Friday, October 6, 2017

Sorry For The Delay In Blogging -- Will Start Blogging Again Sometime Saturday

I've gotten a lot of linked articles sent to me by readers; I will eventually get to all of them.

I have received some great observations regarding the Bakken from some readers which I will also post.

Family commitments have really delayed my blogging.

I couldn't possibly be in a better mood but there is just so much to write about -- but eventually I will get to it.

Continuing To Make America Great -- Japanese Company To Invest $1 Billion In Tennessee; Create 1,000 Jobs -- October 6, 2017

Two different ways of thinking to create jobs for Americans.

Obama: taxpayer-funded incentives; job training (no pay, but job training)
Trump: private enterprise; public (state)-private partnerships; not job training but paying jobs

Exhibit A at Reuters, data points:
  • Japanese EV supplier, Denso Corp
  • Maryville, TN
  • $ 1 billion plant
  • create 1,000 jobs
The Energy And Market Page, T+258

WTI: continues to fall toward $49.

NYSE: down slightly. CNBC and Fox Business News continue to focus on the "points" up or down, how many points the market rises or falls. The Dow 30 is now so high (at 22,000+ ) the move measured in "points" means very little if the move is less than 250 points one way or the other, except psychologically. Today, is a great example. Hysteria over a 30-point drop. A 30-point decline on the Dow 30 today? Traders should have stayed home. The 30-point decline amounts to 0.13%. Zeropointonethree percent. On the other hand, a 1% drop would mean a 220+ point decline.

New highs on the Dow 30: 135, including the banks; BK (whoo-hoo); GM; Home Depot; D. R. Horton;
  • new lows: 18
  • I don't own BK directly but I bought shares in BK decades ago for one of the daughters; bought it and forgot it; reinvested dividends; current yield, 1.8%; would love to know the yield based on the original investment; I bought this back in 1990 time frame I suppose; don't recall exact date; max chart over at Yahoo!Finance only goes back to 2012 -- dividend then, 13 cents/share; dividend now, 24 cents/share. Price/share back in 2012, $22; share price now; $54. Without dividend investment, 96 cents/$22 = 4.4% but with all the shares bought through reinvestment .. whatever. I no longer follow her portfolio. I don't know if the still has these shares or not. I assume she does. 
COP: maintains dividend.

Fracking to begin in the UK in weeks. The Independent. Link here.  In Yorkshire, despite protests. "In weeks" gives faux environmentalists weeks to mobilize. I was stationed in Yorkshire for quite some time while in the USAF. Huge area of ultra-leftists who hated the US; hated nukes; hated spies. Loved the Russians; loved socialism; loved to protest, especially if the protests became militant. Glad to see they have something new to protest.

The Political Page, T+258

The Weinstein defense. Did everyone see how quickly and coordinate the defense of Weinstein developed. Literally overnight and before the morning news cycle began. This has "Hillary's War Room" written all over it. Starting last night and through the night, the "Hillary War Room" was calling every contact / donor in Hollywood to bring them on board to defend Weinstein. The three-hour time difference worked to Hillary's advantage.

The EV Page

Full EV chart for September, 2017, is now available. This page has much more than just the chart; highly recommend that you scroll down and read the entire page. These guys are doing a great job.

The chart:

Friday, October 6, 2017

GDP now: as of today, 2.5% estimated for 3Q17 --
Latest forecast: 2.5 percent — October 6, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 2.5 percent on October 6, down from 2.8 percent on October 5.
The forecasts of third-quarter real consumer spending growth and third-quarter real private fixed investment growth declined from 2.5 percent and 1.8 percent, respectively, to 2.2 percent and 0.9 percent, respectively, after this morning's employment report from the U.S. Bureau of Labor Statistics.
The model's estimate of the dynamic factor for September—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—fell from 1.53 to 0.18 after the report.
Active rigs:

Active Rigs593367191183

RBN Energy: crude oil shuttle pipelines in the Permian's Delaware and Midland basins, part 3.


So, was I correct yester-afternoon/evening when I wrote:
Jobs. The unemployment report for September, 2017, is to be released tomorrow. Never take President Trump literally, but always take him seriously. Perhaps he is talking in "generalities" in this tweet, but when he says unemployment is the "lowest it has been in decades" suggests he has seen the data that will be released tomorrow. So, we'll see.

Yeah, I think the president had the numbers last night.

Over and over all morning on CNBC: the job market lost 33,000 jobs vs an expectation of a gain of 95,000 jobs.

Only once was the unemployment rate mentioned in the headline story. The U3 unemployment rate dropped unexpectedly more than forecast.

"Everyone" was watching the number of jobs in light of the two epic hurricanes. Usually, "everyone" focuses on the unemployment rate. But not this time. "Everyone" focused on the numbers. Forecast: an increase of 95,000 jobs; actual: a decrease of 33,000 jobs.

Big deal. This is the real story. For decades it was a two-digit number: the unemployment rate.

Today. "they" focused on 95,000 and 33,000 -- two numbers tthat 99% of Americans won't understand.

What 99% of Americans will understand is that the unemployment rate unexpectedly droped from 4.4% to 4.2% That's the lowest rate since February, 2001.  Yes, since 2001. As Presdient Trump said last night, "unemployment the lowest in 16 years."

So, now we know (although, in fact, we "always knew") the president has the data the day before the number is released.

By the way, lots of talk about a jobs number that actually declined. This is rare but not unprecedented. It was also negative in September, 2010 (under the Obama administration) -- a fact not mentioned on CNBC. The two "large" hurricanes in September, 2010 (Igor, Julia) did not hit the US (Igor caused some large waves off the coast of the US and one person drowned off the coast of North Carolina). 

One other interesting data point. I pointed out that for the first time in history, CNBC is now paying attention to U6, now that Trump is in office -- this is a "higher" unemployment number than the reported U3 and during the Obama administration no one wanted to touch U6 on the morning talk shows. U6 is 8%+ compared to the 4.2% U3. With the Trump administration, we will see U6 being talked about more often.

Interestingly, the data took a bit of wind out of their sales. U6 actually improved. I have to look it up but I think it decreased from 8.3% to 8.1%. U6 was mentioned in passing on CNBC but it decreased, like U3, and they didn't spend much time on that.

Other good news:
  • labor participation rate increased; per Drudge headline, "Americans pouring back into workforce"
  • record number employed

But this is the graph that tells the story:

Disney World, motels, and cruise ships are already back in business.

"Pay attention to this." What's that all about? We discussed that yesterday at this long, meandering post in which we discussed the reason for the strength and duration of the bull market. 

Finally, at 10:05 a.m. eastern time, CNBC admits that experts see "good news" in this report.

Wholesale trade: link here --
  • sales +1.7% to $473.4B.  -- wholesale sales forecast to be 0.0% (CNBC's Santelli); 1.7% is a huge number -- and even bigger when forecast was for 0% and in light of two major hurricanes
  • inventory to Sales ratio rises to 1.28.