Markets: Hanging on Jobs and Trade

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Reminder:  Today is the last day of Medicare Open Enrollment.

As expected, stock market action was swinging wildly Thursday for multiple reasons, depending on which channel you happened to be watching:

Some thought it was because of uncertainty over the Jobs report.  But, since that’s just out today, we can review it for surprises right now:

“Total nonfarm payroll employment increased by 155,000 in November, and the unemployment rate remained unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, and in transportation and warehousing.

Household Survey Data

In November, the unemployment rate was 3.7 percent for the third month in a row, and the number of unemployed persons was little changed at 6.0 million. Over the year, the unemployment rate and the number of unemployed persons declined by 0.4 percentage point and 641,000, respectively.

Among the major worker groups, the unemployment rates for adult men (3.3 percent), adult women (3.4 percent), teenagers (12.0 percent), Whites (3.4 percent), Blacks
(5.9 percent), Asians (2.7 percent), and Hispanics (4.5 percent) showed little or no change in November.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 120,000 to 1.3 million in November. These individuals accounted for 20.8 percent of the unemployed.

Both the labor force participation rate, at 62.9 percent, and the employment-population ratio, at 60.6 percent, were unchanged in November.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 4.8 million, changed little in November. These
individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

The Jobs Report is augmented by the CES Birth-Death Model.  This is where the Labor Department struts its statistical stuff by inferring how many jobs, of what stripe, have been created but for technical reasons aren’t included in the main job report.  As you can see in the summary for the year, it bounces around a bit.  Last month, the CES Model contributed 246,000 jobs.  this month, it took away 9,000.

29,000 more jobs in goods-producing, but 132,000 more in services.  Average weekly earnings were down from $941.51 to $940.84.

After the data, the Dow futures were down 40 and Europe was up a fair bit with the U.K. leading, up 2% at click time.

The Trade War is ON

The arrest last week of Huawei CFO Meng Wanzhou, for allegedly breaking the US – Iran embargo, has sent a terrible chill through the land of mahogany foxholes.

While American execs are now fearful of going to China – since diplomatic tit-for-tat is real, the Chinese back home are demanding her release.

What all this tells us are two important things:

  • First -despite the G20 after-hype – there is no reason to believe that the War of Trade is anywhere near resolution.  All that has happened here is that we’ve gone from charging dollars to charging people.
  • It also tells us something about how our own country conducts business.  China is not a U.S. state, yet we claim an ability to tell them how to conduct their affairs with Iran IF they have businesses that have a substantive presence in the USA.  Do business here, and it’s by U.S. rules.

Admittedly, we’ve been a bit hard, at times, on the European Union for such megalomania – trying to impose worldwide revenue penalties on Google (Alphabet) for example.  But the “Huawei baby” (with apologies to Frankie Ford) crisis makes it clear to us that State Power Tripping is contagious.  The only historical question is “Which country was Patient Zero?”  Anything to dig at us as Russia says detention of China’s Huawei CFO shows U.S. arrogance.

Regardless, in American management circles, we are seeing an overnight flip from “Great bonus to go to China” to “Suck-it-up or you’ll be sent to China…”  You might not want to be the corporate travel planner for US automakers who’ve staked their fortunes on the Chinese market.  More to the point Huawei arrest stokes fears of China reprisals among America Inc executives.

The One Chart That Matters

Is still this one…

My consigliere reassured me Thursday that due to corporate governance and SEC rules, there is no way corporations could possibly play the kind of shenanigans suggested in Thursday’s column.

While we believe he’s right, some quiet reflection has us wondering:  “How is it a Business – making robots to replace ourselves and building AI that can out-smart us and take our cars away?”  Just logical thinking makes it seem like a possible “dead-ender” to us..  It’s in the same pile with “If LBGT is on the rise, should anyone become a teacher?”  Fewer kids, fewer schools? Or, is THAT why the borders need to be open…(my head begins to ache)  You know:  input/output thinking..

Speaking of which:  You see where AI is now able to do some inferring?  Flip over to Yahoo and read “DeepMind’s AlphaZero now showing human-like intuition in historical ‘turning point’ for AI” and tell me at least some fraction of the population isn’t replaceable…  (Friday is when i used to play “Which co-workers should we fire?”  Mind-games between bouts of real work…Made up for the fact clocks run slower from noon to quitting time Friday than any other day of the week…)

Stormy Friday

Let’s talk about wet spots.  Specifically this from the National Weather Service…

..Winter storm to bring ice and snow from the southern plains to the Appalachians, and heavy rain from eastern Texas to Georgia…

A strong storm system crossing the Desert Southwest early Friday morning will take a southerly track across the southern plains to the Deep South and then the southeast U.S. coast through the weekend. Snow and freezing rain is forecast to overspread eastern New Mexico and the Texas/Oklahoma panhandles by late Friday, and continuing into early Saturday. The greatest snowfall accumulations through early Saturday are expected across the southern High Plains from eastern New Mexico and across parts of the Texas Panhandle, with amounts on the order of 3 to 6 inches and locally higher. In addition, ice accretion of about a tenth of an inch, perhaps higher, will be possible on the southern edge of the heavier snow band, roughly from Lubbock to Oklahoma City.

In the warm sector of the surface low, heavy rain is forecast across southeast Texas in response to a deep surge of moisture from the Gulf of Mexico. The Weather Prediction Center currently has a Moderate Risk of excessive rainfall for Friday and Friday night for much of southeast Texas, with several inches of rainfall expected. The rainfall rates are expected to be high at times, increasing the threat of flooding. Flash flood watches are also in effect for this region. A slight risk of excessive rainfall exists through Saturday night for the central Gulf Coast region as heavy bands of showers and thunderstorms develop in conjunction with the surface low and a deep moisture surge ahead of it.”

Our best wishes to readers who are stuck traveling through this crap to trade shows and such.  We had half an inch in the gauge overnight, but we’re expecting 5-inches by tomorrow…

Caravan Notes

As “Migrant caravan hurts tourism in Tijuana: ‘They’re kind of scared'” we also see how the media continues to sell the liberal open border (a/k/a no border) angle by running stories like “Honduran woman in migrant caravan gives birth in US.”

Like the Trump-bashing stories, we see the institutional media trying to figure out how to generate excitement (which means ratings which means money) with little changed from last week.  Something for everyone, perhaps?  Look for breaking news about twins born to border jumper next…

Everything’s a Business Model...including Trump, Border, and Mueller coverage.  Which is also going nuts with little new in reality other than 50-shades of “who can read through redactions” and other alt. press pass times.

Real Worry: Solar Outlook Dims

With it, the odds of dramatic global warming continues to fade awhile famine due to cooling seems ascendant.  Just in time for the next Al Gore warming telethon, is it not?

We did some work for Peoplenomics subscribers earlier this week where we laid out the latest on the Solar Cycle Progression and penciled in the just-released year-ahead forecast data to see the Big Picture. The results are not pretty but are of general interest:.

As we told you was possible, we are now looking at some extension of the solar minimum (and cooling)…How long the extension lasts will determine your waistline in five years, or less.

As with Bitcoins (down to $3,393 this morning BTW) our “healthy skepticism based on data” approach to life continues to make sense.

A Novel Plot

U.S. goes to the moon.  Eventually, China’s Lunar Mission Could See a Spacecraft Land on the Dark Side of the Moon.

Picture a war on Earth over ownership of the Moon…like it?

Looking Ahead

Keep an eye on the market just after 3 PM (Eastern) today because that’s when the Fed Consumer Debt report comes out.  Cynically, it’s the hook, line, and sucker report.  Debt growth is critical to any rebound.

There’s a minor “job openings” report due Monday and then Producer Prices Tuesday.

Next week’s big action will be Consumer Prices and Core Inflation (because the Fed ignores food & energy in their figuring) Wednesday.

Import prices Thursday and Retail Sales Friday, which – when we toss in the trade worries – doesn’t seem like much for the market to gain ground on.

Prepping articles this weekend involve hobbies that can make (or save) money…

With that, time to go feed the brain something – a small reward for stumbling through another morning… Bean on, brothers and sisters!  Ya’ll come back Monday morning, y’hear?

17 thoughts on “Markets: Hanging on Jobs and Trade”

  1. George – the one chart that matters is indeed a very interesting picture of historical price action, the Euro Stoxx the Dow/S&P is the one that has my interest and attention.
    Either the US market is way Overvalued, or the Euro Stoxx are way Undervalued. Due to the fact stocks in the Euro Stoxx50 are almost all Global Corporations…seems to me somebody has the market Valuations all wrong.
    My money says the US markets are overvalued compared to Euro market, and will be “regressing” to their means..eventually.
    As a great USN admiral once pronounced in the midst of battle – “Damm the torpedoes, full speed ahead!”

    • I’d guess the Euro market has a negative value if they posted 3% interest rates. Draghi has screwed the EU up irretrievably. The EU is in breakup mode and Germany et al are about to crash and burn! JMHO

  3. Witha solar minimum it’s more than waistlines to be concerned about.

    Weaker immune systems from poor nutrition combined with antibiotic resistance, flu, Ebola, etc.

    War in and of itself hardly seems nessecary to thin the herd.

  4. have a hunch The arrest of Huawei CFO Meng Wanzhou, goes far beyond breaking the US – Iran embargo. Spies and national security might be closer to the truth. In LIGHTS OUT Ted Koppel said China has already hacked into our grid and can basically destroy us anytime they want. Logic says Trump wouldn’t bring his trade negotiations with China to a screeching halt over Iran. So many new weapons that can kill us not even counting the old weapons. Living in a spy vs spy world

  6. Hi George, surely I could not have been the only stargazer who knee-jerked at the term “dark side of the moon.” The linked article did mention the correct astronomical term “far side of the moon” but then justified the other phrase by saying that dark meant “comparatively unknown.” Pish-posh. Pink Floyd aside, every object that orbits a star (like us) is always half dark and half light, the technical term is “night and day.”

      • I’m pretty sure the aliens told the first Apollo craft not to linger over the dark side and not to take any pictures. Do you suppose the Chinese will tell them to f@#k off, and land anyway. What is the equivalent of “Yes Virginia there is a Santa Clause?” in Chinese.

  7. Friendly reminder to dust off Robert Felix’s book, Not by Fire But by Ice. The cold will come, Gaia will shiver and shrink, the faults will buckle, and fire will take its turn. As global warming is predicated on human activity, the question is who will win the tug of war and have the greater impact – humans or Nature? I’m here smiling about all of those power plants and furnaces burning anything carbon-based to generate heat to keep everyone warm. The irony…

  8. I always get a laugh at the Al Gore scam. It seems everywhere he goes Mother Nature seems to prove him wrong at every place. He goes to speak about global warming and it is either setting record cold temps or its snowing. The fact that so many people believe this pap of Global Warming or now Climate Change, show how much our education system has failed us all. But especially those now getting indoctrinated into the Climate Change hoax. I know there are people that will see this and start the mantra of science; science; science. Well as Ure has pointed out in the past, there are two sides to that coin. But the scientist that show the hoax are shouted down and attacked. But common since, which we have an epidemic lack of, tells us that we aren’t as powerful or capable to actually change or effect the weather and this planet. https://www.youtube.com/watch?v=7W33HRc1A6c. George Carlin has it sooo right-on. It takes a comedian to help the Climate Change parishioners see the ignorance and failing of their religion. Not to mention the control leaders want and tax ramifications. Look at France and see the cause and effect of attempting to enforce the climate change tax.

  9. Canada arresting Meng Wanzhou at the request of the USA is the most insane thing they could have ever done, unless there’s hard evidence that she’s a real spy. I’m surprised it’s not the headline of this column! Canada is at the mercy of China even more than the USA, and how would WE react if China arrested Ivanka Trump?

    I generally go along with most of the USA policies for better or worse(since Obama), but this one is not recoverable. The best thing to do would be for the USA to tell Canada to release her and give her massive compensation for their error, and hope China doesn’t retaliate too badly. The USA, in turn, had better be prepared for more than a trade war – a significant hot war is credible.

    Canada must have been smoking too much of their newly legalized herb. They’ve really stepped into the septic tank on this one.

    • This whole spy thing has a smell and dont think is sweet. Could it be the competition about the coming 5G world is scaring the big players world wide? Gotta be more to this picture for the US to have pulled a stupid stunt like this and blamed on the Iranians.

    • On 7 December, it was revealed that the arrest warrant was issued on 22 August 2018 by the United States District Court for the Eastern District of New York.

      EDNY is Richard Donoghue’s jurisdiction. It covers Kings, Queens, Long and Staten Islands, and a few shards of NYC proper. Donoghue is a Sessions appointee, but I know nothing about his politics. ‘Seems to be a highly-aggressive jurist, though.

      I can’t fathom popping Meng though. She’s CFO and deputy COB of Huawei, which means she’s high-up in the Party. Arresting her like a common prole would be a pretty damn’ serious insult to all the mucky-mucks in the Party, and something Xi would probably take personally. ‘Makes me wonder if this is actually an attack on Mr. Trump, and any potential deal he might eventually work out with the Chinese…?

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