There’s not much in the way of “good news” for president Trump lately.
For one, the North Korea summit in Hanoi didn’t work out as planned. And the much-touted March 1 deadline for a U.S. China trade deal is quickly looking unlikely.
Couple this with reports that immigration from Mexico-South America is nearing record levels and a Congress that’s trying to trap Trump for looking at a possible major development in Moscow prior to running for office and…well… it’s beginning to mount up as pressure on the market. And Trump is in Trumpble.
But, it also goes deeper than that. The highly-marketed Make America Great Again notion has faltered again as we read about a “‘Gut-wrenching’ day as production ends at Ohio GM assembly plant.”
To be sure, Trump had, prior to now, been riding a pretty good wave with the stock market rally. However, now that there’s a paucity of good news and what republican consultant Karl Rove describes in a Wall St. Journal piece as an upcoming 2020 “primary from hell” leading into the election, Trump appears to have lost his grip on leadership.
What’s more, the RINO’s may get a boost for a couple of reasons. The first is that the younger tribe of socialist democrats are starting to rebuke the more conservative wing of the party (Pelosi et al). Even more surprising, the lefticrats may lose traditional Jewish backing because there is nominal support for anti-Semitic speech developing at the extreme left. Then there “Grampa Bernie” who can’t be counted out, just yet and he’s beginning to look almost moderate compared to the lefticrat extremists…until he opened his mouth. See Bernie Sanders defends Rep. Ilhan Omar, backs ‘legitimate criticism’ of Israel.
So strong has been the democrat veering to the left (and moving into jingo’ed antisemitism) that Howard Schultz, the former Starbucks CEO is now reputed to be talking to GOP insiders about his plans.. Who would have thought?
Of course nothing surprises UrbanSurvival readers who understand that there’s a 72-year cycle in war-politics. Meaning, we are not surprised that 72-years after the victory over Nazi’s in Germany – the global leader in antisemitism – that beginning in 2017 we would see the rapid return to such debased politics.
Next, we toss in the major widening in the US Trade Deficit, which is splashing-back on the Federal Budget which was looking like crap this week and Donald Trump needs to start landing some body-blows, or his presidency will become something of a flushing festival by history writers. Art of the Flush?
All of which leads to a modest set of expectation-settings changing and that should begin to ripple into the markets, though the real watershed may not come until the Mueller report and whatever’s in that…
Not that it matters, because democrats, regardless of facts, are using mafia-like strong-arming of known Trump associates to permanently retire or impeach this man who “dared to challenge the swamp.” And that swamp is backing them strongly.
Swamp critters, which is what we call the institutionalized bureaucracy in Washington, play a slow and dim-witted game. We can only remind them that the people most injured when the last big country to get “socialism wrong” was the Former Soviet Union. Liberalism begets socialism, and socialism is the false doctrine of communism and when communism fails,there is fertile ground for capitalism. We have approximately no faith in democratic-socialism. (It’s a negative number, in fact).
The Data Matters Ahead of Jobs
Officially, we don’t know until tomorrow, but already we have a couple of indicators that the Job Report seems likely to show another tick upward in the unemployment rate.
This is a critical indicator to watch because as the jobless rate rises more than 1/2 of one percent from its recent lows, the risk of a recession begins to increase geometrically if not exponentially.
Wednesday, the Trump House got some fair news in the ADP Job Report that showed there were 183,000 payroll jobs created in February. That’s the good news.
The bad is just out this morning from Challenger, Gray, and Christmas which as just announced “2019 February Job Cuts: U.S. Employers Announced 76,835 in February.” The details in the CG&C press release are sobering, indeed:
“The shortest month of the year saw the highest number of job cuts in over three-and-a-half years, as U.S.-based employers announced plans to cut 76,835 positions from their payrolls in February. That is 45 percent higher than the 52,988 cuts announced in January, according to a report released Thursday from global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.
Last month’s job cuts are 117 percent higher than the 35,369 cuts announced in February 2018. It is the highest monthly total since 105,696 cuts were recorded in July 2015, primarily due to the U.S. Army’s cutting over 50,000 jobs and tanking oil prices, causing thousands of cuts in the Energy sector.
“Job cuts have been trending upward since the last half of 2018. We continue to see companies respond to shifting consumer behavior, new technology, as well as trade and market uncertainty through workforce restructuring,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
“Meanwhile, Retailers are closing or revamping brick-and-mortar locations, leading to job loss or going bankrupt and cutting their entire workforces,” said Challenger.”
With the pressure building on the farm belt on exports to China, a key trade point, and with an economy that is rolling out new robots, the work of a 45% hike in job cuts in a single month may be what pushes the stock market down in a major way.
Not that it will begin early today; there are some technical reasons why it may not. Plus, a breakthrough on trade over the weekend could help to push out the current bouncing rally from the December lows out to the end of next month, but that’s when the “Sell in May and Go Away” historical trend seems as though it may show up early this year.
After the Challenger numbers, the Dow futures were +23 when we checked, but we would not be surprised if that isn’t some preventive central bank or Economic Stabilization Buying coming in to head off disaster that could be just ahead because when the Wave 2 bounce is over, we’d be looking at a possibly larger decline than we saw into the end of 2018.
And Still More Data…
Productivity report is just out from Labor:
PRODUCTIVITY AND COSTS
Fourth Quarter and Annual Averages 2018, Revised
Nonfarm business sector labor productivity increased 1.9 percent in the fourth quarter of 2018, the U.S. Bureau of Labor Statistics reported today, as output increased 3.1 percent and hours worked increased 1.2 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2017 to the fourth quarter of 2018, productivity increased 1.8 percent, reflecting a 3.7-percent increase in output and a 1.9-percent increase in hours worked.
Annual average productivity increased 1.3 percent from 2017 to 2018.
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers. Unit labor costs in the nonfarm business sector increased 2.0 percent in the fourth quarter of 2018, and increased 1.0 percent over the last four quarters.
Let’s restate that a bit for clarity: Productivity was up 1.8 percent while hours worked was up 1.2 percent. Thanks, automation. Labor costs were only up 1 percent, so the working person’s take wasn’t as much as “owners” gobbled, but they have to buy the automation….see how the long-chain business molecule works?
After the number, the market rose again with futures up 62 on the Dow side of things. Of course, it wasn’t just the US that rebounded: Stock futures pare losses after ECB pushes out rate hike. Apparently, someone in the ECB has now read the same L4L (lower for longer) rate paper written by former Fed boss Ben Bernanke and colleagues. We covered that a few weeks back on the Peoplenomics side of Mr. Ure’s typing factory. Peoplenomics subscribers can refer to our February 16th “Bernanke et al on L4L” paper.
Also Work Knowing
Our poster-child nominee for bad headline of the day goes to CNN for “Women hold the key to fighting climate change.” Yet another division coming, is it?
While the climate myth-selling continues, did you happen to catch this item? U.S. average fuel economy rises. A little. Oh, and without a new tax scam… Use less, pollute less…seems pretty simple to your Outback Economic Clown (OEC).
The HWWTBWG File
They the “harder We Work, The Behinder We Get File:”
CoreLogic Reports Homeowners with Negative Equity Increased by 35,000 in the Fourth Quarter of 2018. Not this year…this is one of those slow-motion stats, but useful.
Last point, since I’m peripherally involved consulting a new cyber security group, stories like this one catch my eye: Fitness club employee secretly took nude photos of tanning customers, posted them online, authorities say.
Can you imagine the battles between insurance companies from this one? I mean if the gym involved even had cyber insurance which statistically only a few percent of businesses do….
This one way how cyber crimes take down companies, because the offending perp was an employee…
Sheesh – WorstWorld, huh…
Chow and more tomorrow…see you then.