Dow was off 30, decliners over advancers better than 3-2 & NAZ dropped 126. The MLP index declined 2 to the 212s & the REIT index slipped back 1+ to the 371s. Junk bond funds were mixed & Treasuries saw heavy selling, bringing higher yields. Oil was flattish in the 74s & gold fell 5 to 1794.
AMJ (Alerian MLP index tracking fund)
Hiring freezes & layoffs
are on the rise as the uncertain economy drives major players in the
tech, automobile, media & food industries to make unprecedented
cutbacks in their operations. But now, new data shows nearly ½ of all
workers are looking to quit anyway. Even with growing concerns
of a potential recession, 46% of professionals are already looking to
plan to find a new job in H1-2023, according to a
recent survey from business consulting firm Robert Half. Tha's up from
41% just 6 months ago, according to the company's biannual Job Optimism
Survey. The media industry was also recently hit hard as hundreds of industry
staffers were laid off in recent weeks including those who worked for
BuzzFeed, CNN & Gannett, Digital media company BuzzFeed,
one of the latest media companies to reduce its workforce, said it's
trying to "weather the economic downturn" which it projects will extend
into 2023. Still, 60% of 18-25-year-olds in the workforce who were surveyed said they are likely to jump ship. "Noise around hiring freezes and layoffs at some companies
hasn't seemed to faze workers – many are just as confident in their job
prospects as they were six months ago," Paul McDonald, a senior
exec director at Robert Half, said. Given the tight labor market, workers "are curious about exploring new and more fulfilling career paths," McDonald added.
Layoffs are on the rise, but nearly 50% of workers are still looking to quit in 2023
Homebuilders were less confident about their business in Dec, but they are starting to see potential green shoots. Builder sentiment in the single-family housing market dropped 2 points to 31 in Dec on the National Association of Home Builders/Wells Fargo Housing Market Index (NAHB). Anything below 50 is considered negative. This is the 12th straight month of declines & the lowest reading since mid 2012, with the exception of a very brief drop at the start of the Covid pandemic. The index stood at 84 in Dec of last year. “The silver lining in this HMI report is that it is the smallest drop in the index in the past six months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment,” said NAHB chief economist Robert Dietz. “Mortgage rates are down from above 7% in recent weeks to about 6.3% today, and for the first time since April, builders registered an increase in future sales expectations.” Of the index's t3 components, current sales conditions fell t3 points to 36, buyer traffic was unchanged at 20, but sales expectations in the next 6 months increased 4 points to 35. Regionally, sentiment was strongest in the Northeast & weakest in the West, where prices are highest. The NAHB continues to blame high mortgage rates, which despite the recent drop are still about twice what they were a year ago. That has caused affordability to plummet. “In this high inflation, high mortgage rate environment, builders are struggling to keep housing affordable for home buyers,” said NAHB Chair Jerry Konter, a builder. “Our latest survey shows 62% of builders are using incentives to bolster sales, including providing mortgage rate buy-downs, paying points for buyers and offering price reductions.”
Homebuilder sentiment drops for the 12th straight month, but a bottom may be near
Global coal use is on course to increase by 1.2% to hit a record high this year, according to a report from the Intl Energy Agency IEA). It comes at a time of significant volatility & uncertainty in global energy markets, with the IEA stating that Russia's invasion of Ukraine in Feb. 2022 had “sharply altered the dynamics of coal trade, price levels, and supply and demand patterns in 2022.” “Coal markets have been shaken severely in 2022, with traditional trade flows disrupted, prices soaring and demand set to grow by 1.2%, reaching an all-time high and surpassing 8 billion metric tons for the first time,” the IEA said in its Coal 2022 report. The price of fossil fuels saw a substantial jump this year, the agency said, “with natural gas showing the sharpest increase.” “This has prompted a wave of fuel switching away from gas, pushing up demand for more price competitive options, including coal in some regions,” it added. Despite the increase in coal demand, the picture is a complex one. The IEA noted that “higher coal prices, strong deployment of renewables and energy efficiency, and weakening global economic growth are tempering the increase in overall coal demand this year.” It said that coal use in electricity generation was set to rise by a little over 2% this year. Coal usage in industry is actually slated to fall by more than 1%, with this decline attributed to lower steel & iron production. “The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” IEA Director of Energy Markets & Security Keisuke Sadamori said. “Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions.” “At the same time, there are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency and heat pumps — and this will moderate coal demand in the coming years,” he added. Gov policies would be “key to ensuring a secure and sustainable path forward,” he said.
Global coal use is on course to hit all-time high this year, IEA says
Dow Jones Industrials
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