This economy is confusing–will tomorrow’s Jobs Report tell us how we’re doing?

This economy is confusing–will tomorrow’s Jobs Report tell us how we’re doing?

A day before the January jobs report that everyone on Wall Street is awaiting with bated breath two other reports painted a conflicting picture of how the U.S. economy is doing. And just in case you’ve forgotten the strength and speed of economic growth is what will determine when the Federal Reserve first cuts interest rates and how many cuts investors will see in 2024.

Special Report: Your 10 best moves for the rest of 2023–Part 1, 10 trends for the rest of 2023

Special Report: Your 10 best moves for the rest of 2023–Part 1, 10 trends for the rest of 2023

In this Special Report I’m going to start by sorting out the data that the market’s moves will likely depend on for the rest of 2023. That’s today’s post, Part 1 of this Special Report. Then I’ll try to handicap the likelihood that the data will zig or zag. And give you a sense of how far away from the current consensus the actual result might fall. And then finally, I’ll give you 10 moves for the rest of 2023 that are the most likely, in my opinion, to result in profits and that won’t wind up costing you big if the data winds up throwing investors a curve.

Just when it looks certain that the economy is headed toward recession, services post a big pickup in July

Just when it looks certain that the economy is headed toward recession, services post a big pickup in July

The Purchasing Managers Index (PMI) survey for non-manufacturing (AKA services) from the Institute for Supply Management showed a surprise pickup in July. The services index rebounded to 56.7 in July from 55.3 in June, the ISM reported on Wednesday, August 3. This put an end to a string of three straight monthly drops in the index. (In this index any reading above 50 indicates expansion. Below 50 indicates contraction.) Economists polled by Reuters had forecast a decrease in the non-manufacturing PMI to 53.5. This positive surprise comes after the Monday report from the ISM that the manufacturing sector showed a drop in July.

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…

On Friday, after the strong July jobs report, stocks said that the “re-opening” economy is going strong. That the Federal Reserve would see the July jobs report as a reason to raise interest rates. That inflation is likely to strengthen. On those conclusions the yield on the 10-year Treasury rose (7 basis points) to 1.30%. Bank stocks, which move up when interest rates do, climbed. “Re-opening” stocks such as Macy’s (M) gained with Macy’s shares up 6.24% on the day. Defensive stocks such as Chipotle (CMG), and PetMed Express (PETS) fell 0.68% and 0.82%, respectively. And tech stocks, the recent favorite sector when the economy looks shaky, fell with the NASDAQ 100 down 0.48%. What we’ll see next week if whether these convictions hold–and whether or not investors start to question Friday’s certainty.

With Fed meeting on tap for tomorrow, stocks slip on disappointing retail sales growth

With Fed meeting on tap for tomorrow, stocks slip on disappointing retail sales growth

Retail sales fell by 1.3% in May from April, the Commerce Department reported this morning. Economists surveyed by Bloomberg had projected a 0.8% month over month drop. The month to month drop in retail sales was the first drop in month to month sales since February. Retail sales still grew a very solid 23% year over year as the economy continued its recovery from the pandemic recession of 2020.

Will GDP data take over market sentiment Friday?

Will GDP data take over market sentiment Friday?

The Bureau of Economic Analysis releases the first take on economic growth in the first quarter of 2018 tomorrow at 8:30 a.m. New York time. So by the time the financial markets open in New York, investors and traders will have had a chance to absorb the report and decide how they feel about it.Economists surveyed by Briefing.com are looking for the growth rate to drop to 2.1% for the quarter. That would be down from 2.9% in the fourth quarter of 2017 and from 2.3% for all of 2017.

This is as good as it gets, says Goldman Sachs: Why that’s important to you in thinking about the next leg in this stock market

This is as good as it gets, says Goldman Sachs: Why that’s important to you in thinking about the next leg in this stock market

On Thursday February 22, Goldman Sachs said in a note to clients that the economic macro data as likely to be “as good as it gets.” This isn’t, in my opinion, a call for an immediate plunge in the markets. But with U.S. stocks trading near all time highs, I think the Goldman note is something all investors need to take seriously. Or at least the question it raises needs to be taken seriously. Here’s the question: If stocks are at all time highs and the economic data on economic growth, inflation, interest rates, etc. are as good as they’re going to get for this cycle, why should stocks move higher?

The challenges to rebalancing a portfolio in 2018–and some suggestions

2017 left investors with a huge challenge as we all move into 2018. After a 21.6% return on the Standard & Poor’s 500 stocks in 2017, do we let the money ride for 2018 or move it into other assets? Some stocks had almost unbelievable years in 2017. Amazon (AMZN) was up 56% for the year an Facebook (FB) climbed 53%. But those gains were left in the dust by the 96% gain on Alibaba (BABA) and the 115% racked up by Tencent Holdings (TCEHY). And even stocks seem to be standing still in comparison to biotech such as Madrigal Pharmaceuticals (MDGL), up 510% in 2017 or Sangamo Therapeutics (SGMO) ahead by 466%. For 2018 should you leave your money in those big winners from last year? Take some of it off the table and put it into laggards? Move some of it to cash?