Dow fell 10, decliners modestly ahead of advancers & NAZ was off 4. The MLP index slid back to the 201s & the REIT index gained 5+ to the 472s. Junk bond funds fluctuated & Treasuries were being purchased. Oil was steady in the 88s & gold went up 7 to 1809.
AMJ (Alerian MLP index tracking fund)
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US companies unexpectedly cut jobs in Jan for the first time in a year, as a surge in the highly contagious omicron coronavirus variant battered the labor market's recovery from the pandemic, according to the ADP National Employment Report. Companies shed 301K jobs last month, sharply missing the 207K-job gain that was predicted & a major drop from the downwardly revised gain of 776K in Dec. It marked the first time that ADP reported negative growth since Dec 2020, when companies shed 123K jobs before the vaccines were available. "The labor market recovery took a step back at the start of 2022 due to the effect of the omicron variant and its significant, though likely temporary, impact to job growth," Nela Richardson, ADP chief economist, said. The job losses were concentrated heavily in the leisure & hospitality industry, one of the sectors hit hardest by the pandemic. The industry shed 154K jobs in Dec as consumers opted to stay home to avoid the new variant. Beyond that, losses were broad-based: Trade, transportation & utilities eliminated 62K positions, while education & health services fell by 15K & construction shed 10K. Manufacturing also reported losing 21K jobs last month. In all, service-providing industries accounted for 274K of the job losses, with goods producers dropping by 27K.
US companies unexpectedly slash jobs as omicron surge batters economy
A group of some of the world's most powerful oil producers agreed to a further planned increase in output, even as crude prices trade near record levels amid geopolitical tensions. OPEC+, swiftly decided to green-light the return of 400K barrels per day for Mar. The move, widely expected, marks a continuation of the group's strategy to gradually reopen the taps. Led by OPEC kingpin Saudi Arabia & non-OPEC leader Russia, the energy alliance is in the process of unwinding record supply cuts of roughly 10M barrels per day. The historic production cut was put in place in Apr 2020 to help the energy market recover after the coronavirus pandemic cratered demand for crude. OPEC+ has faced pressure from top consumers such as the US & India to pump more to reduce prices & aid the economic recovery. The group has resisted calls for speedier increases despite higher oil prices. Intl benchmark Brent crude futures traded at $90.29 a barrel today, around 1.3% higher for the session & hovering slightly below the seven-year high of $91.70 reached last week. US West Texas Intermediate futures, meanwhile, stood at $89.60, up around 1.6%. OPEC alone accounts for around 40% of the world's oil supply.
OPEC+ agrees on March output rise amid oil price rally, defying U.S. pressure
General Motors (GM) increased its net income 56% last year, helped by higher prices for its vehicles that were made scarce by a global shortage of computer chips. The
automaker said that it made $10B for the full
year & predicted record pretax earnings in 2022 of $13-15B & net income of $9.4-10.8B. Excluding
one-time items, EPS was $7.07 for the year, beating the
estimate of $6.83. Full year revenue of $127B fell short of estimates of $128.7B. In Q4, GM made $1.7B net profit. GM's
sales in the US, its most profitable market, fell 13% for the year, & it was unseated by Toyota (TM) as the nation's top-selling automaker for
the first time. The company lost almost 3 percentage points of market
share, which fell to 14.6%. But GM's average vehicle sales price rose 20% in Q4 from a year ago to nearly $54K as it sold more loaded-out
trucks & SUVs, according to Edmunds.com. Nearly all automakers
have been forced to cut production due to the global semiconductor
shortage, leaving few new vehicles on dealer lots. CEO Mary Barra said reporters that she expects production to improve
thru the year as the chip shortage eases. She said the company plans
to invest more money in electric vehicles & upgrading factories to
prepare for more battery powered vehicles. GM will accelerate $35B worth of investments previously planned thru 2025. She added the company will consider reinstating its div, but won't
at this time because its priority is to accelerate its electric-vehicle
growth plan. Adjusted EPS was $3.59 in Q4, beating estimates of $3.10. The stock fell 2.12 (4%) on the news.
If you would like to learn more about GM click on this link:
club.ino.com/trend/analysis/stock/GM_aid=CD3289&a_bid=6ae5b6f
Record sales prices drive GM profit up 56% to $10B last year
Markets keep drifting sideways looking for direction. Meanwhile demand for oil is very strong as OPEC sticks to its plan for modest production increases. Also, a few of the marginal members (such as Libya) have trouble filling their quotas due to internal strife. As usual, the jobs report on Fri will be big, although it may be be short of robust.
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