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Friday, February 2, 2024

That Jobs Report -- February 2, 2024

Locator: 46728JOBS.

Later, 10:55 p.m. CT: link here.

From the linked article:

Forget Rorschach. Economic statistics, and the interpretation thereof, probably reveal more about your psyche than any inkblot ever could.

A good example is the latest employment report for January, released Friday morning.

The numbers were a blowout, with nonfarm payrolls expanding by 353,000, twice what economists had forecast, while average hourly earnings jumped by 0.6% in the month and 4.5% from a year ago.

Revisions to the two preceding months’ payrolls added another 126,000. Meanwhile, the separate survey of households showed that the unemployment rate held at 3.7%, extending the sub-4% jobless-rate streak going back to December 2021.

All of which confirms that, notwithstanding the popular perception that the economy is weak, the data say the opposite.

Lies, damned lies, and statistics, to cite the quote attributed to Mark Twain.

And throw in seasonal adjustments as further obfuscation, according to the critics who exhort those on their social-media feeds “to do your own research.”

Before seasonal adjustment, payrolls plunged by over 2.6 million in January, don’t you know! Actually, this happens every January, and last month’s unadjusted drop was the smallest since 2012, excepting 2021 and 2023, Jefferies economist Thomas Simons points out in a research note. And the latest seasonal-adjustment factor added fewer jobs than any January since 2014. If last year’s seasonal adjustment had been applied to the latest number, the headline nonfarm payrolls gain would have been 496,000, he added.

The biggest nit to pick in the January jobs report was the sharp decline in the workweek, of 0.2 hours, to 34.1 hours, the lowest outside of recessions. But as J.P. Morgan Chief U.S. Economist Michael Feroli explained in a client note, the shorter workweek appears linked to the jump in average hourly earnings. Bad weather apparently cut the number of hours worked, which meant salaried workers saw an arithmetic boost to hourly earnings.

“While today’s report contained more than the usual amount of noise, the overall picture looks to be one of a still quite strong labor market, and an economy starting 2024 with plenty of momentum,” he concluded.

On that score, the Federal Reserve Bank of Atlanta’s GDPNow estimate for first-quarter gross domestic product is running at a 4.2% annual pace.

Week 5: January 29, 2024 -- February 4, 2024

Locator: 46726TOPSTORIES.

Top, top story

  • US economy on fire; 
    • the US stock market continues to hit new highs;
    • huge job numbers for January; 
    • JPow takes cut off table any time soon; higher for longer
      • no one openly talking about a rate increase, but some are thinking

Top story

  • US air assets hit 85 targets in Iraq, Syria in retaliation for drone attack last week that left three Americans dead
    • regional air assets along with B-1s from continental US
    • initial strike analysis: meh; we've seen better.
  • regional "wars" everywhere: Gaza, Red Sea, Indian Ocean, Ukraine
    • all are in somewhat of a "steady state" situation
    • although Mideast heating up

Top international non-energy story:

  • GM's quarterly call tells us all we need to know about EVs

Top international energy story:

  • TMX (Trans Mountain Pipeline) still facing challenges
    • on line by March, 2024?
    • Canadian sale to indigenous groups stalled -- per Bloomberg
  • US leads universe in crude oil production
    • US: 13 million bopd
    • KSA: 9 million bopd
    • Russia: 9 million bopd

Top national non-energy story:

  • southern surge immigrants "voting" with their feet
  • fleeing Texas, Florida; headed for sanctuary cities
    • notably NYC, Chicago

Top national energy story:

  • WTI drops below $72

Focus on fracking: link here.

Top North Dakota non-energy story:

Top North Dakota energy story:


Geoff Simon's quick connects: link here.

Bakken economy:

Commentary

Random Example Of Halo Effect Near Recently Fracked Well -- February 2, 2024

Locator: 46725B.

Halo effect.

Well of interest:

  • 29808, 1,145, CLR, Bailey 7-24X, Pershing, t12/15; cum 390K 12/23:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20233114786144491664620595194281006
BAKKEN11-202312533898905
BAKKEN10-2023624328187105594279
BAKKEN9-2023301150114341956715218309
BAKKEN8-2023311252126999363255873308
BAKKEN7-20233119111893130687768073530
BAKKEN6-2023301623161487476737419122
BAKKEN5-202331152315289229081889155

Four New Permits; Two BR DUCs Reported As Completed -- February 2, 2024

Locator: 46724B.

WTI: $72.28.

Active rigs: 39.

Four new permits, #40498 - #40501, inclusive:

  • Operators: Oasis (3); Hess:
  • Fields: Camp (McKenzie); Robinson Lake (Mountrail)
  • Comments:
    • Oasis has permits for three Lee S wells, SWNW 8-152-101, 
      • to be sited 266 FWL and between 1999 FNL and 2098 FNL;
    • Hess has a permit for a EN-Weyraauch A-LW well, SESW 8-154-93, 
      • to be sited 339 FSL and 2063 FWL;

Two permits renewed:

  • CLR: a Thorvald permit and a Gale permit, both in Cedar Coulee, Dunn County;

Two producing wells (DUCs) reported as completed:

  • 36779, 60, BR, George 1B MBH, Pershing, npd,
  • 36780, 0, BR, George 1C TFH, Pershing, npd,

Wells of interest:

  • 29808, 1,145, CLR, Bailey 7-24X, Pershing, t12/15; cum 390K 12/23:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20233114786144491664620595194281006
BAKKEN11-202312533898905
BAKKEN10-2023624328187105594279
BAKKEN9-2023301150114341956715218309
BAKKEN8-2023311252126999363255873308
BAKKEN7-20233119111893130687768073530
BAKKEN6-2023301623161487476737419122
BAKKEN5-202331152315289229081889155

  • 17635, 740, BR, George 1-18H, Pershing, t3/09; cum 227K 12/23;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-202324389939364319000
BAKKEN11-202317604018968120
BAKKEN10-20230000000
BAKKEN9-202316104231834992926
BAKKEN8-2023315447411021460104329
BAKKEN7-2023316594571661769134437
BAKKEN6-2023307547272391890147341
BAKKEN5-20233187011352761998156446

By The Way, What Have TSM And ASML Been Doing? February 2, 2024

Locator: 46723TECH.

A reminder that BRK bought, then quickly sold TSM last year:
 



Snow, up 10% today:

Smartphones: Apple Overtakes Samsung For The First Time -- February 2, 2024

Locator: 46722APPLE.

By the way, Apple, Inc, increased its dividend by a penny.

Link here.

3:35 P.M. February 2, 2024 -- US Has Launched Strikes In The Mideast

Locator: 46721B.

Targets: in Iraq and Syria. 

In response to the "drone" attack that killed three US soldiers in Jordan (that's a Mideast country), to include two African-American males and one African-American female in late January, 2024.

Local time in the Mideast: midnight. 

********************************
February 2, 2024

Link here.

Meta Platforms META added $204.5 billion in market value Friday, the biggest one-day gain by any U.S. company in history. Meta stock skyrocketed 20.3% to a record $474.85 on Friday, after its financial results beat all expectations. The Facebook parent now has a market value of $1.211 trillion. Meta’s single-day gain in market value beat Amazon.com AMZN ’s record of $191.26 billion added in one day in February 2022.

We are in a brave new world. 

Good Stewards Of Government Capital -- February 2, 2024

Locator: 46720CHIPS.

Takeaway: if you like tech companies that depend on government subsidies -- we have one for you -- a Wall Street darling, Intel. 

This is just incredible -- how "honest" everyone is with regard to government subsidies. LOL.

Much could be said, but I don't want to get political. But I may say it later.

A "slow chip market." Poppycock. Did the headline writer read the story? It's nothing about a "slow chip market." Nvidia, AMD, Skyworks are surging. Mark Z has said he is stocking up on blades -- there's no "slowing chip market," except for perhaps the type of chips Intel is designing.

Link here.

Intel is delaying the construction timetable for its $20 billion chip-manufacturing project in Ohio amid market challenges and the slow rollout of U.S. government grant money to grow the domestic industry.

While Intel’s initial timeline had chip-making starting next year, construction on the project’s manufacturing facilities now isn’t expected to be finished until late 2026, according to people involved in the project.

Chip-making could begin after that, once Intel installs the complex and expensive machinery needed to make advanced semiconductors.

Managing large-scale projects especially in our industry often involves adapting to changing timelines,” an Intel spokesman said. “Our decisions are based on business conditions, market dynamics and being responsible stewards of capital.”

Intel shares fell about 2% to $42.55 in early trading Friday.

Two years ago, Intel had targeted production in 2025, although Keyvan Esfarjani, an Intel executive overseeing its manufacturing operations, said at the time that the scope and pace of the expansion would “depend heavily” on government funding.

The first two chip factories are part of a complex in which Intel has said it could invest up to $100 billion.

The spokesman declined to give a new target for chip production at the facilities, but said the company remained fully committed to the project. Significant progress has already been made at the site, with more than 1.6 million work hours completed and enough concrete poured to cover a football field with a more than five-yard-tall slab.

Major chip projects sometimes are delayed. Taiwan Semiconductor Manufacturing Co.recently said it was delaying production at a $40 billion chip plant complex in Arizona as negotiations over U.S. subsidies progress.

I could be wrong but it's not my impression that META, AMZN, and NVDA are relying on government subsidies to grow. In fact, as far as I can tell, these companies are hitting Congressional headwinds from many directions.

META was grilled by poilticos on Capitol Hill yesterday for inappropriate content; Amazon is seen as a monopoly; and the Biden administration is specifically singling out NVDA from selling its chips to China. 

As noted INTC is falling; META and AMZN are surging.

The Biggest Story Not Being Reported -- This Story Has Simply Disappeared -- Even Tesla Except For "Personality/Fluff" Stories -- February 2, 2024

Locator: 46718EVS. 

Overview Of Recent Posts

EVs 101: link here.

February 3, 2024: it's not getting any better or any easier.

November 23, 2023: game over?

 March 1, 2023: NIO -- margins are atrocious and losses are doubling

February 28, 2023: Rivian losses severe.

August 3, 2022: going from bad to worse: Lucid

July 22, 2022: great commentary in The WSJ

April 6, 2022: Rivian running about 2,000 trucks per quarter.

 Recently

EVs have definitely been pushed back a few years; the question is will they ever recover, and if they do, how long will it take? 

Link here.

Link here

Link here


From the linked article:

It’s not you, it’s the interest rates. The reasons are probably more nuanced than that, but a number of prominent car tech companies are finding themselves in the unenviable position of being dumped by the bigger companies that they’ve relied on for funding. It’s especially harsh when you consider we’re a few weeks away from Valentine’s Day. It started earlier this week, when auto parts giant Aptiv said it was pulling funding from Motional, the robotaxi joint venture it started with Hyundai in 2020. The reason? Money, of course. And how long it was taking to commercialize the technology. 

The next dumpee was Polestar, the Swedish electric performance brand, which found itself getting the “we’re growing apart” speech from Volvo. Volvo said it was handing over funding responsibility for Polestar to its Chinese parent company Geely — which is the equivalent of telling your ex you still want to be friends. 

But as interest rates remain stubbornly high and macroeconomic weirdness makes it difficult to make any solid predictions about the future, more splits could be on the horizon. The lonely hearts club may find some new members

Poppycock! This has nothing to do with interest rates. Americans don't want EVs -- this has nothing to do with interest rates. You can't blame JPow for this one.

EVs: link here

The EV story has completely disappeared.

At best, the story has pivoted to the "fake EV," the hybrid.

But the big story: back to the future -- back to the ICE. 

Investors are tired of legacy auto manufacturers throwing money away on EV development. 

The most recent example -- which completely blows m away -- I vividly remember the day Volvo said they would be 100% EV by 2030 (or whatever year it was). Now, adios

How much do investors hate EVs? How much money can legacy auto makes earn if they ditch EV development?

This provides a hint:

More, at The WSJ:


Flashback to all the excitement
, April 4, 2022:

Nvidia: Just Hit $1.6 Trillion Market Cap -- February 2, 2024

Locator: 46717TECH.

Tickers: NVDA, AMD, and Wall Street darling, and the most fascinating, CSCO:




Who's Drilling The Best Horizontal Wells -- February 2, 2024

Locator: 46716B.

Link here

Be sure to note the number one question asked by those who responded to this article.

LOL. 

I pointed this out years ago. 

If you want to know, reply to this post. 

Those in the "Bakken" plays, in order of "success":

  • Kraken Oill & Gas
  • Enerplus
  • Neptune Energy
  • Grayson Mill
  • Hess
  • Chord Energy

With the incredible wells MRO is reporting in the Bakken I was surprised MRO was not higher up the list. This suggests to me that MRO's play in the Bakken is much less than MRO's play in the Bakken and that the MRO wells in the Permian are not all that great compared to what MRO is doing in the Bakken.

Holy Mackerel -- What Happens When "Everyone's" Working? Hourly Wages Increase? February 2, 2024

Locator: 46715JOBS.

What happens when "everyone" is working? What happens when hourly wages increase? 

The talk on CNBC is incredible: "brave new world."

Oh, back to the question(s) above.

Answer? Hint? Folks spend more money.

Consumer spending accounts for 2/3rds of the GDP.  

So, what does all that get us? 

Well, let's look. Link here.

Who alerted me to that? The smartest interviewer -- perhaps the smartest overall analyst on CNBC: Sara Eisen. 

Sara: who ever saw this coming -- inflation coming down; jobs way over the estimates; and now, GDP estimates over 4%.

And not just "barely" 4% but four-point-two percent

I go back to this. Goldilocks economy.

How many hundreds of thousands of new jobs = a 25-basis point cut? For earnings, not market action.

  • Wow, talking heads are nuts. Meme investing.
  • let's opine:
    • 100,000 new jobs = a 25-basis point cut for earnings
    • 3.5 x 25 = 87.5 basis points

How much of a drop in oil price = a 25-basis point cut? For earnings, not market action.

  • let's opine:
    • every $2.5 drop in WTI = 25-basis point
    • $80 - $7.5 = $72.5-WTI =  another 75-basis point

Jobs -- February 2, 2023

Locator: 46715JOBS.

Updates

Later, 10:55 p.m. CT: link here.

From the linked article:

Forget Rorschach. Economic statistics, and the interpretation thereof, probably reveal more about your psyche than any inkblot ever could.

A good example is the latest employment report for January, released Friday morning.

The numbers were a blowout, with nonfarm payrolls expanding by 353,000, twice what economists had forecast, while average hourly earnings jumped by 0.6% in the month and 4.5% from a year ago.

Revisions to the two preceding months’ payrolls added another 126,000. Meanwhile, the separate survey of households showed that the unemployment rate held at 3.7%, extending the sub-4% jobless-rate streak going back to December 2021.

All of which confirms that, notwithstanding the popular perception that the economy is weak, the data say the opposite.

Lies, damned lies, and statistics, to cite the quote attributed to Mark Twain.

And throw in seasonal adjustments as further obfuscation, according to the critics who exhort those on their social-media feeds “to do your own research.”

Before seasonal adjustment, payrolls plunged by over 2.6 million in January, don’t you know! Actually, this happens every January, and last month’s unadjusted drop was the smallest since 2012, excepting 2021 and 2023, Jefferies economist Thomas Simons points out in a research note. And the latest seasonal-adjustment factor added fewer jobs than any January since 2014. If last year’s seasonal adjustment had been applied to the latest number, the headline nonfarm payrolls gain would have been 496,000, he added.

The biggest nit to pick in the January jobs report was the sharp decline in the workweek, of 0.2 hours, to 34.1 hours, the lowest outside of recessions. But as J.P. Morgan Chief U.S. Economist Michael Feroli explained in a client note, the shorter workweek appears linked to the jump in average hourly earnings. Bad weather apparently cut the number of hours worked, which meant salaried workers saw an arithmetic boost to hourly earnings.

“While today’s report contained more than the usual amount of noise, the overall picture looks to be one of a still quite strong labor market, and an economy starting 2024 with plenty of momentum,” he concluded.

On that score, the Federal Reserve Bank of Atlanta’s GDPNow estimate for first-quarter gross domestic product is running at a 4.2% annual pace.

Original Post 

USUAL DISCLAIMERS APPLY. THIS WAS DONE QUICKLY, ON THE FLY. THERE WILL BY CONTENT AND TYPOGRAPHICAL ERRORS. DATA DYNAMIC. 

Link here.

  • biggest since January 2023; and, you know, this -- January 2023 -- was coming out of the pandemic
  • 353K vs 185 K; 100,000 over the top estimate; 
    • prior: 216,000
    • even the craziest estimate was out to 283,000
  • can't wait to hear Steve Liesman
  • unemployment rate: 3.7% -- better than expected
  • average hourly earnings: huge jump up six-tenths of a percent vs three-tenths estimate
  • average hourly earnings: doubled the estimate
  • y/y popping: 4.5%
  • looks like the Fed saw this coming
  • U-6 from 7.6 to 7.2
  • labor participation rate: 62.5%
  • interest rates popping
  • strength, surprises

Unemployment: Table A-15:   

Steve:

  • massive revision to December, an increase
  • likewise an upward revision in November
  • seasonal adjustment -- 
  • JPow knew this was coming
  • overall comments -- really said nothing -- report confusing

Jim Cramer et al:

  • jobs: far higher than expected
  • absolutely excited about Apple
    • Cramer: only one with an exclusive with Tim Cook on the morning the AVP was introduced 
  • the AVP has 5,000 patents on parts and product
  • META: superlatives don't quit
    • Mark Z: re-organized an entire company in three months
    • dividend and buyback
  • AMZN
  • game-changer for retail shopping; first-time ever
  • cut out 25 cents per package; that was the operating leverage

Others:

  • the numbers were revised in November and December and those weren't seasonal
  • weekly hours down
  • dollars / hour up; hour / week down: a wash
  • Biden continues to create more jobs than any previous president
  • household: - 31 
  • now, backtracking: not due to seasonals
  • "March cut" off the table
  • "June cut" likely off the table
  • Goldilocks economy
  • consumer spending way better than expected: look at Amazon yesterday
  • the economy is going to do very well this year
  • "everyone is working"; "everyone" is making money; wage growth continues

Former New Orleans mayor: Marc Morial

  • this report beat every economist's expectation
  • no one expected this
  • couldn't come up with enough superlatives: "a powerful economy"
  • the Achilles heel? Housing.

Inflation?

  • this is the meme: continued wage growth --> inflation
  • 500 farm hands to weed, feed, and harvest a 160-acre spread
    • every dollar-an-hour increase in wages = $500/hour increase in owner's expenses
    • farmer-owner buys one tractor and attachments:
    • fires 500 farm hands
    • buys neighbor's 160-acre spread
  • today's world: Amazon laying off hundreds (thousands?) of $300K/year corporate desk dwellers and engineers
  • another example: META (numbers below need to be fact-checked)
    • one year ago, 88,000 employees
    • one year later, today, 68,000 employees
    • profit triples
    • profit per employee triples 

Market response: by noon the jobs report will be all but forgotten.

  • Dow plummets. 
  • NASDAQ holds, but dropped a bit.

Wow, wow, wow -- when I see the market's response, all I can do is shake my head -- folks think this is the Holy Grail:

How many hundreds of thousands of new jobs = a 25-basis point cut? For earnings, not market action.

  • Wow, talking heads are nuts. Meme investing.
  • let's opine:
    • 100,000 new jobs = a 25-basis point cut for earnings
    • 3.5 x 25 = 87.5 basis points

How much of a drop in oil price = a 25-basis point cut? For earnings, not market action.

  • let's opine:
    • every $2.5 drop in WTI = 25-basis point
    • $80 - $7.5 = $72.5-WTI = another 75-basis point

Marketing: look at all the product placement.

  • some tech company advertising on CNBC features Gerber baby food but the most prominent product featured: the Apple laptop! 

Busy, Busy Day -- But No Wells Coming Off Confidential List -- February 2, 2024

Locator: 46714B. 

Conundrum: we keep notching new highs in the equity markets and money on the sidelines (MMF) keeps increasing. Where is all that money coming from?

Conundrum: the Apple Vision Pro is too expensive at $3,500 which does not include all the add-ons. Folks are lined up around the block -- lines like we haven't seen since the introduction of the iPhone -- to be fitted for the new AVP -- and these are not impulse buyers or the "just browsing" crowd. They've already purchased their AVP -- now, simply getting ready to be fitted.

Conundrum: tensions keep rising in the Mideast; price of oil keeps falling. And the market is not forecasting a recession. When META -- with its huge debt, huge expenses -- introduces a dividend for the first time in its history, Mark Z isn't forecasting a recession. Testifying before Congress yesterday? Who cares. META just announced a dividend. META soars.

Conundrum; with EVs taking over the world, oil demand continues to increase.

Conundrum

Observation: "Fed Rate" talk on CNBC is "Dak Prescott/Jerry Jone / Dallas Cowboys" talk on First Take: excessive and irrelevant.

*******************************
Back to the Bakken

WTI: $72.43. Ouch.

Monday, February 5, 2024: 5 for the month; 64 for the quarter, 64 for the year
40046, conf, Resonance Exploration, Resonance Stratton 16-12H Inj
30594, conf, EOG, Liberty LR 29-2320H,
30593, conf, EOG, Liberty LR 29-2320H,

Sunday, February 4, 2024: 2 for the month; 61 for the quarter, 61 for the year
39154, conf, Hess, RS-F Armour-156-92-1224H-4, ,

Saturday, February 3, 2024: 1 for the month; 60 for the quarter, 60 for the year
None.

Friday, February 2, 2024: 1 for the month; 60 for the quarter, 60 for the year
None.

RBN Energy: Biden administration using billions to kick domestic battery production into high gear.

If the U.S. is to significantly grow its production of electric vehicles (EVs), it’s going to need a robust domestic supply chain that includes critical metals and minerals. The Biden administration has previously provided billions in funding made available through the Infrastructure Investment and Jobs Act (IIJA, also known as the Bipartisan Infrastructure Law) to help establish new clean-energy industries, an approach it is repeating with EV battery manufacturing and its goal of having EVs account for half of all new-car sales by 2030. In today’s RBN blog, we look at the $3.5 billion set aside to fund investments in the EV battery supply chain and increase domestic manufacturing.