After a brutal month in the aggregate for Growth stocks in April, though not so for Dividend / Value or Food / Restaurant stocks, I needed some time to decompress. So, we celebrated, belatedly, after Passover ended, my birthday, at a Lionel Richie concert at Planet Hollywood (the premier concert of his residency) and then flew out to Oregon the next morning for several days with cousins Robin and Tony.
The nice aspect of working in the Pacific time zone is that my business day ends at 1PM when the market closes, so we had plenty of time to explore Ashland and the Rogue Valley. Sunday we strolled through Ashland, a nice little town, the next day we went for some late afternoon wine tasting at a local vineyard. Wednesday night we took in a production of The Yeomen of the Guard at the Oregon Shakespeare Festival, in which cousin Tony, an internationally well-known and accomplished actor starred in the cast. It was really a fantastic show and the festival is a must see.
So after a month and a week of the exciting NCAA Finals, UPOD, overreactions to earnings reports, more crude oil volatility and the ascendency of Donald Trump to the presumptive Republican Presidential nominee, we are back to another monthly jobs report.
On a micro level, the US economy is expected to add 191,000 jobs in April after adding 215,000 jobs to non-farm payrolls in March. However, the ADP (ADP) employment report which was released on Wednesday was way off the mark, sending the markets dramatically lower. As usual the official April job gains will be cause for market volatility.
However, on a macro level, including today’s report, there will be seven US jobs reports before the Presidential Election on November 8. Typically, this could be a deciding factor for the election as front and center, the economy is the top priority on voters’ minds and jobs are prima facie evidence as to how the economy is performing. You can set aside all the noise about abortion, ISIS, private server emails and illegal immigration; as the economy and hence jobs matter most. Recall, the economy must generate about 100,000 non-farm jobs every month to absorb new workers (on a net basis) entering the workforce. Should non-farm payroll additions continue to decline; it peaked in October 2015; then Hillary Clinton will have a problem getting elected, whether she is a woman or man or what bathroom she uses.
Also, on a macro basis, if the FOMC is going to hike rates before the election, it will need to see better jobs growth. Furthermore, given the election in November, expect the FOMC to take action no later than its July meeting, otherwise risking undue influence on the election.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC held no positions in stocks mentioned; although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
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