Dow jumped 504, advancers over decliners a modest 2-1 & NAZ added only 24. The MLP index rose 3+ to the 147s & the REIT index was even at 361. Junk bond funds climbed high along with stocks & Treasuries were sold while stock were being purchased. Oil went to an almost 1 year high & gold sank 46 to 1908.
AMJ (Alerian MLP index tracking fund)
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US private employers in Dec slashed jobs for the first time in 6 months, suggesting the labor market's recovery from the coronavirus crisis has stalled amid a resurgence in cases nationwide, according to the ADP National Employment Report. Companies shed 123K jobs last month, missing the 88K-job increase expected. "As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020," Ahu Yildirmaz, VP & co-head of the ADP Research Institute, said. The job losses were concentrated heavily in the leisure & hospitality industry, one of the sectors hit hardest by the pandemic. The industry shed 58K jobs in Dec as state & local govs implemented new lockdown measures restricting indoor dining, while cold weather limited restaurants' ability to offer outdoor dining. Trade, transportation & utilities eliminated 50K workers & information services cut 6K. Manufacturing also saw a decline of 21K jobs, while education fell by 1K. Trade, transportation & utilities eliminated 50K workers & information services cut 6K. Manufacturing also saw a decline of 21K jobs, while education fell by 1K. Large companies accounted for the bulk of the layoffs: Businesses that employ more than 1K workers cut 169K jobs last month. Small businesses with fewer than 20 workers cut 16K positions. Medium businesses increased their headcount by 37K.
US companies unexpectedly shed 123,000 jobs in December
Sales of new vehicles in the US fell 14.6% last year, but a H2 rebound from a coronavirus -related plunge in the spring kindled optimism for a recovery later this year. Automakers reported selling 14.6M new vehicles for the year, a far cry from the 5 previous years with sales over 17M. But the 2020 performance was better than most forecasters had expected when the pandemic forced auto factories & many dealerships to shut down in Apr & May. General Motors (GM) Chief Economist Elaine Buckberg said she expects sales to recover in the spring. With warmer weather & widening novel coronavirus vaccinations, life should return more toward normal, lifting the job market & auto demand, she said. “We feel like there's light at the end of the tunnel,” said Randy Parker, VP of sales for Hyundai. “I think it's going to be a solid year.” But Parker said he's still cautious, with hospitals overflowing in California & cases rising in other states. “It's far from over,” he said. “We can't afford to let our guard down at this point.” Last spring, unemployment skyrocketed as states imposed lockdowns & other measures to limit the virus' spread. Auto sales tumbled 34% in H1 as factories closed for about 2 months, cutting off the supply of new vehicles. But as the summer came, people with jobs started splurging on loaded-out cars, trucks & SUVs late in the year. That & low interest rates drove sales up & pushed the average auto sales price to a record of just over $38K in Dec, according to JD Power. Also in Dec, sales rose 5% from the same month in 2019 & GM said its sales improved every month since May. “Those that haven't been financially impacted by the pandemic are redistributing funds from travel to home improvement, house purchasing and vehicles,” said Jeff Schuster, pres of global vehicle forecasting for the LMC Automotive consulting firm. Automakers still haven't been able to make up for production lost during their factory closures, & that has kept inventory tight & limited buyers' choices to more expensive vehicles, Schuster said. Retail sales to individual buyers are close to normal levels, but sales to fleet buyers such as rental car companies are still down.
Late sales rebound helps US automakers avoid 2020 disaster
Americans vaccinated against Covid-19 cannot simply return to their pre-pandemic ways of life, Dr Scott Gottlieb said. “It’s not going to be like it was in 2017 and 2018, when we didn’t worry at all about catching a respiratory pathogen,” the former Food & Drug Administration (FDA) commissioner added. “We’re going to worry about it, even if we’re vaccinated.” However, he did say, “I think we’ll worry much less than we’re worrying right now, hopefully.” The novel coronavirus emerged in late 2019 in Wuhan, China and spread around the world, causing a total of nearly 87M infections & more than 1.87M deaths, according to data from Johns Hopkins University. The US, in the midst of another case & fatality surge, accounted for more than 21M of those global cases & over 357K of the deaths. Gottlieb, who led the FDA in the Trump administration in 2017-2019, likened the potential post-coronavirus changes to life in America to flying on an airplane after the Sep 11, 2001, terrorist attacks. For example, he said he believes due to the pandemic that public venues may continue taking temperature screenings. “I just think things are going to be different, just like they’re different when you go through an airport now after 9/11,” he said. “I don’t think masks are going to be mandatory next fall and winter if we can get the vaccination rate up and if these new variants go away or don’t become prevalent. But I do think a lot of people will want to wear masks, and that’s OK.” Gottlieb cited a couple reasons behind his beliefs, including reluctance by some people to be vaccinated against Covid-19, just like there's not universal vaccination against seasonal influenza. Additionally, he stressed that the vaccines protect people from developing symptomatic Covid-19, not necessarily from ever being infected by the coronavirus. “It’s going to take time to fully answer that question because we’re going to be dependent on real-world evidence, but the conventional wisdom ... is that the vaccine is probably preventing some people getting infected and probably reducing likelihood of people who are infected [from transmitting] the virus,” Gottlieb said. “What we don’t know is the magnitude of that effect.”
Gottlieb: Getting vaccine doesn’t mean people can just return to pre-Covid life
The rally today is somewhat muted with tech stocks on NAZ are lagging behind & a less than strong advance decline ratio. Auto sales are reasonably strong, all considered, & demand for housing is very strong. The rest of the economy is somewhat sluggish (although better than much of the other major economies)..
Dow Jones Industrials
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