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April 8, 2024
MORE JOBS REPORTED: According to the U.S. Bureau of Labor Statistics, the U.S. economy added a net 303,000 new jobs in March. The unemployment rate decreased from 3.9% to 3.8%. These two data points (number of new jobs and unemployment rate), have been diverging a bit in the recent past. The unemployment rate is determined by a household survey, and it has been showing net jobs decreasing from November through February. But according to that survey, the loss of jobs reversed in March. Average hourly earnings increased, but at the slowest pace since June of 2021. This "not too hot, not too cold" report caused a market rally when it was announced.
DESPITE LATE COMEBACK, STOCKS END THE WEEK NEGATIVE: Stocks ended a shortened week lower. The jobs report re-invigorated markets after earlier losses caused by rising commodity prices, geopolitical concerns, and Federal Reserve ambiguity. As we move into the second quarter of the year, investors will be watching first quarter, corporate earnings reports closely. Most expect to see a third consecutive quarter of earnings growth with profits rising at or near 3%. Earnings reports also include guidance on future expectations. This coming week, JP Morgan, Wells Fargo, BlackRock and State Street will report earnings.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
A WEAKESS IN THE LABOR MARKET: You are going to see every piece of "good" and "bad" economic data parsed as the presidential election draws closer. Last month's jobs reports were no different. The headline number was very positive, and investors liked it. What might the negative spin be? One problem with the labor market is that recent gains are being driven by part-time jobs. Since March of 2023, the number of full-time workers is down by over a million workers. Are Baby Boomers leaving full-time work for part-time jobs? Is inflation causing people to take on a second job? Are all the tech layoffs causing formerly full-time workers to take on part time work?
CANADA LABOR MARKET WEAKENS: Canada shed a net of 2,200 jobs in March and its unemployment rate moved up to 6.1%.
CREDIT CARD DEBT RISING: At the end of 2023, credit card debt per borrower was $6,360. That is 10% higher than a year earlier and an all-time high. It all added up to total credit card debt of $1.13 trillion. Credit card delinquency stayed under 2% for all of 2021 and much of 2022, but it hit 3.1% by the end of 2023, the highest delinquency rate since 2011. The average interest rate charged on credit card balances hit a new record high of 21.59% last quarter. Meanwhile, the average personal savings rate in the U.S. has plunged from over 5% to 3.6% in the past year.
HEAVY TRUCK SALES: Heavy truck sales remain in solid territory, but were down a bit last month and are down about 6.1% from a year ago.
OIL PRICES RISE: As geopolitical concerns rise, oil prices do the same. The Brent Crude price for a barrel of oil settled above $90 last week, and the U.S. West Texas price rose to $87 a barrel. Prices rose over 4% last week following Iran's public announcement that it will seek revenge against Israel for an attack that killed high-ranking Iranian military personnel. The attack occurred on Iran's embassy compound in Syria. Israel has not claimed credit. Meanwhile, Ukraine has been degrading Russia's oil refining capacity with drone attacks.
BROTHERS IN BERMUDA: I was raised in a family of four brothers, and one sister. One of my brothers passed away when he was 16, and so we are now three brothers and a sister. The three brothers, and our lovely wives, took a trip to the beautiful, scenic island of Bermuda this past week (our sister couldn't make it). It was a great trip...but it went by too quickly. Bermuda has some pretty cool caverns that were discovered over a century ago by two boys looking for their lost cricket ball. They never found the ball.
Have a great week!
Our mission is to help you see the objective, find the path, and navigate past the obstacles to a more prosperous future.
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President
Stonecrop Wealth Advisors, LLC
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"[C]almness can lay great offenses to rest." Ecclesiastes 10:4
SOURCES:
MORE JOBS REPORTED: https://www.bls.gov/news.release/empsit.nr0.htm AND https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-04-05-2024-9f83c0f5?mod=stocks_more_article_pos1
A WEAKESS IN THE LABOR MARKET: https://www.bls.gov/news.release/empsit.t08.htm AND https://www.zerohedge.com/markets/behind-todays-stellar-jobs-print-it-was-literally-all-part-time-jobs-and-illegals
DESPITE LATE COMEBACK, STOCKS END THE WEEK NEGATIVE: https://www.wsj.com/finance/stocks/earnings-season-stock-market-rally-test-2591b806?mod=stocks_news_article_pos2
CREDIT CARD DEBT RISING: https://www.forbes.com/advisor/credit-cards/credit-card-statistics/ AND https://www.zerohedge.com/markets/credit-card-debt-surges-new-all-time-high-just-card-apr-rates-hit-fresh-record
CANADA LABOR MARKET WEAKENS: https://www.wsj.com/economy/central-banking/canada-unemployment-rate-jumps-to-6-1-in-march-fd5c9b94?mod=economy_lead_pos4
HEAVY TRUCK SALES: https://www.calculatedriskblog.com/2024/04/heavy-truck-sales-decreased-in-march.html
OIL PRICES RISE: https://www.msn.com/en-gb/money/other/oil-prices-climb-more-than-1-per-barrel-on-supply-risk/ar-BB1l8RaA
(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved
*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.
*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.
*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.
Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.