Dow rose 132, advancers marginally ahead of decliners & NAZ added just 2 after yesterday's big rise. The MLP index was steady in the 248s & the REIT index added 3 to the 364s (appraching its record highs in 2016). Junk bond funds inched higher & Treasuries were sold, taking yields higher. Oil went up to the 54s & gold fell 3 to 1322.
AMJ (Alerian MLP Index tracking fund)
Stocks rise after blowout jobs report
White House economic advisor Larry Kudlow implied that Dem proposals to increase taxes on the wealthiest Americans could lead to economic troubles akin to those in Venezuela. “Taxing rich people – that’s an old saw from the left. It never works,” Kudlow said. “I don’t know how these elections and nominations and candidacies will play out. I mean, look at Venezuela – it’s an absolute catastrophe. They taxed rich people, they taxed everybody and they have equality of sorts – everybody’s poor.” Kudlow added that such attempts to remedy economic inequality with higher taxes on society’s wealthiest individuals “never works” & would be a “non-starter.” The longtime conservative commentator said that he'd rather see broader prosperity by other means, but that aggressive tax plans proposed by Dems would depress the nation's GDP. “The top 1 percent of Americans pay 37 percent of all the income taxes, OK? And the top 1 percent basically pays more than the lowest 90 percent, so who’s carrying the freight here?” Kudlow added. “The most successful are not only paying their fair share, they’re paying the most. By far.” A progressive tax system, like that used in the US, is one that imposes a lower tax rate on households & individuals that earn less money compared to those with a higher income. Such systems take a larger percentage of total revenues from high-income earners than it does from low-income individuals.
White House advisor Larry Kudlow says taxing rich people never works: ‘Look at Venezuela’
Fed’s James Bullard says he’s pleased with rates at these levels and it’s time to ‘wait and see’
The Jan jobs report was encouraging, making investors happy. They are buying stocks although NAZ & market breadth are not cheerful. The Dow is up almost 2K YTD but trade negotiations with China & a probable 2nd round of a gov shutdown, among other problems, are worrisome.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 54.34 | +0.55 | +1.0% |
| GC=F | Gold | 1,326.00 | +0.80 | +0.1% |
Stocks moved higher following the much better-than-expected monthly jobs report. US employers added 304K jobs in Jan, soaring past expectations for an increase of 165K jobs, after investors braced for mixed results as a result of the 35-day partial federal gov shutdown. In Asian markets on Fri, Chinese shares rose ahead of the week-long Lunar New Year holidays. China's Shanghai composite was up 1.3% on the day & ended 0.6% higher for the week. Hong Kong's Hang Seng index eased back slightly on the day & gained 1.3% for the week. Japan's Nikkei average ended up a smidgen on the session, but for the week was off slightly. In Europe, London's FTSE gained 0.6%, Germany's DAX was fractionally lower & France's CAC added 0.3%.
Stocks rise after blowout jobs report
US employers added 304K in Jan, soaring past expectations for an increase of 165K jobs seemingly brushing off the gov shutdown as investors braced for mixed results. The
unemployment rate climbed to 4% from 3.9%, while the
labor force participation rate rose slightly to 63.2%. Average
hourly earnings, meanwhile, rose by 3¢ to $27.56. Over the year,
average hourly earnings have increased by a total of 85¢ (about
3.2%). Jobs numbers follow a report released on Wed from ADP revealed the private sector added 213K jobs in Dec, beating expectations of 178K jobs. The forecast was for unemployment to hold
steady at 3.9%, one of the lowest numbers in nearly 50 years,
while forecasting the creation of 165K jobs. In Dec,
the US economy added a whopping 312K jobs, blowing past expectations. Analysts, at the time, had cast that number as
unsustainable. Initially,
the White House was bracing for a potentially negative jobs number in
Jan when the Dep of Labor releases the payroll data. However,
labor officials said last week they would count the
once-furloughed workers as employed because they’re getting paid
retroactively once the gov is up and running again.
American employers created a stunning 304,000 jobs last month, far beyond expectations
White House economic advisor Larry Kudlow implied that Dem proposals to increase taxes on the wealthiest Americans could lead to economic troubles akin to those in Venezuela. “Taxing rich people – that’s an old saw from the left. It never works,” Kudlow said. “I don’t know how these elections and nominations and candidacies will play out. I mean, look at Venezuela – it’s an absolute catastrophe. They taxed rich people, they taxed everybody and they have equality of sorts – everybody’s poor.” Kudlow added that such attempts to remedy economic inequality with higher taxes on society’s wealthiest individuals “never works” & would be a “non-starter.” The longtime conservative commentator said that he'd rather see broader prosperity by other means, but that aggressive tax plans proposed by Dems would depress the nation's GDP. “The top 1 percent of Americans pay 37 percent of all the income taxes, OK? And the top 1 percent basically pays more than the lowest 90 percent, so who’s carrying the freight here?” Kudlow added. “The most successful are not only paying their fair share, they’re paying the most. By far.” A progressive tax system, like that used in the US, is one that imposes a lower tax rate on households & individuals that earn less money compared to those with a higher income. Such systems take a larger percentage of total revenues from high-income earners than it does from low-income individuals.
White House advisor Larry Kudlow says taxing rich people never works: ‘Look at Venezuela’
St Louis Federal Reserve Pres James Bullard said that interest rates are at a good level to “set us up for a good couple of years.” Bullard,
a voting member on the central bank's policymaking Federal Open Market
Committee this year, said he's pleased with the Fed's “patient” stance.
“The level of rates is very good where it is today,” he added. “I would like to think we’re out of the business of penciling in
further increases that have to be made. I don’t think we’re in that game
anymore,” said Bullard, who's been calling for the Fed to pause for a
while. “Now it’s time to wait and see how the economy develops.” The
Fed on Wed cemented its “patient” approach on rate hikes after
its post-meeting decision to hold rates steady at 2.25 -2.5%. Fed Chairman Jerome Powell started
to push that “patient” narrative in Jan after 4 rate hikes last
year. The latest increase was in Dec, when the Fed had projected 2 more hikes in 2019. Bullard's thoughts came after the gov reported much
stronger-than-expected Jan jobs gains, recognized the strength. But
he said, at this point in the cycle, “looking at low unemployment and
jobs growth is maybe a backward-looking signal.” “Obviously, we
will react to data as it comes in. If the economy performs better than
expect or worst than expected going forward, we’re willing to move in
either direction,” Bullard said. “But there wouldn’t be any presumption
now anymore that we’re going to move in one direction or the other.” That should please Pres Trump who has been a vocal critic of the Fed's policies under Powell, arguing
the central bank's path higher on rates could hurt the economy. As
recently as Dec, Trump discussed firing Powell because of
widespread losses in the stock market. The stock market plunged in Q4 after Powell in
Oct touched off concerns about an aggressive rate-hike policy. He
later walked back that notion. But uncertainty persisted, & the S&P 500 dipped in a bear market, down 20% or more from recent
highs on Christmas Eve, which marked the lowest close for the index in
2018. However, since then, the S&P 500 has bounced 15%. For last
month, the index gained nearly 8%, the best monthly performance
since Oct 2015.
Fed’s James Bullard says he’s pleased with rates at these levels and it’s time to ‘wait and see’
The Jan jobs report was encouraging, making investors happy. They are buying stocks although NAZ & market breadth are not cheerful. The Dow is up almost 2K YTD but trade negotiations with China & a probable 2nd round of a gov shutdown, among other problems, are worrisome.
Dow Jones Industrials
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