An “ok” jobs report that was below expectation did little to please the market as indexes started a bit in the red and just sold off almost the entire session. The S&P 500 fell 1.85% while the NASDAQ was slammed 3.25%. The NASDAQ was just crushed by technology stocks as LinkedIn’s selloff caused panic. It can’t be long now before traders demand a Fed rate cut!
The U.S. economy added 151,000 jobs in January, according to the Bureau of Labor Statistics. Economists were expecting a gain of 190,000. The unemployment rate, however, fell to 4.9 percent from 5.0 percent, while wages rose 0.5 percent. The strong 292,000 gain in December was also reduced by 30,000 workers. The labor participation rate did pop 0.1% but is still near multi decade lows.
Keep in mind if people give up looking for a job for 6 months or work in the underground economy they fall out of the government’s statistics and are thus no longer “unemployed” so take that 4.9% figure with a lot of salt.
An interesting blurb from Bespoke Premium on dividends:
Whenever you see comparisons between any period and 2008 it grabs your attention, and that’s certainly what happened to us when we saw the above headline earlier this week. As shown in the
chart below, according to data from Standard & Poors, there were a total of 394 dividend cuts for calendar year 2015, surpassing 2008’s total of 295 by nearly 100. Dividends are often considered sacrosanct by investors, so for most companies, the decision to cut it is not done willy-nilly.
Not to minimize the significance, but the peak year for dividend cuts was actually in 2009 when there were 527, and there is still a ways to go before we get there.Continue reading