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 | Dallas, TX January 7, 2010, 08:00 EST |  |   |
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| U.S. stock index futures are pointing toa slightly lower opening on Thursday. The focus remains on Washingtonpolitics, especially health care and now the Democrat senate and housepersonnel changes as key players retire. The employment report will bethe short term catalyst, so expect cautious trading today. Today's Economic Calendar:
Changes, changes, and more changes.. According toThe The New York Times: "TheSouth has become the first region in the country where more than halfof publicschool students are poor and more than half are ethnic minorities, areport found." China raises interest rates. According to The WallStreet Journal: "China'scentral bank unexpectedly raised a key interbank market interest rateThursdayfor the first time in nearly five months, signaling a change in itspolicy focustoward pre-empting inflation risks in the new year. The tighteningmove, in theform of a higher yield in its weekly bill sale, came less than a dayafter thePeople's Bank of China hinted its priorities had shifted towardmanaging inflationexpectations and away from single-mindedly supporting economic growth." Telecommuting and self employment grow as joblessnessremains high. Accordingto The The Wall Street Journal: "A growing number of workers face thesehasslesevery day. As of November 2009, there were nine million self-employedworkersin the U.S., according to Bureau of Labor Statistics data. Meanwhile,the volumeof workers telecommuting at least once a month for employers grew 17%between2006 and 2008, to 33.7 million workers." Self described "Chinese Warren Buffett" wanted in Canda.According toReuters: "Weizhen Tang, 51, is accused of defrauding more than 100victims inCanada, China and the United States, according to Toronto police.Ontario securitiesregulators barred Tang in June from any trading activity and warnedinvestorson Wednesday they believed Tang was against soliciting business fromrelativesof his previous victims. Tang, who local news reports said was believedto havefled to Hong Kong, was scheduled to go on trial in Ontario for allegedsecurityviolations in April, according to the Ontario Securities Commission."Mr. Tangis alleged to have run a Pozi scheme. One in five Guantanamo detainees released rejoingmilitants. In a headscratching report, more because it's so obvious that even the WhiteHouse hasto get it, Reuters reported: "A classified Pentagon assessment showsabout onein five detainees released from the U.S. military prison at GuantanamoBay hasjoined or is suspected of joining militant groups like al Qaeda, U.S.officialssaid on Wednesday." Reuters added: "More than 560 detainees fromGuantanamo havebeen released, the vast majority of them by the Bush administration. AnObamaadministration official said the White House had received "noinformation thatsuggests that any of the detainees transferred by this administrationhave returnedto the fight." That's almost as if they were saying that the carbonemmittedfrom the president' motorcade hasn't been proven to contribute toglobal warming,if there is such a phenomenon. Today's news items continue to hightlight the emerging trends of thisnew decade,including population shifts, new trends in the workplace, interest ratetrends,and the one thing that never seems to change, the government's lack ofcoordinationbetween key agencies, especially in intelligence where some wouldrather playpolitics while others actually try to do the right thing. These new trends and the inefficiencies in the system will continue tocreateopportunities for investors, managers, and business people. We're hereto helpyou make sense of them. |
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While Americans may hate their job, those who actuallyhave jobs are in better shape than those who don't. That's why thisFriday's employment data will likely set the tone for trading in theU.S. stock market for some time. A recent survey from the Conference Board confirmed what many of us whoworkfor a living already knew. Lots of folks don't like their job.According to thereport, 45% of those surveyed said they were satisfied with their jobs,downfrom 61% in 1987. According to The Wall Street Journal: "The drop injob satisfactionbetween 1987 and 2009 covers all categories in the survey, frominterest in work(down 18.9 percentage points) to job security (down 17.5 percentagepoints) andcrosses all four of the key drivers of employee engagement: job design,organizationalhealth, managerial quality, and extrinsic rewards." All ages were just as unhappy, suggesting that the problems are accrossthe boardand that they may have some long term implications for corporations aswell asindividuals. According to The Journal, there are multiple factorscausing theresults as "more companies have dropped or cut pension benefits andasked employeesto contribute more to health care. Meanwhile, wage growth has beenrelativelystagnant. Ironically, the two-decade decline in happiness has coincidedwithsubstantial increases in worker productivity. Gains in the tech sectorhave ensuredthat even as workers become more unhappy, they have become moreproductive." In the short term, though, our employment bellwether stocks suggestthat WallStreet is leaning toward a more positive employment report than theyperhapsreceived last month where there was a significant up side surprise. Last month's report surprised traders with a much less than expected11,000 jobslost. Estimates for this month are between 40,000 jobs lost to 50,000jobs gained,a fairly wide range. Preliminary indicators have been mixed but whentaken togethersuggest that a bottom has been put in place and that job losses arelikely tocontinue to decrease, at least in the short term. The key, though, iswhetherjobs will actually be created, and at what pace. Wall Street wouldlikely takea decent job gain as a positive, as it would illustrate that theeconomy is recoveringbut at a pace that won't make the Federal Reserve raise interest ratestoo aggressively.China raised interest rates overnight. Administaff (NYSE: ASF) our small business barometer has stabilized.This makessense, given some of the items that we have been reporting here. Forexample,outsourcing to contractors by small and large businesses seems to bestabilizingand may be on the rise. At some point that could lead to companiesstarting tohire temporary consultants and other workers, a prelude to a possiblerise inAdministaff's business, that of human resource management for small tomidsizecompanies. | Thought Provoking Commentary. World Class Analysis. ETFTiming. Proven Strategies For Rising And Falling Markets... |
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Our second bellwether, MonsterWorldwide (NYSE: MWW) has been on a tear lately. The latest MonsterEmployment Index (December) fell. Yet, the company notes that this is aseasonal tendency and that overall it sees improvement in the jobmarket as the index's year over year decline was the smallest in 18months. Of some concern in the Monster Index was the drop in thereading for New England. According to the report, the demand for onlineworkers in Massachusetts "slipped to a five-year low." There was noreason given for the drop. Yet, one could speculate that coldtemperatures may have had something with it. The state, though, has arather ambitious health care mandate in place, which may be affectinghiring practices.
Chart Courtesy of
Conclusion
The U.S. economy is all about jobs. And jobs are linked to trends,economic,demographic, and also to interest rates.
Today's IQ suggests that we are at some sort of crossroads. The item inour "Newsfor Thought" segment about the changing demographics in public schoolsis likelya prelude to important changes that lie ahead in the U.S. Aside fromculturalchanges, there will be more opportunities for businesses to cater todifferenttastes, which in many cases will be influenced by ethnicity.
Our lead tells us about how most Americans hate their jobs and why.Companieshave lost touch with their employee's needs. The drive towardglobalization andquarterly profits has created an atmosphere of disatisfaction. As CEO'sand uppermanagement get more, workers have been getting less. No, we're notturning lefthere, we're just pointing out the facts.
It's not accross the board, but it's a phenomenon that is spread outwidely throughoutthe economy. The key is what you do about it. You can look forgovernment tocorrect the imbalance, Obama's way, or you can look for a way to do ityourself,the founder's way. The key is to find the right combination and to makeit workfor you. There are still plenty of opportunities left, despite Congressand theWhite House.
Businesses who adapt, or cater to special niches will likely surviveand eventhrive during difficult times. In Dallas, the Fiesta supermarkets,which caterto Latin American tastes are hugely successful, as they deliverproducts thatsatisfy the traditional needs of that population segment. And the factthat theyprovide the things that these folks need, at a reasonable price, allowsthemto mark up prices for mainstream products such as detergents, softdrinks, andsports drinks, creating a series of profit centers for the store.
Fiesta's lower prices, though, attract all ethnic groups, including nonLatins,thus expanding the company's sales. Fiesta started in Houston and nowhas 55stores in Houston, Austin and Dallas. The company was started in 1972and wasacquired in 2004. It's privately owned.
Yet, the founders of the company saw something that turned out to benot justcorrect in its vision, but wildly successful and that is a perfectexample ofwhere we are today.
1972 was the year before the 1973-1974 bear market and recession. Yet,it wasa perfect time to launch a store that catered to folks with modestincome andspecial needs.
What's the bottom line? We look upon this time as a similar one to1972, andsuggest that you consider this point of view as well. Complaining isnegative,while thinking, preparing and looking to succeed are all positive andworthwhileendeavors. It's all about how you look at things. Meanwhile, we trade.
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