WASHINGTON, Jan. 16 – Back some years ago, there was a TV show called “Spin Control,” based, of course, right here in Washington, D.C. where “spinning” bad news into good to help out the party in power is a way of life. Today’s so-called job creation numbers reported here are a case in point.
The government reported Friday that 292,000 jobs were “created” in December, a really great looking number that was within striking distance of the 300,000+ number we were told, pre-Obama, the U.S. would need over time to get back to full employment.
We were also told, however, that the average hourly wage dropped by a penny, although that was buried in the crowing about America’s low, low 5 percent unemployment rate. But this, along with some vaguely good news out of China, was enough to goose stocks at the opening.
Reading between the spinning lines, however, ZeroHedge spots several inconvenient truths:
It will probably come as no surprise to anyone that for another consecutive month, the well-paying jobs: mining and logging, wholesale trade, manufacturing, and information barely posted a net increase.
Alternatively, the worst quality jobs continued to soar, pushed higher once again by none other than education and health, where Obamacare was once again instrumental to propel healthcare jobs by a 52,600 surge in December.
The rest was just ugly: temp help soared by 34,400, while waiter and bartenders added another 36,900. The one surprising, and positive outlier: construction jobs – traditionally a well-paid category – soared by 45,000, something very unexpected for the otherwise freezing month of December. This, however, is easily explained by two words: warm weather…. This means that in January once the weather effect wears off, all these jobs will be lost and then some.
Finally, employment of “couriers and messengers” gained 15k, likely reflecting seasonal adjustment challenges related to secular growth in online holiday shopping. The flip side: thousands of malls are going empty, and soon to crush the CMBS market.
Condensed version: Lots of those 292,000 jobs were Chrismas-shopping oriented and are even now going away again. Many of the rest are subpar, “get some income at any costs” jobs that have nothing to do with starting or resuming careers. Many of these are in the minimum wage, drudge work category within healthcare, courtesy of Obamacare, which, instead of a rising tide that lifts all boats, is a tide going out that’s sinking them when it comes to take-home pay.
For the average American worker struggling to make ends meet, the translation is even simpler. To borrow an old cliché, “The hurrieder I go, the behinder I get.”
Despite the somewhat surprising but very modest recovery in Chinese markets today—a mild positive—oil experienced a brief jump this morning before beginning what seems to be the next phase of its waterfall decline to price oblivion.
Adding the ongoing oil crash to the dawning realization that today’s job report was another lesson in the factual worthlessness of Washington spin, and this morning’s nice stock market gains are turning into something that promises to be another bloodbath of red ink.
The Dow is currently off about 64 points as of 11:30 EST. The S&P 500 is down nearly 9, and the NASDAQ, hit, like all the averages by the failure of Apple (symbol: AAPL) to thrive, is off a nasty 18 and change.
AAPL has been experiencing a veritable torrent of mindless selling for months. But it really hit a fever pitch from the first opening bell of 2016. However many bloody iPhones Apple sells this fiscal year, they’ll still be making lots more money than any company on earth.
But once the HFTs and their machines hit the SELL button… well, as Yogi used to say, “It ain’t over ‘til it’s over.” And with AAPL’s brief and unimpressive morning up-move looks likely to be negated at the noon hour, clearly the mindless waves of selling that are engulfing this stock ain’t over. AAPL’s overweighting in major averages is thus an outsized force in their continuing plunge downward.
In fact, what we saw this morning was likely a sea change in trader sentiment, driven, of course, by those HFT algorithms, which a real SEC and Federal government would have outlawed yesterday. To wit: since some time in 2009 or so, the Wall Street mantra was “buy the dips,” or, as a number of sites put it more colorfully, “BTFD” (“buy the effing dips”). I.e., whenever stocks are experiencing a down day, back up the truck and start loading it.
But today, we may have seen that sea change, with 2016’s new mantra becoming “sell the rallies” (or, perhaps, “STFR”). As we approach noon, that’s sure looking like a winner, at least this January 2016.
Today’s trading tips
We really try to be helpful here by telling you what we’re doing to try to make money in our own accounts. But as even the (unfairly) sainted Warren Buffett found out in 2015, no tried and true investment system worked in 2015. And for Bufett, the Maven, nearly all hedge funds and anyone else, these systems are not working even worse in the early days of 2016. Holding a few recovering REITs and decently rated preferred stocks is at least reinforcing portfolio barricades. But that’s about it.
Maybe a few short-term CDs are in order for now. Three-monthers are now paying a whopping 0.55 percent right now, actually a massive change from most of 2015 and preceding years. Yeah, that’s pathetic. But holding wonderful companies like Apple and watching them tank over 30 percent for no particularly good reason is even more pathetic. So maybe we just sit and wait in a few of those 0.55 percent CDs until the machines are done puking out shares of every stock that was ever issued.
Have a good weekend. At least we won’t have to think about trading for two whole days, right?