Dow dropped 127, decliners over advancers 5-2 & NAZ retreated 193. The MLP index was about even, near 231, & the REIT index sank 9+ to the 208s on thoughts about higher interest rates. Junk bond funds hardly budged & Treasuries were heavily sold, pushing yields higher. Oil sank 2+ to the 73s & gold plunged 52 to 1878 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Layoffs are mounting as concerns of a weakening economy grow. The tech industry has undeniably taken the biggest hit as companies
try to feverishly cut costs after hiring too rapidly during the COVID-19
pandemic However, job cuts have affected several industries –
from media to Wall Street to the crypto world – in recent
months. Recently, the growing list has included companies such as FedEx (FDX),
Hasbro (HAS) & Newell Brands (NWL), parent of Sharpie & Yankee Candle, proving
that the slowdown is spilling outside the tech sector. Despite the growing layoffs, the gov offered up some optimistic news in regard to job growth in Jan. Employers added 517K jobs
last month, the Labor Dept said in its monthly payroll
report released today. This topped the 185K jobs forecast & marked the best month for job creation since
Jul. The unemployment rate, meanwhile, dropped to 3.4%, the lowest level since 1969.
Tech companies lead job cuts as economic uncertainty mounts
For most Americans, inflation & rising interest rates are a one-2 punch. On the heels of another rate hike this week by the Federal Reserve, credit card annual percentage rates are already near 20%, on average & set to climb even higher. At the same time, more consumers are leaning on credit to afford increasingly expensive necessities, like food & rent. That helped propel total credit card debt to a record $931B at the end of 2022, a 18.5% spike from a year earlier, according to the latest quarterly report by TransUnion. The average balance rose to $5,805 over that same period. At nearly 20%, with minimum payments toward this average credit card balance, it would take you more than 17 years to pay off the debt & cost more than $8213 in interest, Bankrate calculated. “Whether it’s shopping for a new car or buying eggs in the grocery store, consumers continue to be impacted in ways big and small by both high inflation and the interest rate hikes implemented by the Federal Reserve,” said Michele Raneri, VP of US research & consulting at TransUnion. Overall, an additional 202M new credit accounts were opened in Q4, led by originations among Generation Z, or adults ages 18-25, & the tally of total credit cards hit a record 518.4M. As the number of credit card accounts in the US rises, more new customers are subprime borrowers, generally meaning those with a credit score of 600 or below, according to TransUnion, in part because of the flood of younger borrowers gaining access to credit cards. But at the same time, delinquencies rose as lenders expand access to less-experienced credit users. TransUnion defines a delinquency as a payment that's 60 days or more overdue.
U.S. credit card debt jumps 18.5% and hits a record $930.6 billion
With United Parcel Service’s (UPS) labor negotiations approaching, CEO Carol Tomé sounded confident this week, saying that a “win-win-win” agreement would be reached before the end of Jul. But her optimism comes as the Teamsters union, which represents more than 340K UPS workers, amps up pressure on the delivery giant. “There
have been a lot of articles and headlines that might cause someone to
question whether or not a win-win-win is achievable,” Tomé said, acknowledging talk of tougher negotiations. The Teamsters publicly pledged to launch a strike
if a satisfactory contract is not reached. “Whether there is a strike
of UPS workers is up to UPS,” said a spokesperson for the
Teamsters. The talks start in Apr, with the current national
contract set to expire on Jul 31. Negotiations for local contracts
begin this month. A strike could do substantial damage to UPS
operations & create problems for businesses & consumers alike. In
Q4-2022, UPS workers delivered a global average of 28M packages per day. Even
with the rumblings about a potential strike, Tomé is maintaining a
positive outlook given that unionized workers “have been a part of the
UPS family for more than 100 years.” “This is not our first rodeo,” she added. But this year’s talks will be different. The stock rose 25¢.
If you would like to learn more about UPS, click on this link:
club.ino.com/trend/analysis/stock/UPS_aid=CD3289&a_bid=6ae5b6f7
Gold futures settled at their lowest in more than 3 weeks, down 2.7% from last Fri's finish. Gold took a hit because the positive surprise on the jobs number is a strong indication that the Federal Reserve has more than a single rate hike left in it. Gold was hit harder than equities because it's been outperforming stocks over the last few months. Profits are being taken by those who have enjoyed that ride. Gold for Apr fell $54 (2.8%) to settle at $1876 an ounce.
Gold Falls Below $1,900 After US Jobs Data Smashes Forecasts
Oil prices were taken on a wild ride to end the week, as WTI & the global benchmark Brent both pushed higher after a strong US jobs report for Jan, but then sold off throughout the rest of the session. Brent ended up falling below $80 for the first time in several weeks, & WTI crude finishes 3.3% lower at $73.39, the lowest closing price since Jan 4. After responding strongly to the employment data oil prices have turned decisively lower with spot nearing a critical technical support level. The strength in the $ & backup in yields is setting the stage for spot oil prices to test the $70 area.
Oil Ends Sharply Lower Despite US Jobs Report
Investors will have a lot to think about over the weekend after today;s report on jobs. For the week, Dow finished down 50.
Dow Jones Industrials
