JOLT new jobs, small biz optimism, computerized trading is the winner, solar under-performs coal, earnings news, Google battles Oracle, Amazon battles YouTube, Facebook battles Fox; beam me up to the next available planet. Financial Review by Sinclair Noe for 05-10-2016   DOW + 222 = 17,928 SPX + 25 = 2084 NAS + 59 = 4809 10 Y un = 1.76% OIL + 1.22 = 44.66 GOLD + 1.90 = 1266.30   The price of oil matched a six-month high, and companies that drill for oil and refine it also rose. All 10 industrial sectors of the Standard & Poor’s 500-stock index finished higher.   The number of available jobs rose to an eight-month high in March. The Labor Department said 5.76 million jobs were created in March, up from 5.61 million in February. The quits rate — a measure of worker willingness to leave one job for another — stayed at 2.1% in March. The quits rate staying the same shows there’s little evidence of meaningful wage pressure. The Job Opening and Labor Turnover Summary shows the number of job openings are up 11% year-over-year compared to March 2015. A measure of small-business sentiment rose in April, snapping a three-month losing streak that took it to a two-year low. The National Federation of Independent Business’s optimism index rose 1 point to 93.6, slightly better than the 93.1 forecast by economists. Most of the index’s sub-gauges rose or stayed neutral. Only one, the index that tracks views about the future path of the ...

Sinclair Noe interview Steve Case, author of, “The Third Wave: An Entrepreneur’s Vision of the Future”

Everything you need to know about the April 2016 Non-Farm Payroll Report. Financial Review by Sinclair Noe for 05-06-2016 DOW + 79 = 17,740 SPX + 6 = 2057 NAS + 19 = 4736 10 Y + .03 = 1.78% OIL + .29 = 44.61 GOLD + 10.10 = 1288.70 The economy added 160,000 new jobs in April, missing expectations of about 200,000. The unemployment rate held steady at 5%. Employment gains for March and February, meanwhile, were reduced by a combined 19,000. The government said 208,000 new jobs were created in March instead of 215,000. February’s gain was trimmed to 233,000 from 245,000.   In a bit of good news, average wages climbed 0.3% to $25.53 an hour; a gain of 8 cents, up from a gain of 6 cents per hour in March. Hourly pay rose 2.5% in the past 12 months, up from 2.3%, reflecting a tighter labor market. Inflation has been running at about 2%, so workers are seeing real wage growth.   Next week, the Labor Department will announce that it’s doubling the salary threshold under which virtually all workers will be eligible for overtime. (The current threshold is $23,660.) As far back as 1940 it was common for presidential administrations to update the wage thresholds, with 6 revisions over 35 years. The outgoing Carter administration issued a rule to raise the threshold in 1980, but when Reagan took over “revisions to increase the salary levels in 1981 were stayed indefinitely”. It wasn’t until 2004 ...

Time for another edition of “What You Need to Know about Basic Economics.” Today we examine incentives. Incentives are what get people to work harder. Incentives are the motive behind what people do.  People respond to rewards. While preferences are your needs, wants, and desires. Economic incentives provide the motivation to pursue your preferences. Think about why you and the people around you take certain decisions. A mechanic fixes your car not because you need it for transportation, but because you pay him or her to do the repairs. A waiter does not serve you lunch just because you are hungry but because you will pay for the lunch, and if the waiter provides good service, you might become a repeat customer. Incentives can be classified according to the different ways in which they motivate people to take a particular course of action. Remunerative incentives, or financial incentives exist when someone expects material reward – especially money – in exchange for specific goods or services. There are also moral incentives, where someone is motivated to “do the right thing”; the reward is not monetary but rather a sense of approval or improved self-esteem. There are also natural incentives such as the pursuit of truth, or curiosity, or discovery, or mental and physical exercise because it just makes you feel better. And then there are coercive incentives, sometimes called disincentives – where failure to act or failure to act a certain way can result in some form of punishment. An easy ...

Layoffs, arbitration, underperforming hedge funds and junk ETFs; and how I upgraded my smartphone. Financial Review by Sinclair Noe for 05-05-2016 DOW + 9 = 17,660 SPX – 0.49 = 2050 NAS – 8 = 4717 10 Y – .04 = 1.75 OIL + .34 = 44.32 GOLD – 1.40 = 1278.60 The number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year. Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 274,000 for the week ended April 30. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,000 to 258,000 last week.   Another report showed a 35 percent surge in planned layoffs by U.S.-based employers last month. Most of the announced job cuts were concentrated in the energy sector.  Challenger, Gray & Christmas said US-based companies announced 65,141 job cuts last month.   The jobs report for April due out tomorrow morning. Investors will be watching closely to see if it could have any impact on the Federal Reserve’s plans for raising interest rates at its next policy meeting in June. The report is expected to show jobs grew by 200,000 last month while the unemployment rate stayed at 5 percent.  A strong jobs report would be a possible indicator of Fed tightening. An early rally on Wall Street this morning faded into the close.   MetLife said it’s seeking to ...

Economic data, ADP jobs down, productivity drops, ISM holds steady, plus earnings are a confusing mess. Financial Review by Sinclair Noe for 05-04-2016 DOW – 99 = 17,651 SPX – 12 = 2051 NAS – 37 = 4725 10 Y – .02 = 1.78% OIL + .24 = 43.89 GOLD – 7.30 = 1279.40 Private-sector employment gains slowed in April. According to Automatic Data Processing employers added 156,000 new jobs in April; it was the lowest level in 3 years. The ADP report is an early indicator of Friday’s non-farm payroll report from the Labor Department. The Friday jobs report is expected to show about 200,000 new jobs in April, but that’s before the weak report from ADP.   The productivity of U.S. businesses and workers fell by a 1% annual rate in the first quarter, marking the fourth decline in the past six quarters. Over the past year productivity has risen at a 0.6% pace, well below the historic 2.2% U.S. average. In the first quarter, output of the goods and services businesses sell edged up 0.4%. Yet the amount of time employees worked rose a much faster 1.5%. As a result, unit labor costs climbed 4.1% in the first quarter, the biggest increase since the end of 2014. Still, unit labor costs have risen just 2.3% in the past year, little changed from the prior quarter. Higher productivity is the key to better pay and an improved standard of living.   The U.S. trade deficit shrank in March ...

ISDAfix settled, Fed jawbones, Detroit schools closed, and other economic news of the day. Financial Review by Sinclair Noe for 05-03-2016   DOW – 140 = 17,750 SPX – 18 = 2063 NAS – 54 = 4763 10 Y – .07 = 1.80% OIL – 1.13 = 43.65 GOLD – 5.20 = 1286.70   Eurozone growth will be slower than previously expected with subdued inflation in 2016, the European Commission announced in its spring economic forecast, warning of high risks to the bloc’s economy. The GDP of the 19-nation area is now predicted to expand just 1.6% this year, less than the 1.7% growth of 2015, while consumer prices are seen up 0.2%, significantly below the 0.5% increase projected in February.   The Reserve Bank of Australia has cut its official cash rate by 25 basis points to a historic low of 1.75%, the first reduction since May 2015. The RBA noted that inflation was “unexpectedly low,” and it also gave a cautious outlook for the Australian economy. Following the rate cut, the yen surged against the Australian dollar, pushing the greenback below ¥106-yen for the first time in about 18 months.   Federal Reserve Bank of Atlanta President Dennis Lockhart says financial markets may be underestimating the odds of a rate increase in June. Lockhart calls it a real option. At the most recent FOMC meeting Federal Reserve officials signaled that they expect to raise interest rates twice this year, while investors see only one move. If economic theory is any guide, ...

Puerto Rico defaults; TTIP leaks; Ultra, Midstates, and Sports Authority go BK; Sell in May and take a vacation. Financial Review by Sinclair Noe for 05-02-2016   DOW + 117 = 17,891 SPX + 16 = 2081 NAS + 42 = 4817 10 Y + .05 = 1.86% OIL – 1.14 = 44.78 GOLD Puerto Rico’s governor said Sunday that he had ordered a debt moratorium, blocking a $422 million payment due today.  The US Congress continues to debate a legislative fix for Puerto Rico’s $70 billion debt load. The default ratchets up pressure on Congress to find a legislative solution for Puerto Rico, which owes another $1.9 billion of debt on July 1, including about $777 million in general obligation debt backed by its constitution. Meanwhile, Puerto Rico is battling the Zika virus, and hospitals and health clinics are forced to shut down because of debt. New York City has sent one million condoms to help combat the spread of the disease. There is some symbolism there.   The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.8 from 51.8 the month before. A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction. The employment index rose to 49.2 from 48.1 a month earlier. Expectations called for a reading of 49.0. New orders dropped to 55.8 from 58.3. The prices paid index rose to 59.0 from 51.5, compared to expectations of 52.0.   Construction spending increased ...

Audio interview with Edward Humes, author of “Door to Door: The Magnificent, Maddening, Mysterious World of Transportation”

End of week, end of month,  no inflation, dollar soft, Exxon and Chevron get ugly, Woodstock for Capitalists and a dying breed. Financial Review by Sinclair Noe for 04-29-2016 DOW – 57 = 17,773 SPX – 10 = 2065 NAS – 29 = 4775 10 Y – .02 = 1.82 OIL – .11 = 45.92 GOLD + 26.00 = 1293.40 SILV+ .29 = 17.92   Stocks fell for the second straight day, though the averages closed well off their lows. For the week, the Dow lost 1.2%, the S&P 500 down1.2%, and the Nasdaq down 2.6%. The Dow and the S&P 500 ended with month with modest gains while the Nasdaq slipped about 2%. Crude futures closed 11 cents lower at $45.92 a barrel, after hitting a year-to-date high at $46.78. It gained 20 percent in April, the biggest monthly gain in a year.   Sell in May and go away is a well-known trading adage that warns investors to sell their stock holdings in May to avoid a seasonal decline in equity markets. The “sell in May and go away” strategy is that an investor who sells his or her stock holdings in May and gets back into the equity market in November – thereby avoiding the typically volatile May-October period. This idea is based on probabilities, not guarantees, but the probabilities are high. We’ll probably have more on this next week.  Inflation barely rose in March. The Commerce Department said the personal consumption expenditures (PCE) price index, Core PCE, which excludes volatile ...