I just did this podcast with David Frazier of www.integrativeinvesting.com.
David said he thinks the market is currently rallying because people are hopeful that the Fed will engage in a QE money print, but he thinks this is very unlikely. He explained what it will take to really turn around the US economy and what he thinks is going to happen in the stock market.
"Much of the debate about American unemployment has focused on why companies have moved factories overseas, but only 8 percent of the American work force is in manufacturing, according to the Bureau of Labor Statistics. Job growth has for decades been led by service-related work, and any recovery with real legs, labor experts say, will be powered and sustained by this segment of the economy."
Last Friday’s unemployment figures threw a spanner in the works of the ongoing narrative that the US economy was on the recovery, albeit a weak one. Friday’s figures marked the first rise in unemployment (to 8.2%) in nine months. In May, the economy only added a paltry 69,000 jobs. Coupled with fears about the worsening crisis in the euro zone, the Dow Jones went into a tailspin, wiping out all the gains made this year.
According to the Labor Department’s monthly report last Friday, the US unemployment figure for February remained at 8.3%, while 227,000 jobs were created. This is the third consecutive month of job gains over 200,000. Job figures for both December and January were also revised upwards from 203,000 to 223,000 and 243,000 to 284,000 respectively. Thanks to the better-than-expected report, the Dow Jones finished higher for a third straight day last Friday, ending at 12,922.
Contrary to initial expectations, the US unemployment rate for January fell to 8.3%, the lowest since February 2009. (This was the fifth consecutive monthly decline.) Moreover, there was also a net increase of 243,000 jobs, the biggest gain in nine months. In addition, the Labor Department also published revisions showing that another 60,000 more jobs were created in December and November than previously reported.
I am doing a little bit of traveling this week and my trip started with a business stop in Asheville, North Carolina. I stayed there one night and the next afternoon went downtown and got some lunch. They got some of those Occupy Wall Street people there next to city hall and I decided to walk over and see what they are about for myself.
You may have seen some news stories about them. If you live in New York you know about it, because they had big demonstrations and clashes with police in the Wall Street area this last Fall. After that they sprouted up in other cities in public areas.
Retail stocks are getting hit hard today as major discount retailers announce strong headline sales numbers, but analysts must now worry that those sales will not lead to strong profits.
According to Thomson Reuters, retail sales for stores operated by major chains for at least a year were 3.4% higher than they were in December from the December a year ago. This was good on its surface because it was 0.1% more than analysts had been expecting.
For retailers, the holiday season is the most important and profitable time of the year. The holiday season is a great time to find great discounts on practically everything from little toys to cars. However, people do not always fall for the insane discounts and deals. The Recession, although showing signs of improvement, still lingers on for many people. Unemployment has gone down to multi-year lows, however the jobless rate is still north of 8%. This can have a significant impact on retail sales during the holiday season.