Friday, July 5, 2019

More On The Jobs Report -- July 5, 2019


More: link here.

July 6, 2019: link here --

From the linked article:
Sectors with the most notable job gains in June included the professional and business services, health care and transportation and warehousing sectors. Manufacturing employment surged in June, with 17,000 positions created. Economists were predicting 3,000 jobs added in the sector. [Until I read this, I had been led to believe that manufacturing was dead in the US based on mainstream media reports.]
Having said that, the analysts found much, much, much about which to be concerned. And so it goes.

The narrative at the linked article did not seem to fit the data. Two observations:
  • it almost seems the article itself was written before the data came out; analysts anticipating a much worse report; 
  • it almost seems that the analysts couldn't believe this was happening; once the numbers came out, they seemed to be trying to reassure their clients that they were correct; that this was an anomaly, and "recession is right around the corner" if the Fed does not cut rates
Apparently investors were seeing something else. The market hit all-time highs this past week; the S&P 500 hit record highs three consecutive days this past week. Those folks that followed the Wall Street adage to "sell in May and go away (for the summer)" seemed to have missed a huge advance.

Disclaimer: this is not an investment site. I am inappropriately bullish on America and inappropriately bullish on the Bakken. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.
Later, 11:50 a.m. CT: after the jobs report came out today, here are the headlines (not linked):
  • Drudge Report: Stocks spooked.
  • DOW: down 58 points (or 0.2%; if you have a million-dollar portfolio, you are taking a bath to the tune of ... $2,000) 
  • Yahoo Finance! -- the Fed just got the green light to cut rates
  • The Street: Alphabet charts show potential breakout or "death cross" (okay, that will help)
  • Barron's: the stock market has been on a tear. History says it's time to get greedy 
  • Reuters: global markets; collapsing bond yields push world stocks to new highs (we've talked about this often)
  • Quartz: the inclusive language that sets the oil industry's lone female CEO apart from the rest
  • Quartz: Vicki Hollub is showing Big Oil how to survive climate change

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

I had not looked at the stock market for the past several months due to the volatility caused by the media anxiety over the US-China trade issue. But with the US equity market breaking all-time highs this past week, I decided to take a look. Wow! Pretty impressive.

Again, this is only for the archives; this is not an investment site and I am making no recommendations.

Investor Place, three oil stocks to buy, whatever oil prices do:
  • Plains GP Holdings 
  • Magellan Midstream Partners 
  • Enterprise Product Partners LP 
    • 52-week range: 23 - 30 
    • recent: 29 div: 6% 
    •  P/E: 14
Original Post
From CNBC earlier today:
The report “would seem to make a mockery of market expectations” for a quarter- or half-point cut at the July 30-31 meeting of the Federal Open Market Committee, said Andrew Hunter, senior U.S. economist at Capital Economics. The level of job growth, he added, “is still much stronger than the levels that have usually prompted the Fed to cut rates in the past and, although we do still expect the weakening economy to prompt the Fed to loosen policy, the first rate cut will probably be delayed until September.”
Market reaction shifted abruptly following the Bureau of Labor Statistics release. Traders moved the possibility of a 50-basis point cut to 8% from nearly 30% though 100% expectations for a quarter-point cut remained firmly in place.
See this post also.

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

Times Change

Nike could have put out several "flag" versions for its new "patriotic" tennis shoe and called it the "Obama Series." Huge marketing opportunity missed.

Record Heat Wave In Europe -- July 5, 2019

Link here.

I assume "everyone" is aware of the heat wave in Europe this summer. Apparently "intermittent, non-dispatchable" electricity can't keep the air conditioners running.

Look at this headline:

Oh, that's from 2015. Never mind.

Making America Great -- Another Record -- Staggering -- Jobs Report -- July 5, 2019


More: link here.

Later, 2:12 p.m. CT: even the Washington Post agrees! Love it --

Later today, I'm sure we will see another ZeroHedge story that tells us the "next recession is right around the corner."

Original Post 

Wow, I love to blog.

First thing I checked this morning, after the initial note for the blog: futures. US market futures were down a hundred points. Why?

Perhaps this. The Drudge Report banner today:

This dovetails nicely with the long rambling post I did yesterday at this link. All that talk about "the recession being just around the corner"? Just talk apparently.

Apparently "the speech" went quite well yesterday.

Let's dive into the jobs report for June, 2019.

From CNBC:
  • Nonfarm payrolls rose 224,000 in June, well above market expectations of 165,000
  • The unemployment rate hedged higher to 3.7% but was still near 50-year lows
  • Wage growth was 3.1% year over year, one-tenth of a point below market expectations 

Well, I don't know. The unemployment rate jumped! I suppose this will end up being the CNBC soundbite before it's all over. Whatever.

Payrolls rise well above market expectations and unemployment rate jumps; means only one thing.

And, no wage inflation.

From the linked article:
May’s initially reported growth of 75,000 had raised doubts about the durability of the record-setting expansion that began a decade ago.
The May count was revised lower to 72,000.Markets have been widely anticipating that the central bank will cut its benchmark interest rate later this month, regardless of what the June payrolls report showed. Stock market futures ticked lower after the report as investors contemplated what the report might mean for expectations that the central bank will be cutting interest rates later this month in an effort to stave off a widely expected economic slowdown through the year.
It looks like the rate cut(s) can wait.

Meanwhile, the polls. From elsewhere in the blog:
  • Harris: another big jump, to 14.7%; Americans are apparently ready for another Obama - this time a woman; something tells me the Hillary war room is in a panic; looks like it's about time for Harris to start moving to the center ("busing should be considered, but not mandatory")

I used to subscribe to The Atlantic. I thought it was a pretty good publication. But, wow, it has gone off the rails, its editor suffering from TDS also.

After fawning over Beto this past year, the Atlantic is looking fairly foolish. My hunch is that, as much as I liked Hunter S. Thompson, he, too, would have been a Beto supporter.

So, what's the market doing, now that I'm all caught up ... sort of. Apparently spooked by the incredible jobs report:
  • S&P 500: down 21 points
  • Dow: down 150 points
  • WTI: $57.46 -- and that's after the UK seizes an Iranian tanker in the Strait of Hormuz
By the way, the fact that the price of oil actually fell after the UK seized an Iranian tanker in the Strait of Hormuz tells me all I need to know about, well, a lot of things:
  • Trump
  • shale oil
  • OPEC 
By the way (again): has anyone yet suggested that fracking caused the earthquake in California yesterday? 

Gasoline Demand -- Holding Steady -- July 5, 2019

Link here.

No Wells Coming Off Confidential List Today -- July 5, 2019

This means war! This guy really wants war. UK seizes Iranian ship "off Gibralter." Iran threatens, in a tit-for-tat response, to seize a UK ship; and, the US says it is unlikely Iran will let any ship transit the strait if it can't ship its own oil. And what does WTI do on that news? Drops almost a dollar, not trading well under $57/bbl. This is not your father's OPEC.

Back to the Bakken

There are no wells coming off the confidential list yesterday or today.

Active rigs:

Active Rigs5964573176

RBN Energy: northeast gas takeaway capacity vs production in 2019, part 4.
Just two years ago, severe transportation constraints and steep price discounts were part and parcel of the Northeast natural gas market. Midstreamers were racing to add much-needed pipeline capacity out of the region, but not fast enough for producers. It was an inevitability that any pipeline expansions would instantaneously fill up. Gas production records were an almost monthly or weekly occurrence, and just as unrelenting were the takeaway constraints and pressure on the region’s supply prices.
Not so today. Northeast gas production in June posted a record high, with the monthly average exceeding 31 Bcf/d for the first time. Yet, June spot prices at Dominion South, Appalachia’s representative supply hub, were the strongest they’ve been in six years relative to national benchmark Henry Hub. Why? The spate of pipeline expansions and additions in the past two years have not only caught up to production but capacity now far outpaces it, and consequently, producers now have something they haven’t had in a long time — optionality. Today, we break down how much spare capacity is available and its effect on regional pricing.