S&P 500 FINANCIALS INDEX was not too badly affected by the jobs report.
| Value 123.80 | Change -1.85 | % Change -1.5% |
MLPs & REITs pulled back along with the markets. Even oil dropped almost $1. Below the Alerian MLP Index chart, I added 2 charts for Enbridge (EEQ) & Kinder Morgan (KMR) over the last 6 months which has been a dreadful period. These are the stock equivalents of MLP units, backed by one unit of each company respectively. However, they are stocks, paying stock divs, equivalent to the payment made to unit holders. For personal accounts, with no money div payments, there are no 1099's & are accepted in retirement accounts. Both stocks are trying to break out from trading zones they've become accustomed to in recent months.
Alerian MLP Index --- YTD
Enbridge Energy Mgmt - 6 months
Kinder Morgan Mgmt - 6 months
The unemployment rate shot up to 8.5% last month, the highest rate in 25 years. 667K workers were laid off & there is no indication that the deterioration of jobs will end soon. When the discouraged & part time workers are included, the rate rises to 15.6%. Expectations are for more gloomy numbers in April, monthly job losses are probable for the rest of 2009. Meanwhile the average work week dropped to 33.2 hours, another new low. This economy is hurting badly.
•Unemployment in U.S. Reaches 25-Year High of 8.5%; Payrolls Cut by 663,000
The service sector shrank in Mar, for the 6th straight month, to 40.8 from 41.6 in Feb (a faster pace than forecasted). The service industry accounts for 90% of the US economy & readings below 50 indicate contraction. In addition, 2 major industrial companies (GM & Chrysler) are on death's door & unemployment is soaring. No wonder consumer confidence is hovering near record lows.
•Service Industries in U.S. Shrink at Faster Pace as Joblessness Increases
Major US banks are getting ready to buy toxic assets, what the rest of the world calls bad loans. Now the congressional financial services committee will introduce legislation to protect tax payers from getting ripped off when these loans are sold. Nice idea, but it's still very scary when they are throwing around $1T like it was no big deal. This is the same Congress that already has an awful record of bungling mega buck legislation.
All considered following the enormous changes made at G-10 to the worldwide financial system, very ugly numbers on unemployment & service industries & greatly overbought markets, the pullback today is mild. I would have expected much worse. Maybe sellers will become more assertive in the PM. Banks in particular, which should be markets leaders, are taking the negative news very well.
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