Good morning. The latest data shows that wages are rising. That's good. However, they're not...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.
 | | |  Good morning. The latest data shows that wages are rising. That's good. However, they're not rising faster than inflation. So even with 5 percent wage growth, 8 percent inflation is resulting in a 3 percent loss of purchasing power. That trend is also showing up with the savings rate. It soared during the pandemic amid lockdowns, uncertainty, and stimulus checks. But it's now trending back near record lows.
If consumers have to keep eating into savings to maintain their lifestyles now, when the savings run out, expect a drop in spending. With consumer spending being a massive percentage of the economy – about 70 percent – any major decline will likely lead to a full-blown recession, rather than the technical one we saw in the first two quarters of the year.
That will impact some stocks more than others. And markets can rise in recessions, since the market tends to be forward looking. For now, traders should be cautious, and look to get more optimistic about stocks after monetary policy stops tightening.
Now here's the rest of the news: | | | | | |
| | |  | DOW 32,861.80 | +2.59% | | | | | S&P 3,901.06 | +2.46% | | | | | NASDAQ 11,102.45 | +2.87% | | | | | *As of market close | | | • | Stocks jumped higher on Friday, following an earnings beat from Apple (AAPL). | | | • | Oil dipped 1.0 percent, closing at $88.21 per barrel. | | | • | Gold slid 1.1 percent, last going for about $1,648 per ounce. | | | • | Cryptocurrencies generally rallied, with Bitcoin at $20,642 at the stock market close. | | | | | | | |
| | | Pick Up This Financial Leader Amid the Latest Market Fear | | | | Sectors tend to start out with an explosion of activity, then consolidate into a few big names over time. That's played out in everything from automakers to the media. As this happens, surviving companies tend to settle into making steady profits.
And when there are just a handful of players, one will typically stand out as the industry leader. This company will fare slightly better than its peers for various reasons.
» FULL STORY | | | | |
| | Insider Trading Report: Riley Exploration Permian (REPX) | | | | Alvin Libin, a major owner at Riley Exploration Permian (REPX), recently added 23,755 shares. The buy increased his stake by 1.2 percent, and came to a total cost just over $641,000.
That's just one of five buys made by the insider in the past few weeks. Other buys have been in the 5,377 to 9,593 share range. In total, this insider has bought over $1.2 million in shares in the past few weeks. In the past three years, insider buying has handily beat insider selling.
» FULL STORY | | | | |
| | Unusual Options Activity: Cleveland-Cliffs Inc (CLF) | | | | Shares of iron ore producer Cleveland-Cliffs (CLF) have lost 40 percent of their value in the past year, more than double the drop in the S&P 500. One trader sees a further decline ahead.
That's based on the March 2023 $9 puts. With 137 days until expiration, 6,374 contracts traded compared to a prior open interest of 117, for a 54-fold rise in trading volume. The buyer of the puts paid $0.41 to get in.
» FULL STORY | | | | |
| | • | PCE Inflation Rises Higher Than Expected
Personal Consumption Expenditures rose at a 5.1 percent annualized rate for September. That's a bit higher than the 4.9 percent read for August. This measure of inflation covers core prices such as food and healthcare items. The rise is the highest rate since March. | | | | • | Wages Rose 5 Percent in the Third Quarter
For the third quarter of 2022, wages rose 5 percent on average, as measured by the employment-cost index. That was a slightly slower pace than in the second quarter. On average, wages have been rising faster since the pandemic, but haven't quite kept up with current inflation levels. | | | | • | Pending Home Sales Dropped 10 Percent
Pending home sales dropped 10 percent in September, far exceeding expectations for a 4 percent drop. Compared to a year ago, sales are down 31 percent. Home sales have declined as mortgage rates have continued to rise, and the home sales index is now at its lowest level since June 2010. | | | | • | Ford Ending Fiesta Line
Ford Motors (F) is ending is Fiesta line of hatchback cars. The car appeared in the US for about 10 years, but has been popular in Europe since its introduction in 1976. 22 million of the cars have been produced globally, with over 15 different factories in Europe, Asia, and Latin America producing the popular vehicle. | | | | • | Musk Lays Off Twitter Executives
After closing the deal to buy Twitter (TWTR), Elon Musk has been busy. Among other things, the company's senior executives, including the CEO and CFO have been let go. The New York Stock Exchange will delist the company permanently on November 8th. | | |
| | | | TOP | | | DXCM | 19.378% | | | | GILD | 12.92% | | | | INTC | 10.659% | | | | VRSN | 9.462% | | | | VRTX | 9.031% | | | | BOTTOM | | | DVA | 27.09% | | | | EW | 17.88% | | | | BIO | 7.979% | | | | AMZN | 6.804% | | | | RMD | 5.838% | | | | |
| | |  | | In September, we got a very widespread oversold rating, and that happens multiple times usually in bear market cycles, and sometimes you get a muted reaction. This time we saw enough improvement in our short-term momentum gauges to suggest we have a relief rally in store that could even rival the relief rally that we saw over the summer months. | | - Katie Stockton, founder of Fairlead Strategies, on why the market may see a strong rally in the weeks ahead given how oversold the market got going into earnings season. | |
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