Dow jumped up 117 (off session highs), advancers over decliners about 2-1 & NAZ went up 7. The MLP index added 3+ to the 248s & the REIT index fell 3+ to the 365s. Junk bond funds hardly budged & Treasuries remained weak. Oil rose 1 to 54 & gold lost 4, taking it down to 1309.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Worker paychecks are showing their biggest gains since the recovery began a decade ago, & are more than keeping up with inflation. Labor Dept data shows that real average hourly earnings, which compare the nominal rise in wages with the cost of living, rose 1.7% in Jan on a year-over-year basis. A month ago, the increase was 1.3%. A year ago, the gain was just 0.7%. In all, the rise in inflation-adjusted hourly pay showed the best increase since Jul 2016. The trend comes amid a steadily rising level in gross average hourly earnings, which increased by 3.2% in Jan, right around the best levels of the recovery as well. "This is a welcome increase. It gives workers more purchasing power, but because the pickup has been in line with productivity growth and inflation, it has not added to inflationary pressures," Cleveland Fed Pres Loretta Mester said in a speech yesterday, before the real wage numbers were released. Indeed, skeptics about the strength of the gain say wages have barely kept up with inflation, & for a while that was true. The increase in real average hourly earnings was below 1% for 2 full years straight before Nov 2018's 1.1% gain. The Jan consumer price index showed muted overall inflation pressures, but indicated that real average hourly earnings increased by 0.2% for the month. Real average weekly earnings rose 0.1% for the period, representing a 1.9% annualized gain. For workers, that's meant a better standard of living. At a policy level, the good news likely won't trigger an immediate response from the Federal Reserve, though central bank officials likely are noticing the nascent wage pressures. Payroll gains have averaged a robust 241K over the past 3 months. Fed officials, though, have indicated they are going to take a pause in the rate-hiking cycle until they get a better feel for how economic conditions are unfolding.
Worker wage gains are keeping up with inflation, and then some
The federal gov ran a budget deficit of $14B in Dec, a drop of about $10B (42%) from the same month a year ago, the Treasury Dept reported. Release of the Dec data was delayed by the gov shutdown. Revenue for the month fell 4% overall as corp tax receipts were off by 18% & individual withheld & payroll taxes dropped by 1%. Customs duties, meanwhile, doubled to $6B in the month, reflecting rising tariffs on imported goods. Spending dropped 7% in Dec, as outlays fell for Medicare, veterans’ programs & military programs. But interest payments on the public debt climbed by 16% over last Dec. The Treasury said the Dec deficit would have been $45B if not for benefit payments & receipts being affected by calendar shifts. For the fiscal year thru Dec, the deficit is up 42% to $319B. The Congressional Budget Office projects a deficit of $897B for the full fiscal year (4.2% of GDP). The CBO sees T$ deficits beginning in fiscal 2022. The national debt, meanwhile, is rising rapidly, topping a record $22T this week, less than a year after it crossed the $21T mark.
Philadelphia Federal Reserve Pres Patrick Harker said his outlook for the economy suggests the central bank can continue to inch interest rates higher this year & next. “My own view is that one rate hike for 2019 and one for 2020 are appropriate,” Harker said in a speech. The Philadelphia Fed pres said he expects GDP to grow “a bit above” a 2% annual rate this year & then slow slightly to 2% into 2020. This year's Jan-Mar qtr will be very slow, with growth closer to 1.5% rate, & then growth will pick up in following qtrs, he added. Harker will be a voter on the Fed's interest-rate committee next year. Harker is watching inflation closely but, at the moment, said he was not troubled by what he was seeing. Core inflation “is not on an accelerated path; if anything, it’s edging slightly downward,” he said. “With a temperate climate for inflation, continued strength in the labor market, very slight downside risks, solid, but moderate, growth projections for the next couple of years and, of course, a climate of uncertainty, I continue to be in wait-and-see mode,” he added. “Or to use the word of the moment, I see ‘patience’ as a virtue,” Harker said. He stressed his projections are not “written in ink.” “If we had a perfectly functioning crystal ball, those predictions would be infallible — and I’d be playing the lottery a lot more,” Harker continued.
Google's (GOOG) massive footprint is only getting bigger in 2019. CEO Sundar Pichai said in a blog post that the company is building new data centers & offices & expanding several key locations across the US, spending $13B this year. Pichai outlined the plans, which include opening new data centers in Nevada, Ohio, Texas & Nebraska, the first time the company will have infrastructure locations in those states. The company is also doubling its workforce in Virginia, providing greater access to DC, with a new office & more data center space, and expanding its NY campus at Hudson Square. GOOG is showing its willingness to further open its wallet, following a year in which capital spending more than doubled to $25.5B. Far from its roots as an online advertising giant, GOOG is building out data centers to bolster its cloud-computing division as it tries to keep pace with the competition. It's a business that requires providing fast & reliable computing access & resources to large corps & gov agencies. Ruth Porat, finance chief of GOOG parent Alphabet, (GOOGL) said earlier this month that she expects the "capex growth rate in 2019 to moderate quite significantly." Pichai said the plans will likely create tens of thousands of construction jobs across Nebraska, Nevada, Ohio, Texas & Virginia, as well as Oklahoma & South Carolina, where the company is expanding existing data centers. GOOG stock gave back 1, slipping back to 1120.
If you would like to learn more about GOOG, click on this link:
club.ino.com/trend/analysis/stock/GOOG?a_aid=CD3289&a_bid=6ae5b6f7
Google will spend $13 billion on U.S. real estate in 2019, expanding into Nevada, Ohio and Texas
Stocks keep rising even with the turmoil in DC & unsettled trade negotiations with China. The Dow finished off session highs, but the bulls are feeling good. Economic data continues to be good, shown today by the improvement in worker wage gains. There is a feeling that the guys in DC will muddle thru the mess there & a trade deal is near. Profit taking in the last hour could have been expected after the market's latest run, but the averages managed to finish in the black.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Worker paychecks are showing their biggest gains since the recovery began a decade ago, & are more than keeping up with inflation. Labor Dept data shows that real average hourly earnings, which compare the nominal rise in wages with the cost of living, rose 1.7% in Jan on a year-over-year basis. A month ago, the increase was 1.3%. A year ago, the gain was just 0.7%. In all, the rise in inflation-adjusted hourly pay showed the best increase since Jul 2016. The trend comes amid a steadily rising level in gross average hourly earnings, which increased by 3.2% in Jan, right around the best levels of the recovery as well. "This is a welcome increase. It gives workers more purchasing power, but because the pickup has been in line with productivity growth and inflation, it has not added to inflationary pressures," Cleveland Fed Pres Loretta Mester said in a speech yesterday, before the real wage numbers were released. Indeed, skeptics about the strength of the gain say wages have barely kept up with inflation, & for a while that was true. The increase in real average hourly earnings was below 1% for 2 full years straight before Nov 2018's 1.1% gain. The Jan consumer price index showed muted overall inflation pressures, but indicated that real average hourly earnings increased by 0.2% for the month. Real average weekly earnings rose 0.1% for the period, representing a 1.9% annualized gain. For workers, that's meant a better standard of living. At a policy level, the good news likely won't trigger an immediate response from the Federal Reserve, though central bank officials likely are noticing the nascent wage pressures. Payroll gains have averaged a robust 241K over the past 3 months. Fed officials, though, have indicated they are going to take a pause in the rate-hiking cycle until they get a better feel for how economic conditions are unfolding.
Worker wage gains are keeping up with inflation, and then some
The federal gov ran a budget deficit of $14B in Dec, a drop of about $10B (42%) from the same month a year ago, the Treasury Dept reported. Release of the Dec data was delayed by the gov shutdown. Revenue for the month fell 4% overall as corp tax receipts were off by 18% & individual withheld & payroll taxes dropped by 1%. Customs duties, meanwhile, doubled to $6B in the month, reflecting rising tariffs on imported goods. Spending dropped 7% in Dec, as outlays fell for Medicare, veterans’ programs & military programs. But interest payments on the public debt climbed by 16% over last Dec. The Treasury said the Dec deficit would have been $45B if not for benefit payments & receipts being affected by calendar shifts. For the fiscal year thru Dec, the deficit is up 42% to $319B. The Congressional Budget Office projects a deficit of $897B for the full fiscal year (4.2% of GDP). The CBO sees T$ deficits beginning in fiscal 2022. The national debt, meanwhile, is rising rapidly, topping a record $22T this week, less than a year after it crossed the $21T mark.
Federal budget deficit falls to $14 billion in December
Philadelphia Federal Reserve Pres Patrick Harker said his outlook for the economy suggests the central bank can continue to inch interest rates higher this year & next. “My own view is that one rate hike for 2019 and one for 2020 are appropriate,” Harker said in a speech. The Philadelphia Fed pres said he expects GDP to grow “a bit above” a 2% annual rate this year & then slow slightly to 2% into 2020. This year's Jan-Mar qtr will be very slow, with growth closer to 1.5% rate, & then growth will pick up in following qtrs, he added. Harker will be a voter on the Fed's interest-rate committee next year. Harker is watching inflation closely but, at the moment, said he was not troubled by what he was seeing. Core inflation “is not on an accelerated path; if anything, it’s edging slightly downward,” he said. “With a temperate climate for inflation, continued strength in the labor market, very slight downside risks, solid, but moderate, growth projections for the next couple of years and, of course, a climate of uncertainty, I continue to be in wait-and-see mode,” he added. “Or to use the word of the moment, I see ‘patience’ as a virtue,” Harker said. He stressed his projections are not “written in ink.” “If we had a perfectly functioning crystal ball, those predictions would be infallible — and I’d be playing the lottery a lot more,” Harker continued.
Fed’s Harker: One interest-rate hike in 2019 and another in 2020 will be appropriate
Google's (GOOG) massive footprint is only getting bigger in 2019. CEO Sundar Pichai said in a blog post that the company is building new data centers & offices & expanding several key locations across the US, spending $13B this year. Pichai outlined the plans, which include opening new data centers in Nevada, Ohio, Texas & Nebraska, the first time the company will have infrastructure locations in those states. The company is also doubling its workforce in Virginia, providing greater access to DC, with a new office & more data center space, and expanding its NY campus at Hudson Square. GOOG is showing its willingness to further open its wallet, following a year in which capital spending more than doubled to $25.5B. Far from its roots as an online advertising giant, GOOG is building out data centers to bolster its cloud-computing division as it tries to keep pace with the competition. It's a business that requires providing fast & reliable computing access & resources to large corps & gov agencies. Ruth Porat, finance chief of GOOG parent Alphabet, (GOOGL) said earlier this month that she expects the "capex growth rate in 2019 to moderate quite significantly." Pichai said the plans will likely create tens of thousands of construction jobs across Nebraska, Nevada, Ohio, Texas & Virginia, as well as Oklahoma & South Carolina, where the company is expanding existing data centers. GOOG stock gave back 1, slipping back to 1120.
If you would like to learn more about GOOG, click on this link:
club.ino.com/trend/analysis/stock/GOOG?a_aid=CD3289&a_bid=6ae5b6f7
Google will spend $13 billion on U.S. real estate in 2019, expanding into Nevada, Ohio and Texas
Stocks keep rising even with the turmoil in DC & unsettled trade negotiations with China. The Dow finished off session highs, but the bulls are feeling good. Economic data continues to be good, shown today by the improvement in worker wage gains. There is a feeling that the guys in DC will muddle thru the mess there & a trade deal is near. Profit taking in the last hour could have been expected after the market's latest run, but the averages managed to finish in the black.
Dow Jones Industrials
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