Friday, April 7, 2017

US Manufacturing Jobs HIt 8-Year Record -- What The Heck Was Obama Doing For Eight Years? -- April 7, 2017

The jobs report for March, 2017, was atrocious. But if this story is accurate, it's quite a story, and again raises the question: what in the world was Obama doing for eight years? The story: US manufacturing jobs reach highest level in 8 years.
The United States added 11,000 jobs in manufacturing in March reaching a total of 12,392,000 people employed in the manufacturing sector, according to data released today by the Bureau of Labor Statistics.
That is the greatest number of people employed in manufacturing in the United States since January 2009—the month that President Barack Obama was inaugurated—when there were 12,561,000 people employed in manufacturing. In February 2009, manufacturing employment dropped to 12,380,000—a number it did not exceed until February of this year, when it reached 12,381,000.

The Political Page, Part 2, T+76 -- April 7, 2017

White House shuffle? Trump eyes new chief of staff; House leader on short list -- Axios. Broad shakeup of White House, rumors:
  • replace Chief of Staff Reince Priebus
  • departure of chief strategist Steve Bannon ("nonsense" -- Bannon)
  • short list of those being considered for chief of staff:
    • House Majority Leader Kevin McCarthy (R-CA)
    • Gary Cohn, former #2 at Goldman Sachs; has built considerable clout; rumored to be behind departure of Bannon; among the "Democrats" in the West Wing
    • others from private sector but GOP insiders
"This is what a commander-in-chief looks like." -- Ryan Zinke, Secretary of the Interior, from Montana; good for him. His wiki pic (I doubt he got to pick his pic):

Zinke was the first Navy SEAL to be elected to the U.S. House of Representatives.

Military Action "Moves" Oil -- Slightly -- T+76, April 7, 2017

  • Brent: 55.24
  • WTI: 52.15
  • Spread: about $3.00
Active rigs:

Active Rigs493193194187

RBN Energy: how new Permian-to-Corpus gas pipelines will affect coastal flows.
Where might all that gas go? As we’ve said in many blogs, the Marcellus/Utica region has made the Northeast essentially self-sufficient when it comes to gas, and has been pushing other producers out of the Midwest, the Southeast and other areas. So in many ways it comes down to exports, and Agua Dulce is key, not only for pipeline exports to Mexico but for gas supplied to the LNG export terminals in Corpus Christi and, perhaps, to other planned LNG terminals up and down the coast from Corpus.
So it seems quite probable that at least two—and maybe all three—of the Permian-to-Corpus pipeline projects we’ve been discussing will advance to construction. The question then will be – how much of the  gas flowing on those pipes to Agua Dulce be exported, and how much will need to work its way up the Texas coast and battle Marcellus/Utica producers for Texas Gulf Coast Industrial Corridor customers? Now that’s an interesting question that we’ll consider in an upcoming blog.
Scott Adams: the Syrian gas attack persuasion.

Number Of Employed Americans Sets Record For Second Consecutive Month -- The Market And Energy Page, T+76 -- April 7, 2017


April 8, 2017: something tells me the "bad, bad report" yesterday was somewhat of an anomaly: too many other data points do NOT validate the "jobs created" number. For example:
The number of employed Americans increased 472,000 to 153,000,000 in March, setting a second straight monthly record; and the number of unemployed persons dropped by 326,000 to 7.2 million.
That brought the nation’s unemployment rate down two-tenths of a point to 4.5 percent.
Later, 7:30 a.m.: unemployment rate ticks down to 4.5%; lowest since May, 2007; from Fox Business News --
  • bad, bad report
  • jobs created: 98,000: look at the "magic numbers": 150,000 "new" jobs needed to avoid economic stagnation; not a good report for Trump by any means; will be interesting how he tweets to Congress to get moving
  • unemployment rate drops because participation rate drops
  • huge miss; forecast for 185,000
  • labor participation, bad news, flat: 63%
  • disappointing report; jobs created a huge miss; probably in construction jobs due to weather (talked about at length prior to announcement) but overall, analysts really missed this one
  • not surprising: retail jobs going away 
  • question: will market see the unemployment rate, the lack of jobs creation, or the participation rate? Generally the market pays attention to the top line number -- the unemployment rate of 4.5% -- so what are futures doing immediately after the announcement: wow, futures plunged from flat/slightly up, now plummeting, dropping 58 points; WTI dropping back a bit; now back to $52
  • wages: really, really bad; no wage inflation; wages up 2.7% year-over-year
  • U6: coming in under 9% -- someone consider this the real unemployment rate; coming in under 9% is a very, very good sign 
  • employer-mandate on ObamaCare still in force: business owners not getting positive vibes from Congress; won't create jobs if healthcare costs remain high; too offset this uncertainty: robots, self-ordering kiosks; 
  • small business (where most jobs are created): a) ObamaCare is still a huge drag; b) Border Adjustment Tax a huge concern for small business; and, c) no Congressional movement on tax relief
  • if Congress doesn't get this turned around, and soon, a lot of incumbents may find themselves out of work in late 2018
Original Post

Dow futures: flat, after being as much as 140 points down immediately after US military action against Syria.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, relationship, or travel plans based on what you read here or think you may have read here.

Enterprise Products hikes quarterly distribution:
The partnership will now pay a quarterly cash distribution of 41.5 cents per unit or $1.66 per unit on an annualized basis. This is 1.2% higher than the previous distribution of 41 cents and 5.1% above the prior-year quarter distribution of 39.5 cents. 
The increased distribution is expected to be paid on May 8, 2017, to unitholders on record as of Apr 28, 2017. Based on closing price of $27.50 per unit on Apr 5, 2017, the stock has a dividend yield of 6%.
Jobs: WSJ forecasts a gain of 175,000 jobs; others, forecast 185,000 jobs; unemployment rate forecast to remain unchanged.

Ralph Lauren to close NY city flagship store and largest retail store (711 5th Avenue). 

The Political Page, T+76 -- April 7, 2017

Jobs report for March: incredibly bad. Bad. Bad. Bad. Trump made same mistake Obama did. Trump started with "Repeal and Replace" instead of tax reform.

Original Post

If Congress won't repeal it, the market will: Aetna to stop selling Iowans individual plans. Follows Blue Cross / Blue Shield's decision not to sell new individual health insurance plans in 2018.
A second major health-insurer has decided to quit selling individual policies in Iowa, raising fears that tens of thousands of Iowans will have no options for coverage next year.
Aetna informed Iowa regulators Thursday that it had decided to stop selling such policies, which cover people who lack access to employer-provided coverage or government plans. The move would affect 36,205 customers, the company told regulators.
Gorsuch vote "begins" 11:30 a.m. EDT.

Global support for Trump action against Syria: only dissenters -- Paul Rand, Syria, and Russia.

2013, chemical weapons used in Syria: where was Obama? That's the question folks in the Mideast are asking today. Maybe the era of "leading from behind" is over.

If it moves, tax it: California legislature goes along with governor's proposal -- increases gasoline excise tax at the pump; raises vehicle fees by $5.2 billion / year for road repairs (wink, wink) and rapid transit (i.e., the bullet train). Anyone who thinks this is about potholes and not the bullet train has not been following the news (money is fungible). Data points:
  • gasoline excise tax: up 12 cents/gallon; will bring it to 30 cents/gallon -- one of the highest in the nation -- but not the highest; wiggle room for another increase down the road
  • another "variable" tax: will be set at 17 cents
  • diesel fuel excise tax: up 20 cents/gallon plus sales tax on diesel will go up four percentage points
  • EVs: fees will go to $100 annually
  • other cars, annual fees:
    • valued under $5,000: $25
    • valued more than $60,000: $175
  • spending:
  • $34 billion of the first $52 billion raise will go to roads, bridges, highways, culverts
  • $7 billion over the first decade will go to mass transit projects
  • other money to fund trade corridors, including the roads serving the ports of Los Angeles and Long Beach
  • And then this: the Senate also proposed a measure for the June 2018 ballot that would prohibit borrowing the new money for non-transportation spending