It is all about jobs today, as the market digests this morning's
significantly better-than-expected January jobs report. Not only do
we have an impressive headline number, but the internals of the
report speak of broad strength and an accelerating trend. Needless
to say that the market will cheer today's report.
The Bureau of Labor Statistics reported better-than-expected
non-farm payroll numbers for January of 243K, compared to
expectations in the 130K to 150K range. The tallies for December
and November were revised upwards, belying expectations that last
month's strength was due to one-off seasonal factors.
The unemployment rate dropped again - to 8.3% from 8.5% in
December. Average hourly earnings and the average workweek both
ticked up, rounding out an overall very positive labor market
report.
The expectation for a deceleration in the January
number reflected the reversal of some seasonal factors that
had supposedly boosted the December gains. Instead, we not only an
accelerating jobs trend in January, but the very strong December
number was revised upwards. This is consistent with all the major
labor market indicators that have been showing an improving trend.
Initial Jobless Claims have been steadily coming down.
The employment component of the manufacturing ISM survey was less
favorable in January compared to the preceding month, but was
nevertheless indicating jobs gains. Importantly, we have
consistently been seeing greater improvements in the Household
survey than in the Establishment survey over the last three to four
months, indicating that the official jobs numbers are understating
actual labor market gains. This shows to me that we are in the
midst of a fairly stable improving labor market trend.
In this morning's earnings results, we got an EPS and revenue beat
from
Tyson Foods
(
TSN
) on the back of strength in the meat processor's chicken business.
Weyerhaeuser
(
WY
), the real estate and lumber company, also beat earnings
expectations on roughly in-line revenue.
American Axle
(
AXL
) beat on EPS, but missed on revenue.
Estee Lauder
(
EL
) provided a lower earnings guidance, citing increasing marketing
outlays due to new product launches.
After the close on Thursday,
Sunoco
(
SUN
) confirmed its corporate restructuring plans that will result in
the company shedding its remaining refining assets and holding on
to only its midstream logistics (the
Sunoco Logistics
, or
SXL
, stake) and marketing business. The company also announced a
leadership change, a 33% boost to quarterly dividend, stock
buybacks totaling about 20% of the company's market cap, and debt
repayments and other liabilities. This is a significant
shareholder-friendly initiative that will bring down the company's
risk profile.
AMER AXLE & MFG (
AXL
): Free Stock Analysis Report
ESTEE LAUDER (
EL
): Free Stock Analysis Report
SUNOCO INC (
SUN
): Free Stock Analysis Report
SUNOCO LOGISTIC (
SXL
): Free Stock Analysis Report
TYSON FOODS A (
TSN
): Free Stock Analysis Report
WEYERHAEUSER CO (WY): Free Stock Analysis
Report
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