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Job market looked solid in December–or did it?
The U.S. economy added 216,000 jobs in December, up from 173,000 the previous month. That was a bg surprise to Wall Street. Economists surveyed by Bloomberg had expected had added 175,000 jobs . The unemployment rate held steady at 3.7% for the month from November, according to the Bureau of Labor Statistics. Economists had expected the unemployment rate to tick higher to 3.8%. The the BLS revised previous reports of job gain donward for December and November. Looking solely at these headline numbers, you’d conclude that the labor market is running hotter than expected/hoped by investors and that this report lowered the odds that the Federal Reserve would begin cutting interest rates as early at its March 20 meeting. And that fears that the Fed would delay interest rate cuts would hurt stocks. That isn’t exactly what happened today
ASML shares hit (again) by export restrictions worries
You may have noticed that shares of chip equipment maker ASML Holding have been in retreat lately. The shares are down from a $757 close on December 29 to $700 today, January 4. That’s at 7.5% drop. So what’s up?
Progress of a sort: Wind sector troubles continue to unwind
I think this is good news, sort of, for the very troubled wind power sector.
Yesterday, January 3, Equinor (EQNR) and BP (BP) announced that they would terminate their contract and exit the 1.2 gigawatt Empire Wind 2 project off the coast of New York. Why is this good news?
Big tech NASDAQ 100 records four-day losing streak
Wall Street strategists began the year calling for a pull back in U.S. stocks after the huge year-end rally of 2023. So far that call is right on. NASDAQ 100 stocks fell 1.1% today Wednesday, January 3, to extend their losing streak to four sys, the longest in more than two moths. The Standard & Poor’s 50 ended the y down 0.80% and the Dow Jones Industrial Average closed down 076%. The NASDAQ Composite lost 1.18% on the day. The Russell 2000 small-cap index dropped 3.3%. The CBOE S&P 500 Volatility Index (VXI) gained 644% to a still very low “fear” rating of 14.05. But what’s the cause and what’s the effect?
BYD climbs over Tesla to become No. 1 in electric car deliveries in the fourth quarter
This change at the top of the electric car market was widely expected. The only debate was whether it take place in the last quarter of 2023 or early in 2024. Now, we know. With both Tesla (TSLA) and BYD (BYDDF) reporting fourth quarter delivery numbers in the last few days, the switch at No. 1 is now complete.
Special Report: 10 Great Growth Stocks that Are Getting Greater–today my 9th pick PANW
GREATER Growth Stock Pick #9: Palo Alto Networks (PANW). I’m not going to try to convince you that shares of cyber-security favorite Palo Alto Networks are a value stock. It trades at 166 times trialing 12-month earnings per share. And I’m not going to try to convince you that this is an undiscovered stock that’s going to sneak up on anyone. The shares was up 111% in 2023. (The stock has been a member of my long-term 50 Stocks Portfolio since July 17, 2019. In that time the position is up 296%.) But remember the point of this Special Report–I’m looking for great growth stocks, which aren’t cheap in this market by any means, with catalysts in the next year or two that will push growth higher. And here I think Palo Alto Systems rings the bell three times over.
Special Report: 10 Great Growth Stocks that Are Getting Greater–today my 8th pick BYD
GREATER Growth Stock Pick #8: BYD (BYDDF). I know; I know. What’s a Chinese stock doing on this list? It’s here because BYD, not Tesla (TSLA) is the big growth story in electric vehicles and not just for this month–but for years. And because I can see two catalysts that are about to power this stock higher. Morningstar calculates that BYD is 20% undervalued right now. Because this is a China stock we’ll need to take a deep look at valuation later in this post. But first, the growth story.
What to make of Cummins’ $2 billion penalty for Clean Air Act cheating
Here’s what an investor should watch after Cummins’ huge $2 billion Clean Air Act settlement.
Saturday Night Santa Claus says (on a Tuesday), For the week ahead expect…
Stocks continued on an upward path in a classic Santa Claus rally. Wall Street kicked off the final week of 2023 with gains in stocks, extending a rally that put the market on the brink of a record. Today, December 26, the Standard & Poor’s 500 traded about 0.5% away from its all-time high of 4,796.56. The so-called Santa Claus rally, which typically encompasses the last five trading sessions of the year and the first two of the new one, has a strong record of gains. Since 1969, the S&P 500 has averaged a gain of 1.3% over the seven-day period, according to the Stock Trader’s Almanac.
Don’t forget year-end tax loss harvesting–it could be extra valuable this year
You have until December 31–which effectively means Friday December 29 (although I wouldn’t push the deadline, personally) to sell your losers this year to off set any gains from winners you sold during the year. Given the way the year has unfolded, harvesting your tax losses to offset gains could be especially valuable this year.
Merry Christmas to all
I wish you all a Merry Christmas. Or a Happy Holiday of your choice. Hope Santa brings you everything you wished for. (And that you don’t get two more reindeer sweaters.) Looking forward to a more peaceful new year. One can always hope.
Is the good news priced in for Micron?
Right now memory chip maker Micro Technology (MU) is a microcosm of the stock market as a whole. There’s good news–pretty clearly–on the horizon. But the worry is that it’s already mostly priced into the stock. This week Micron, the largest U.S. maker of memory chips, gave a forecast for the fiscal second quarter that sure made it sound like the company, and the memory chip sector in general, was about to turn the corner after getting hammered on slumping demand for chips for personal computers and smartphones.
Bonds keep chugging higher, stock investors have doubts
Bond traders and investors kept the bond rally going today December 20. The yield on the 10-year Treasury dropped another 8 basis points to 3.85% today. The yield on the 2-year note fell 4 basis points to 4.40%. The drop in yields came as a result of gains in bond prices. On the other hand, the major stock indexes had a big down day. The Standard & Poor’s 500 fell 1.47% and the Dow Jones Industrial Average ended the day down 1.27%. The small-cap Russell 2000 dropped 1.86%. The NASDAQ Composite and the NASDAQ 100 soared 1.50% and 1.53%, respectively.. The differing results don’t reflect a divergence of views on interest rates–both bond and stock markets see the Federal Reserve cutting interest rates in 2024. The difference does, however, reflect differing views on valuation
U.S. oil production hits a record, destroying OPEC’s supply cut strategy
The world’s No. 2 oil producer, Saudi Arabia, wants to cut oil production to raise oil prices. And has even actually curtailed production to meet that goal. The world’s No 3 oil producer, Russia, wants (others mostly) to cut oil production to raise prices. And has even promised to cut its own production. (We’ll believe that when we see it.) But none of that matters because the world’s No. 1 oil producer, the United States, has put its foot to the accelerator and is producing at record volumes.
S&P 500 earnings on track to grow by just 0.6% in 2023
FactSet calculates that Wall Street analysts expect the S&P 500 to report earnings growth of 0.6% in calendar 2023. That’s way below the trailing 10-year average (annual) earnings growth rate of 8.4% for 2021 through 2022. So far on a quarterly basis, 2023 has shaped up this way: earnings declines of 1.7% and 4.1% for the S&P 500 in the first nd second quarters of 2023, respectively. And earnings growth of 4.9% for the third quarter. FactSet calculates that analysts expect the stocks in the index to report an earnings growth of 2.4% for Q4 2023.
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