Stocks surged on the robust jobs report – piercing Dow 17,000 in the first few mins of trading – No - there were no bells and whistles, no balloons falling from the ceiling, no band playing “Celebration”….it was just another day as what does 17K really mean? The strength clearly attributed to the non-farm payroll report showing that U.S. employment rose much more than expected in the month of June while the unemployment rate fell from 6.3% to 6.1%.
Not so fast – there sports fans – Take a look at the Washington Post article - It states it loud and clear : -
"More Americans are Stuck in Part-Time Work"
"In the new landscape of the American labor market, jobs are easier to come by but the hours remain in short supply"
On the face of it – the report was better than expected – right? I mean +288k vs. the expectation of +210k……but look closer will you? This latest report showed that New “part-time” jobs represented 95% of the total report. So of the 288k jobs created - 274,000 were part time. In addition – the number of workers who were shifted into “part time” status was an astonishing 840K, nearly triple the number of new jobs added.
While this has no “net effect” on the new jobs number – it is none the less a worrisome trend.
And this does NOT even take into account what is going to happen when Obamacare finally fully kicks in – in 2015….think about all of the people who will be shifted into ‘part time status’ as employers cancel healthcare benefits to cut costs and boost the bottom line- the numbers could be exponential……I mean - I'm just sayin......This is a problem....Anyone see Nancy Pelosi lately or is she still reading the ACA legislation? I mean - you can't make this up.....
Next up - Joseph Stiglitz - the Nobel winning Economist told CNBC on Monday that he is "very uncomfortable with current stock prices" and that indices trading at new highs does not mean a strong economic recovery in the US. Saying:
"The reason the stock market is high, in part, is that interest rates are low, wages are low and the emerging markets are still growing much faster than the U.S. economy, let alone Europe. "
He points out that so many U.S.-listed companies (multinationals) are earning an "increasingly large chunk" of their profits from the emerging markets.
"These very strong stock market prices are in a sense a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy," he said.
Will we have a 'Stiglitz moment" today? Will traders/investors react to this latest salvo on the current state of affairs?
OK - back to other news....in the movie Forest Gump - Forest uses the line:
"Me and Jenny goes together like peas and carrots"....
.in the latest international banking circles - we've got more than peas and carrots.....we got the whole vegetable kingdom.....– The FED, the ECB, The BoE, The BoJ, The PBoC and the IMF.
You see – over the weekend – Christine Lagarde – managing Director of the IMF had a lot to say at the "Cercle des Econmistes" (Circle of Ecnomists) conference in Aix-en-Provence France – where she hinted that the IMF was about to cut its global growth forecast yet again (even as the US is rebounding) – noting that investment remains weak and risks remain in the US – despite a growing US economy. -
“The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower..investment remains lacklustre”.
In the end – her speech and the change in forecast will provide further reason for central bankers to remain dovish and err on the side of caution – so you see – they are trapped like rats and will have to keep the wheels of stimulus turning - (which translates into higher equity prices.)
On the other hand – she is convinced that Asian economies (read China) will not experience a ‘hard landing’ in fact –
"Looking at emerging Asian countries, and in particular China, we are reassured because we do not see a brutal slowdown but rather a slight slowing of a growth that has become ... more sustainable and that we see at 7 to 7.5 percent this year."
And what of Europe? She is of the opinion that Europe remains weak – with both inflation and growth running below par – suggesting that the stronger member countries will have to shoulder the burden (I think she is talking about Germany here)…..This will give Uncle Mario the cover he needs to remain loose – and all this means what? Most assuredly higher stock prices ahead…..and the world turns…
As Americans celebrated Independence Day on Friday – US mkts were closed – so Asian mkts overnight Sunday - looked to Europe to show them the way…and on Friday – most European mkts ended the day lower with the exception of the UK…..That mkt ended the day in positive territory and is now within striking distance of 15 year highs…..which only means that the record is sure to be broken in the not so distant future.
Speaking of records - Now the question is - will the S&P rally and challenge the next century mark (2000) anytime soon? My gut tells me yes (even with Joe's warning). Look - the S&P cash closed at 1985...so a move to 2000 is only 7/10th of 1% .....or 15 points.....and with a fair amount (both economic and geo-political) on the calendar this week - traders and investors will have a lot to ponder....
I expect - like the Dow - the mkt will tease with 2000, then back off and tease again....building up the momentum until we get ignition and hit the point of no return........then BOOM!
Today we had BoJ governor Kuroda speaking at a bankers conference in Japan while 6 world powers and Iran hold nuclear talks as they try to reach an agreement.
Tuesday - AA reports - now this is not as significant as before - remember - she used to be the first DOW stock to report - not anymore....so the excitement must wait until we hear from JPM on July 15th....WFC (not a DOW component) reports this Friday - so we will get a taste of what to expect from the financial services/banking giants.....
S&P futures are a bit lower this morning - down by 2.5 points - trading at 1975.....but this is not a surprise...as I suspect the mkt will take a bit of a breather before the push higher. Once the S&P clears the hurdle - traders and investors should expect some consolidation and a pullback .
Earnings season will be the driver during the next 3 weeks as traders focus on the 'future guidance' - Analysts expect a 4 - 5% earnings growth rate this quarter while they expect double digit growth in the 3rd and 4th quarters. Look for the usual - 72% of all reports to handily beat the estimates.....
Overnight in Asia - equities drifted down from last week’s 6 yr high, following a lack of news in the region in addition to US mkts being closed on Friday. Key events this week besides the start of the US earnings season are Japanese trade figures on Tuesday, China inflation data on Wednesday and Australia’s monthly jobs report on Thursday. Japan -0.4%, China +0.03%, Hong Kong -0.02% and ASX -0.11%.
In Europe - mkts are lower....as German Industrial Production disappoints (big time). The report showed a 1.8% decrease month over month. That coupled with the start of the earnings season is causing some caution. FTSE -0.22%, CAC 40 -0.46%, DAX - 0.2%, Eurostoxx -0.32%, Spain -0.5% and Italy -0.31%
Take good Care
This is a great, easy dish and contains everything you need in one dish. Meat, veggies and mashed potatoes.
For this you need: Carrots, onions, potatoes (for mashing) olive oil, ground beef (chuck), butter, frozen peas, canned corn, tomato paste and a shot of red wine (optional).
Boil the potatoes and mash with butter and cream - set aside.
Sauté chopped carrots and onions in some olive oil until soft - 8 / 10 mins....add ground beef - but use ground chuck - as it has a higher fat content and gives the pie a robust juicy flavor. Season with S&P. Once all browned and cooked nicely - drain any of the fat that has accumulated. Add about 2 tablespoons of butter, frozen peas and the canned corn. Mix well. Next add tomato paste (Contadina always works nicely) and a shot of red wine - let simmer for a bit. (maybe 12 / 15 mins). Turn off the burner and get a baking dish. Grease with butter and add the mixture. Top this off with homemade mashed potatoes and sprinkle some grated parmegianna cheese on top.
Put in the oven and bake for about 20 mins or until the mashed have a golden brown tint.
When done - remove from oven - and let stand for 5 mins. Serve on warmed plates. Gather the family -and enjoy your time together.
Buon Appetito.
Not so fast – there sports fans – Take a look at the Washington Post article - It states it loud and clear : -
"More Americans are Stuck in Part-Time Work"
"In the new landscape of the American labor market, jobs are easier to come by but the hours remain in short supply"
On the face of it – the report was better than expected – right? I mean +288k vs. the expectation of +210k……but look closer will you? This latest report showed that New “part-time” jobs represented 95% of the total report. So of the 288k jobs created - 274,000 were part time. In addition – the number of workers who were shifted into “part time” status was an astonishing 840K, nearly triple the number of new jobs added.
While this has no “net effect” on the new jobs number – it is none the less a worrisome trend.
And this does NOT even take into account what is going to happen when Obamacare finally fully kicks in – in 2015….think about all of the people who will be shifted into ‘part time status’ as employers cancel healthcare benefits to cut costs and boost the bottom line- the numbers could be exponential……I mean - I'm just sayin......This is a problem....Anyone see Nancy Pelosi lately or is she still reading the ACA legislation? I mean - you can't make this up.....
Next up - Joseph Stiglitz - the Nobel winning Economist told CNBC on Monday that he is "very uncomfortable with current stock prices" and that indices trading at new highs does not mean a strong economic recovery in the US. Saying:
"The reason the stock market is high, in part, is that interest rates are low, wages are low and the emerging markets are still growing much faster than the U.S. economy, let alone Europe. "
He points out that so many U.S.-listed companies (multinationals) are earning an "increasingly large chunk" of their profits from the emerging markets.
"These very strong stock market prices are in a sense a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy," he said.
Will we have a 'Stiglitz moment" today? Will traders/investors react to this latest salvo on the current state of affairs?
OK - back to other news....in the movie Forest Gump - Forest uses the line:
"Me and Jenny goes together like peas and carrots"....
.in the latest international banking circles - we've got more than peas and carrots.....we got the whole vegetable kingdom.....– The FED, the ECB, The BoE, The BoJ, The PBoC and the IMF.
You see – over the weekend – Christine Lagarde – managing Director of the IMF had a lot to say at the "Cercle des Econmistes" (Circle of Ecnomists) conference in Aix-en-Provence France – where she hinted that the IMF was about to cut its global growth forecast yet again (even as the US is rebounding) – noting that investment remains weak and risks remain in the US – despite a growing US economy. -
“The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower..investment remains lacklustre”.
In the end – her speech and the change in forecast will provide further reason for central bankers to remain dovish and err on the side of caution – so you see – they are trapped like rats and will have to keep the wheels of stimulus turning - (which translates into higher equity prices.)
On the other hand – she is convinced that Asian economies (read China) will not experience a ‘hard landing’ in fact –
"Looking at emerging Asian countries, and in particular China, we are reassured because we do not see a brutal slowdown but rather a slight slowing of a growth that has become ... more sustainable and that we see at 7 to 7.5 percent this year."
And what of Europe? She is of the opinion that Europe remains weak – with both inflation and growth running below par – suggesting that the stronger member countries will have to shoulder the burden (I think she is talking about Germany here)…..This will give Uncle Mario the cover he needs to remain loose – and all this means what? Most assuredly higher stock prices ahead…..and the world turns…
As Americans celebrated Independence Day on Friday – US mkts were closed – so Asian mkts overnight Sunday - looked to Europe to show them the way…and on Friday – most European mkts ended the day lower with the exception of the UK…..That mkt ended the day in positive territory and is now within striking distance of 15 year highs…..which only means that the record is sure to be broken in the not so distant future.
Speaking of records - Now the question is - will the S&P rally and challenge the next century mark (2000) anytime soon? My gut tells me yes (even with Joe's warning). Look - the S&P cash closed at 1985...so a move to 2000 is only 7/10th of 1% .....or 15 points.....and with a fair amount (both economic and geo-political) on the calendar this week - traders and investors will have a lot to ponder....
I expect - like the Dow - the mkt will tease with 2000, then back off and tease again....building up the momentum until we get ignition and hit the point of no return........then BOOM!
Today we had BoJ governor Kuroda speaking at a bankers conference in Japan while 6 world powers and Iran hold nuclear talks as they try to reach an agreement.
Tuesday - AA reports - now this is not as significant as before - remember - she used to be the first DOW stock to report - not anymore....so the excitement must wait until we hear from JPM on July 15th....WFC (not a DOW component) reports this Friday - so we will get a taste of what to expect from the financial services/banking giants.....
S&P futures are a bit lower this morning - down by 2.5 points - trading at 1975.....but this is not a surprise...as I suspect the mkt will take a bit of a breather before the push higher. Once the S&P clears the hurdle - traders and investors should expect some consolidation and a pullback .
Earnings season will be the driver during the next 3 weeks as traders focus on the 'future guidance' - Analysts expect a 4 - 5% earnings growth rate this quarter while they expect double digit growth in the 3rd and 4th quarters. Look for the usual - 72% of all reports to handily beat the estimates.....
Overnight in Asia - equities drifted down from last week’s 6 yr high, following a lack of news in the region in addition to US mkts being closed on Friday. Key events this week besides the start of the US earnings season are Japanese trade figures on Tuesday, China inflation data on Wednesday and Australia’s monthly jobs report on Thursday. Japan -0.4%, China +0.03%, Hong Kong -0.02% and ASX -0.11%.
In Europe - mkts are lower....as German Industrial Production disappoints (big time). The report showed a 1.8% decrease month over month. That coupled with the start of the earnings season is causing some caution. FTSE -0.22%, CAC 40 -0.46%, DAX - 0.2%, Eurostoxx -0.32%, Spain -0.5% and Italy -0.31%
Take good Care
Classic Shepard's Pie
So speaking of vegetables -This is a great, easy dish and contains everything you need in one dish. Meat, veggies and mashed potatoes.
For this you need: Carrots, onions, potatoes (for mashing) olive oil, ground beef (chuck), butter, frozen peas, canned corn, tomato paste and a shot of red wine (optional).
Boil the potatoes and mash with butter and cream - set aside.
Sauté chopped carrots and onions in some olive oil until soft - 8 / 10 mins....add ground beef - but use ground chuck - as it has a higher fat content and gives the pie a robust juicy flavor. Season with S&P. Once all browned and cooked nicely - drain any of the fat that has accumulated. Add about 2 tablespoons of butter, frozen peas and the canned corn. Mix well. Next add tomato paste (Contadina always works nicely) and a shot of red wine - let simmer for a bit. (maybe 12 / 15 mins). Turn off the burner and get a baking dish. Grease with butter and add the mixture. Top this off with homemade mashed potatoes and sprinkle some grated parmegianna cheese on top.
Put in the oven and bake for about 20 mins or until the mashed have a golden brown tint.
When done - remove from oven - and let stand for 5 mins. Serve on warmed plates. Gather the family -and enjoy your time together.
Buon Appetito.
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