Quick Take: Jobs, Powell, Venezuela and Apple

It’s Jobs Friday, so let’s run down the numbers to start the day…

The Bureau of Labor Statistics reported that Nonfarm Payrolls, which is one of the most closely followed gauges regarding the state of the economy, rebounded sharply in October as the economy added 261,000 new jobs during the month.

However, the number of new jobs was well below the consensus estimates for an increase of 310K but was also well above September’s upwardly revised job growth of 18K.

The revisions to August (from 169,000 to 208,000) and September (-33,000 to 18,000) produced an additional 90,000 new jobs than had been previously reported.

The nation’s Unemployment Rate dipped to 4.1% in October which was a tenth below expectations. The current Unemployment Rate is the lowest seen in seventeen years.

According to MarketWatch, “The last time it was this easy to find a job was in the waning days of Bill Clinton’s presidency.”

However, the key to this report is that fact that the data is still being impacted by the hurricanes Harvey and Irma. If one takes September and October together you get an average of 139,000 new jobs created over the period, which, on the surface represents a significant dip in the monthly average for job creation.

All in all, this was a decent report and is unlikely to have any impact on Yellen’s plans to raise rates next month. Yet, many analysts suggest that the last two months data should be taken with a grain of salt.

In other news, Fed Governor Jerome Powell is slated replace Janet Yellen as Fed Chair (however, he must be confirmed by Congress first), the GOP is scurrying to get their tax plan put together, and Venezuela is planning to “restructure” its debt (according to Bloomberg, PDVSA bonds maturing in 2027 were quoted at 20 cents on the dollar in London this morning.).

Oh, and in case you missed it, Apple reported blow-out earnings after the bell yesterday. One of the interesting tidbits from the report was Tim Cook’s comment that the company’s “wearable” division would be a Fortune 400 company if it were a standalone entity. The news has the stock and the NASDAQ flying in the early going.

Thought For The Day:

The art of being wise is the art of knowing what to overlook. -William James

Current Market Drivers

We strive to identify the driving forces behind the market action on a daily basis. The thinking is that if we can understand why stocks are doing what they are doing on a short-term basis; we are not likely to be surprised/blind-sided by a big move. Listed below are what we believe to be the driving forces of the current market (Listed in order of importance).

      1. The State of Tax Reform

      2. The State of the Earnings Season

      3. The State of Fed Policy/Leadership

      4. The State of the Economy

Wishing you green screens and all the best for a great day,

David D. Moenning
Chief Investment Officer
Sowell Management Services

Disclosure: At the time of publication, Mr. Moenning and/or Sowell Management Services held long positions in the following securities mentioned: none. Note that positions may change at any time.


The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any investment program.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

David D. Moenning is an investment adviser representative of Sowell Management Services, a registered investment advisor. For a complete description of investment risks, fees and services, review the firm brochure (ADV Part 2) which is available by contacting Sowell. Sowell is not registered as a broker-dealer.

Employees and affiliates of Sowell may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Positions may change at any time.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Advisory services are offered through Sowell Management Services.