Don't Panic but Place Your BetsWeekly Initial Jobless Claims were reported at 386K for the week ending April 14. That was more than the consensus expectation for 365K, and the press got to howling. The thing is (the thing reporters do not know) - is that economists hardly make an effort in estimating the weekly claims count, and so the market mostly doesn’t notice the comparison. So smart money could give a damn about what really was just a 2,000 person decline week-to-week in jobless claims from the prior week’s revised count. Granted, the prior week was revised up to 388K from its initial reporting at 380K.
What’s really disturbing our counterparts in the economic debate is that the change in the four-week moving average for jobless claims increased again this week, rising by another 5,500 folks to settle at 374,750. However, settled it most likely is not. You see the trend in economic data, even before this week’s dysfunctional flow, has indicated poorly. Even before the latest reporting of Philadelphia and New York manufacturing malfunction, with each regional index showing a slowing in growth, we were reporting trouble in manufacturing. The Industrial Select Sector SPDR (NYSE: XLI) is off 2.5% since we authored that article.
Prior to this week’s declines in homebuilder sentiment, housing starts, and the pace of existing home sales, we were pounding on the front door against the sector. The SPDR S&P Homebuilders (NYSE: XHB) is off 6.6% from its 52-week peak through the 19th of April. With regard to the labor market, we were pointing out that the employment situation is just not well and would likely get worse despite its temporary fever break. The shares of employment services firms Robert Half (NYSE: RHI), Korn Ferry (NYSE: KFY), Manpower (NYSE: MAN) and Monster Worldwide (NYSE: MWW) were all painted deep red Thursday.
As far as the consumer is concerned, we dissected the numbers and weren’t impressed. We showed you inconsistencies in auto sales data and the fine print behind hot builder supply sales. Thursday, the Consumer Discretionary Select Sector SPDR (NYSE: XLY) and the SPDR S&P Retail (NYSE: XRT) were each off near 1%. Generally, we’ve been warning for quite a while now that it seems the economy is creeping toward recession due to infection from Europe, and with an Iranian trigger cocked and a gun barrel up our throats. It seems the market is finally taking notice, with the latest several weeks’ strife reflected again in declines Thursday in the SPDR Dow Jones Industrial Average (NYSE: DIA), the SPDR S&P 500 (NYSE: SPY) and the PowerShares QQQ (Nasdaq: QQQ).
So forgive me for rolling my eyes and casting complaint as the media and market finally take notice of what I’ve been farting into the wind for weeks. Even though it stinks (the economy) I’ve recommended a few long-term ideas as an angle to deflect the darkness. We talked up five investments for a Mega Million Jackpot, including gold on a deep down day. The SPDR Gold Shares (NYSE: GLD) were in the green Thursday by the way. Also, we saw a catalyst driving a move in Chinese microcaps and, separately, we showed you two stories where value had been added through company specific events. Marley, my assistant editor and dear dog-friend just said, if he could, “What more can you do Pops?” All I can do is keep talking and hope you tell your friends about what you hear here. In the meantime, you had better hurry and get your bets to the table. Calling all bets? Calling all bets!
Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).
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