We end November today with a trio of Fed yakkers–they will, almost without, doubt move markets.
Today we have Fed speakers Cook and Bowman as well as Chair Powell at 12:30 p.m. (central) so we will see some spikes and dips in markets during the day–long term it doesn’t matter. No one will be dovish – it is just a matter of how hawkish they will sound.
To me, personally, we have more important news today than Fed speakers. We have the ‘jolts’ report so we will see how many job openings we have out there. We also have the ADP employment report at 7:15 (central). Chicago PMI and pending home sales are also on tap. Then we have the beige book release which will give us a recap of regional information from the various Federal Reserve banks.
Once again the futures markets are very quiet at 6 a.m. – S&P500 up 1/5%. The 10 year treasury yield is at 3.72%–just right again.
Today my plan is to buy some community/regional bank preferreds as I noted here. Next I will be looking over the portfolios to see what I can can sell to generate some investable cash–some positions are overweight and with my low cash position I will be forced to sell something if I see a ‘bargain’ appear. On the other hand maybe I won’t have to sell anything–depending on the timing of a ‘bargain’ purchase since I will have 3 month treasuries maturing in December–we’ll see.
Well winter is back in Minnesota – I was hoping for more global warming, but with 6″ of fresh snow on the ground we may not see the grass for 4 months or so. Worse than the snow is the cold and the wind–will be around zero today with the wind chill and I will be out looking at a house mid afternoon–ugh!! Actually I have plenty of weapons against the cold–I mean I have lived in Minnesota since 1985 –plenty of super warm coats, hats, gloves and boots. Only 2-3 days ago I saw folks walking around in t-shirts and shorts–that is how it works in Minnesota–when it is 40 or 45 degrees and sunny folks think summer is here and dress accordingly.
ADC- Employment Increased by 127,000 Jobs in November; Annual Pay was Up 7.6%
JOLTS- https://www.bls.gov/news.release/jolts.nr0.htm
Gary–looking a little weak–wish the same would hold true on the ‘official’ report on Friday.
Employment numbers per Fox Business News this morning are much weaker than indicated. Commentator stated that only growth of numbers was in the low paying hospitality and restaurant sector with over 100,000 jobs added. However, losses of higher paying manufacturer jobs -over 100,000 lost jobs and higher paying business and professional jobs lost – did not give a number
of jobs lost. Many full time jobs have been lost in the last six months with major layoffs from top corporations. Many part time jobs created in the restaurant sector with low wages make the job report look more positive than what the job picture is reported with the gross numbers.
Bank of America this morning warned that Us economy will start to lose 175000 job per month starting in Q1 of 2023 and a much harder landing than a softer one. Preferred stocks hopefully will continue upward.
Cold and windy here in Seattle, too! From this morning’s WSJ 10-Point:
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Junk Bonds Rally as Investors Speculate Inflation Has Peaked
Some of debt’s 2022 losses are erased on potential for interest rates to top out without forcing defaults
Investors are driving a modest end-of-year rally in junk bonds, erasing some of 2022’s biting losses in a bet that the economic outlook for next year has stabilized.
Yields on below-investment-grade corporate bonds tracked by Intercontinental Exchange’s index have declined to 8.76% through Monday’s trading, down from a recent high of 9.61% on Oct. 13. Investors say they are growing more confident that interest rates might peak without putting many lower-rated companies’ ability to repay debt in serious jeopardy.
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(Article continues …)
https://www.wsj.com/articles/junk-bonds-rally-as-investors-speculate-inflation-has-peaked-11669782119?st=wp54twpsnfugorm&reflink=desktopwebshare_permalink
ESW3:
From the article:
“Wall Street analysts still expect corporate earnings among S&P 500 companies to grow 6% this year and another 6% next year, according to FactSet.”
I’ll take the “Under” on that 2023 forecast from these truly “dead-fish” Wall Street sell side analysts. There are only a handful of these folks that don’t act like crowd-following sheep and actually can think for themselves. Here is just a sampling of their forecasting ability:
One year ago today, the 26 Wall Street analysts tracked by Bloomberg collectively pegged Carvana’s 12-month per share value at $375, representing a 32% premium to its then current $284 price.
Carvana shares now fetch about $7.