Tag Archives: Wealth

Blue World Jobs Report Analysis – February 02, 2018

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Blue World Employment Situation Report Analysis

Release Date: Usually on the first Friday of the month

Release Site: www.bls.gov

Market Impact: Usually Very High

Management Value: Critical

Date: February 2, 2018

Brain Surgery is not Rocket Science to a Brain Surgeon©

 

 

 

The ugly, the bad, and the good sums up the employment picture for January 2018. The headline looks good, but there is some real stinky stuff under the surface so here we go…

November and December were revised down a net 24k. The Not in Labor Force total and, consequently, the Participation Rate are ridiculously stubborn, having added 153k and remaining at 62.7% respectively. Weekly pay for the Private Sector, Construction, and Manufacturing all receded, and the workweek got shorter in total and for Manufacturing and Construction. That all seems reasonably confirmatory of the Productivity and Costs report released Thursday that showed productivity down but unit labor costs up in Q4 2017, as hourly pay did increase. Sounds pretty bad, right? Not so fast!

The headline boasts 200k net new hires which easily beats the consensus averages and of those a whopping 196k were added in the Private Sector. The Labor Force grew by 500k, and the Total Employed was up 400k. That’s today’s graph and we can see the lines are moving the right direction and showing some convergence. That’s good. Other anecdotal data points out there suggest some of the stinky stuff above will experience some positive revisions over the next 3 months, and we will begin to see the impact of the tax reform trickling in next month.

All in all, we are in good keeping with last month’s report describing 2017 as “mixed.” It still is. But keep in mind what an improvement that is from where we’ve been in the not-too-distant past.

To answer the three most frequent questions we field of late, ride the stock market wave, but DO NOT pull down the safety nets. Stop orders, inverse ETFs, index Put options, alone or in combination, are all good hedge vehicles depending on the structure of the portfolio. Give us a call if you’d like more detailed thoughts. In small and mid-size firms, be leaning in the direction of growth vs. cash stockpiling for rainy days, but make sure you move on quantifiable demand as opposed to getting out over the skis on speculation alone. Bitcoin? No.

 

That’s it for this month. See you at the month’s end for the next Blue World Economic Index® report, which posted a record high for January and got off to a great start for February, and the next Jobs Report is scheduled for…wait for it…Friday, March 9th. Doesn’t that sound wonderful?!?

Thanks for reading, and please stay tuned…

Release Site: www.bls.gov

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release site should be cross referenced. The analysis represents the opinion of Blue World Asset Managers, LTD. who does not warrant or guarantee predictions based on its analysis.

 

©Blue World Asset Managers, LTD Friday, February 02, 2018

Blue World Economic Index® for January 2018

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Brief Explanation

Blue World Economic Index®

Scale: -2 to +2

Release Date:  Usually the Last or First Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

Management Value: Critical

Date: January 31, 2018

 

Analysis

What else can be said? The economy is on the move. The BWEI® made a material move to the North this month, and much of that was based on quarterly reviews of the twelve and twenty-four month trends which are more heavily weighted when calculating the index value. An upgrade of the ADP 1-year trend from -.5 to .5 was particularly impactful.  Within the Consumer Major Category, the TD Ameritrade IMX demanded trend upgrades as did Investor Confidence, while the Bloomberg Consumer Comfort Index set a monthly average record high.

We continue to feel the momentum is real but fragile and subject to political, economic, and policy risk, not the least of which is an apparent bias toward prophylactic rate increases in anticipation of inflation. The Hawks need to stand down for a while and let this thing develop. Uncertainty about the outcome of investigations is causing hesitancy as the world frets about whether the guy whose policies sparked the move will make it through a full term.

There was a great deal of anticipation regarding the Employment Cost Index report that came out Wednesday morning, but we don’t know why. This is a quarterly report which won’t take the effects of the post-tax reform wage increases into effect until Q2 of 2018. In spite of that, one can hallucinate a slightly positive trend developing already. Matt talked about the impact of tax reform on WBBM’s Noon Business Hour in Chicago on January 11th. You can follow the link, scroll down to the 11th and Matt starts at 2:20 into the podcast. 

The Numbers

The index advanced .06 to .18 (rounded) from .11. That ties the all-time record high set in September of 2014.

Employment, Inflation and Services remain painted in red ink where Employment showed material improvement, Inflation retreated fractionally, and Services were still stubbornly unchanged. Consumer, General Measures, Manufacturing, Retail, and Real Estate are positive where all padded their leads except Manufacturing and Retail, which showed fractional slips. The Manufacturing pullback was actually welcome as the Fed sub-group surveys came back down to solid yet sustainable levels of strength.

ADP was huge Wednesday morning. Let’s see if it translates to the BLS out this Friday the 2nd of February. The Blue World Jobs Report Analysis will be out before noon Friday. See you there and have a great month!

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites should be cross referenced.  The index assignments represent the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on the index.

©Blue World Asset Managers, LTD Wednesday, January 31, 2018

Blue World Jobs Report Analysis 12/08/2017

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Blue World Employment Situation Report Analysis

Release Date: Usually on the first Friday of the month

Release Site: www.bls.gov

Market Impact: Usually Very High

Management Value: Critical

Date 12/08/2017 

Brain Surgery is not Rocket Science to a Brain Surgeon©

It’s good. There was some positive movement in some key areas and some others were essentially flat, but no huge negatives were hiding in the weeds, and that’s a welcome circumstance.

Starting on the weaker side, Total Unemployed and Not in Labor Force grew a bit, and the Participation rate was flat to October at a below 63% reading. The Private Sector added fewer jobs than last month, BUT it was still over 200k, which is a perfect segue into the stronger side of the report. The Labor Force and Total Employed tallies grew, revisions to September and October were net positive, the work week made it to 34.5 hours for the third time this year, and the Diffusion Indexes for both the Total Private Sector and Manufacturing industries remained very high.

Rate hike? We continue to hope not. There is meat for the hawks and doves in this report. We are focused on wages which, with just about every other reading, do not signal inflation. We, of course, recognize the legitimacy of the hawks’ attention to overall employment, and we suspect that may carry the day.

We’ll see you back here at the beginning of 2018 with the Blue World Economic Index®. The final BLS jobs report for 2017 is scheduled for release on Friday, January 5th 2018. Have a very Merry Christmas and Happy New Year!!

Thanks for reading, and please stay tuned…

 

Release Site: www.bls.gov

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release site should be cross referenced. The analysis represents the opinion of Blue World Asset Managers, LTD. who does not warrant or guarantee predictions based on its analysis.

 

©Blue World Asset Managers, LTD Friday, December 08, 2017

Blue World Economic Index® Report for November 2017

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Brief Explanation

Blue World Economic Index®

Scale: -2 to +2

Release Date:  Usually the Last or First Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

Management Value: Critical

Date 11/30/2017

Analysis

The BWEI® extended the winning streak and pushed higher into positive territory closing November 2017 at .1. There is still some hurricane influence in there, as some reports are a full two months lagging, but that doesn’t diminish the strength we see, and where hurricanes were still a factor our discretionary values remained largely unchanged.

We know Consumers are still in a good mood even without benefit of the weekly Bloomberg Consumer Comfort report, which didn’t post the last two weeks. That won’t have a material impact on that category. Not surprisingly the Las Vegas Strip Revenues suffered in October, but are holding on to a slight gain for fiscal YTD. Retail slipped fractionally, but that was expected as the hurricane blips wash through. GDP caused an optimistic stir, posting better than 3%. We are as pleased as anyone to see it, but any time inventories make a material contribution we have to be cautious because it’s a while before we see if the build is paced/justified by sales. At this point, the majority of reports lean in the right direction.

Will there be a rate hike? We’re afraid so. This appears to be a Fed looking for any excuse to move rates. For example, they will likely focus on the PCE and Personal Income headlines in today’s Personal Income and Outlays report showing a move in PCE and a bump to income. The detail, however, shows the PCE move to be tiny, and the income increase coming from interest income, while wages and salaries were on the soft side. We just don’t see enough consistency across the six reports followed in the Inflation category to warrant such hawkish policy.

The Numbers

Of the eight major categories, five are positive, three negative, and no break-evens this month. In spite of the hoopla, Employment and Inflation remain stubbornly negative at -.23 and -.26 respectively, with Services flat to October at -.11 but showing some signs of life. Consumer, General Measures, Manufacturing, Real Estate, and Retail are all comfortably in the black with retail being the only one of the plus group to lose any ground, which was explained above. Manufacturing is beyond belief (almost literally), as that category composite sits at a pack-leading .49, where the Fed sub-group is at 1, and the non-fed group is up to .41 with improvements of .05 and .06 respectively from October readings. We hope to see additional corroboration in the Employment Situation report due out next Friday the 8th.

Is the market overheated? Yes. But that’s been true for five years. Our strategy is to have appropriate safety nets strung and keep riding the wave. If you’d like some thoughts on that, give us a shout. Other than that, see you next week for the Blue World Jobs Report Analysis!

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites should be cross referenced.  The index assignments represent the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on the index.

 

©Blue World Asset Managers, LTD Thursday, November 30, 2017

Blue World Jobs Report Analysis November 3 2017

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Blue World Employment Situation Report Analysis

Release Date: Usually on the first Friday of the month

Release Site: www.bls.gov

Market Impact: Usually Very High

Management Value: Critical

Date: Friday November 3, 2017 

Brain Surgery is not Rocket Science to a Brain Surgeon©

MIXED…and probably still by hurricanes. The headline looked great, but details just couldn’t hold up their end and in some cases make little sense, but the overall leaning of this report has to be positive due to some specific sector data.

At the top of the Establishment Survey we see 261k net new hires. The Private Sector contributed 252k to that total, and we enjoy net upward revisions of 90k to the last two months. The Total Unemployed retreated and the Diffusion Index readings for the Private Sector and Manufacturing are very strong at 59.6 and 62.2 respectively, where 50 is break even. So far, so good.

Now it gets weird. The Labor Force got smaller…by a lot. Total Employed fell, the Not in Labor Force tally spiked and went solidly back over 95M, and the Participation Rate plummeted .4 to tie its 2017 low of 62.7. All we can say is, “That ain’t normal.” We just don’t see single-month moves of that magnitude in the Participation Rate. Much of the volatility is in industries most impacted by the storms like Hospitality/Food Service, etc.

So, where do we pick up on the big positives? An economy with lateral movement demonstrates constantly conflicting economic data. An economy starting to reveal a direction, positive or negative, begins to establish consistency when the reports are analyzed as a body instead of taken one at a time and day-by-day. This is, of course, the whole point of the Blue World Economic Index®. What we see lately is some emerging agreement between reports in key industries.

Hard data lagged anecdotal survey optimism for many months, but now performance metrics from the Manufacturing sector, for example, are beginning to validate that optimism. This morning’s Employment and Factory Orders reports fell right in line by adding a material number of jobs while extending the work week and requiring more overtime hours. Headline and detail readings in the Factory Orders report posted impressive gains in key areas. We see similar dynamics in Services and Construction.

The picture is not yet clear, and there are substantial internal and external risks that can upset this apple cart, but we can perceive some focus creeping in when triangulating all these information sources. For more on that please review the Blue World Economic Index® report which posted yesterday.

The Fed? We feel “prophylactic” hikes in anticipation of inflation is dangerous policy this early in an actual recovery and there is no hint of it yet. We remain opposed to another rate hike this year but the headlines in this report may feed the hawks if they choose to ignore the current lack of evidence, including weak wage pressure in today’s release. Moving rates too fast is one of the internal risks we consider material.

The next Employment Situation Report is scheduled for release on Friday, December 8th and, of course, The BWEI® report will post earlier that same week. Until then, have a great November and a very happy Thanksgiving!

Thanks for reading, and please stay tuned…

Release Site: www.bls.gov

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release site should be cross referenced. The analysis represents the opinion of Blue World Asset Managers, LTD. who does not warrant or guarantee predictions based on its analysis.

 

©Blue World Asset Managers, LTD Friday, November 03, 2017