The U.S. Economy Created 275,000 Jobs in February, Well Above the 200,000 Estimate…Unemployment ticked up from 3.7% to 3.9%.
What it means— Did we really create 275,000 jobs? Who knows? While reporting a great number for February, the Bureau of Labor Statistics also revised the stellar January number from 353,000 to 229,000. But revisions are about the past, so who cares? Unemployment is a little interesting, because it edged up even though the workforce participation rate remained the same. People are working a bit harder to find a job. Also, note that the unemployment rate is close to cracking 4%, which was one of the factors on Jay Powell’s wish list before lowering rates. Hourly earnings growth eased from 4.3% to 4.2%, which is the right direction if you are worried about wage-push inflation, but it’s still higher than inflation. We’re not sure what this mishmash of numbers means, but is seems that investors didn’t care, they bought anyway. That makes us nervous.
The S&P 500 Sets Another Record, Joins Dow Jones and Nasdaq… The main indices have reached record levels, even as the Fed signals that rates will remain higher for longer.
What it means— The Chinese are buying fewer iPhones, consumers around the world are cooling their demand for EVs, and the Fed keeps telling investors that rates will remain higher for longer, but that’s okay. Instead of relying on Apple and Tesla to fuel the current bull market, investors are happy to ride pharmaceutical and semiconductor firms to new heights. AI and fat-fighting compounds are the new things, and they have lots of customers. It might be less than 10 names pushing the indices higher, but they are still higher. Get nervous when the theme song from the Lego movie (“Everything is Awesome!”) plays in your head. This looks like a great time to take a few chips off of the table.
Japanese Yen Strengthened as Japan Showed Inflation and Wage Hikes… The yen plateaued at just over 150 per U.S. dollar but dropped under 149 on the news.
What it means— It’s a bit of a domino effect. With inflation finally making an appearance in Japan and workers getting more pay, the Bank of Japan (BoJ) can afford to raise interest rates for the first time in a decade. If that happens, then more investors will exchange their U.S. dollar and euro deposits for yen. This will push the yen higher relative to euros and dollars, although it looks weird, because yen are quoted in how many it takes to buy a buck. When the dollar falls, then stocks on our indices become cheaper, so our stock indices go higher. This isn’t the only thing driving our stock markets higher and likely is not one of the most important things, but it is another boost. If Japan takes the step to raise rates, it would be big news… at least for a day or two.
NFL Hopeful Questions the Existence of Space and Other Planets… Tyler Owens, a safety for Texas Tech, made reporters scratch their heads during the NFL Combine, where draft hopefuls show their athletic skills. Mr. Owens told reporters that he doesn’t believe in space and doesn’t think other planets exist. As for the shape of the earth, well, that’s debatable. Mr. Owens broke the record for the high jump and was expected to challenge the record for the 40-yard dash before he had to pull out of the competition due to a medical issue. The medical issue might ding his draft chances, but his lack of scientific knowledge probably won’t. However, it does bring up the question of his education. After all, the NFL requires at least one year of college, which means many teachers gave Mr. Owens passing grades for years. Should we wonder what he thinks of the lights in the sky at night?
Data supplied by HS Dent Research
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