a 10.1% unemployment rate.   JP Morgan thinks the risks lie to the upside:

The forecast looks for the economy to finally begin a true expansion in 2010 as business gradually starts adding workers, lifting spending on equipment and software, and eventually rebuilding inventories.

Next Friday’s labor market report is expected to mark a milestone in this transition with the first month of payroll growth since December 2007. To be sure, the December forecast looks for modest job growth of only 40,000 and for the unemployment rate to hold at a lofty 10.0%. But continued declines in initial jobless claims since the week of the December labor market survey and improvement in most employment surveys point to a gradual increase in monthly job gains in coming months.

Leading indicators of unemployment suggest that there are two offsetting effects at work. On one side, the drop in continuing jobless claims indicates that unemployment among people out of work less than six months is still probably moving down. On the other side, longer term unemployment has not shown any signs of even leveling off. Also, participation rates have fallen very sharply in recent months, and as the labor market begins to improve there is a risk that job searchers will return to the market, thereby pushing up measured unemployment.

Recent data points to stronger jobs markets.  The ISM manufacturing showed an improvement in employment to 52 from last month’s 50.8.  ISM non-mfg showed a more dramatic increase this month to 44 from 41.6.  Yesterday’s Challenger report showed a similar trend to claims.

Challenger said layoffs fell to 45K from 50,349 in November and compared against 166,348 in December 2008.   Continuing jobless claims also show improving trends in joblessness.

chall PREVIEW OF THE JOBS REPORT

Of course, it’s important to keep things in perspective.  The recovery on Main Street remains largely non-existent or tepid at best.  The severity of the…
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Michael Shedlock Talks Jobs with Aaron Task

Michael Shedlock Talks Jobs with Aaron Task

Courtesy of Joshua M Brown, The Reformed Broker

Here’s a quickie from Tech Ticker that presents a very sobering view on how persistent a 10% plus unemployment rate could be according to Michael "Mish" Shedlock

Source:

Mish: Nov Jobs Report Looked Fabricated (Yahoo)

 


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US Payrolls Less Than Meets The Eye

The consensus from what I’m reading about the employment report is that the superficially good numbers should not be taken as confirmation of ‘recovery" due to the effect of temporary influences. - Ilene

US Payrolls Less Than Meets The Eye

Courtesy of Mish

In today’s Lunch With Dave Dave Rosenberg shows how US Payrolls Less Than Meets The Eye. 

Today’s employment report is being treated as a ‘green shoot’ of major proportions. While it was by far the best jobs performance of the year, much of the better-than-expected tally in nonfarm payrolls reflected the bounce in auto production as well as the distortion from the federal census workers. Combined, these two influences effectively “added” 100,000 to the headline number, so net-net, the consensus view of -325,000 was not as far off the mark as the market believed at first glance.

The auto sector added 28,200 to the industry payroll in July, which was the highest tally in 11 years. To show you just how big that really is, it is a 69% annualized surge. Normally, the industry, which is in secular decline, posts job losses of between 20,000 and 30,000 consistently, so this alone represented roughly a 50,000 swing. We estimate that there was about a 30,000 swing in the rest of the manufacturing sector due to the spillover from the current inventory adjustment in the motor vehicle industry. The 0.3% MoM increase in the workweek was also skewed by the 4.1% MoM jump in the auto sector.

As we mentioned, there have been large fluctuations in the federal government payroll too. After hiring a slew of Census workers in the spring, there were 57,000 layoffs in May-June and then we saw in today’s report that 12,000 federal workers were “hired” in July. Again, mathematically, this contributed about 20,000 to today’s headline number. In other words, and we have no intent on raining on anyone’s parade, there was about 100,000 non-recurring payrolls in that top-line figure. It may be dangerous to extrapolate today’s report into a view that we are about to fully turn the corner on the job market front.

Yes, the income number was also firm; average weekly earnings popped 0.5%, but again, this reflected the bounce in the auto sector as well as the 10.7% increase in the minimum wage to $7.25 an hour. Again, this is a


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SP500 Faces Critical Resistance as Jobs Report Looms

SP500 Faces Critical Resistance as Jobs Report Looms

Courtesy of Corey at Afraid to Trade

I wanted to do a quick update on the broader technical structure of the S&P 500 in advance of Friday morning’s potentially market moving “Jobs” report.  Let’s take a look:

SP500 faces critical resistance
(Click for Full-Size Image)

The blue horizontal line reflects the resistance at the 1,007 level from the November 2008 highs.

The red Fibonacci lines are drawn from the 1,576 high of 2007 to the 666 low of 2009 and we see the 23.6%, 38.2%, and 50% Fibonacci retracements to the upside of the entire bear market so far.

The important levels to note in this chart – from a technical perspective – are the 1,007 high (which price has not overcome yet) and the 1,014 high (38.2% Fibonacci level).  Also, bearish candles seem to be forming at these confluence resistance levels.

It’s important to note again that the July “Jobs” (Employment) Report will be released at 8:30am EST, an hour before market open.  A better than expected result will likely blow price through these technical levels, while an in-line or weaker than expected number is likely to produce a downward inflection off these levels – locking in technical resistance.

There’s a low-risk (tight stop), high potential reward trade that can be made off current levels particularly if we have a weak open or negative price action stemming from the report.

According to Bloomberg.com’s Economic Calendar, the general consensus is for a loss of 300,000 jobs (the consensus range is from a loss of anywhere from 190,000 to 375,000 jobs) with the unemployment rate rising to 9.7% (but could range from 9.5% to 9.8%).  These are the parameters to watch for unexpected surprises.

If it were as easy as looking at a chart, drawing in lines of expected resistance, and then watching price inflect down simply off these levels, we’d all be rich.  We deal in probabilities and structure, and are at a known level of expected resistance.

Let’s see how the Jobs report will affect the dominant technical structure in play.

Corey Rosenbloom, CMT
 


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Phil's Favorites

Being on the wrong side of this decade's investing mega-trend

 

Being on the wrong side of this decade’s investing mega-trend

Courtesy of 

Josh Brown and Michael Batnick discuss the recent post “I did everything I was supposed to do”, which is the story of a man whose spent his whole career working for asset management firms and now finds himself on the wrong side of the active vs passive debate. There are real world consequences of the massive outflows of cash coming from actively managed mutual funds. This was Josh’s attempt to look at the issue from the other side.

The post spread around the financial web like wildfir...



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Zero Hedge

BMO: Everything Will Change After Tomorrow's "Quad Witching"

Courtesy of ZeroHedge

Don't look to the Fed to explain today's torrid, global rally: according to a controversial take by BMO's bearish technical analyst, Russ Visch, yesterday’s FOMC announcement was a non-event "as markets shrugged off the interest rate decision and follow-up presser with Chairman Powell", and today's action has an entirely different catalyst, resulting in "no change" to Visch's short-term outlook.

And in another contrarian take, Visch claims that "the quality of the rally since late May (narrow participation, extremely light volume) suggest it’s nothing more than a relief rally within an ongoing medium-term downtrend" as shown in the chart below.

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Kimble Charting Solutions

Silver; Multi-Year Bull Market Getting Started?

Courtesy of Chris Kimble.

Is a multi-year bull market about to start in Silver? We should find out soon!

This chart looks at Silver since the early 1970s. It has spent the majority of the past 35-years inside of rising channel (1).

It created a series of flat bottoms and lower highs in the late 1990s. When it broke out at (2), it rallied for years to come, where it gained several hundred percent.

Silver hit the top of this channel back in 2011 at $50, where a long-term bear market started. The 65% decline over the past 8-years has it testing the bottom of this mul...



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Insider Scoop

10 Biggest Price Target Changes For Thursday

Courtesy of Benzinga.

  • Citigroup raised Accenture Plc (NYSE: ACN) price target from $194 to $211. Accenture shares closed at $183.95 on Wednesday.
  • Stephens & Co. boosted the price target for Adobe Inc (NASDAQ: ADBE) from $288 to $327. Adobe shares closed at $291.21 on Wednesday.
  • Credit Suisse boosted the price target on Ferrari NV (NYSE: RACE) from $158 to $185. Ferrari shares closed at $157.83 on Wednesday.
  • Goldman Sachs cut the price target for Tesla ...


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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

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In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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