What's moving markets today: April 5, 2019
President Donald Trump on Friday blasted the Federal Reserve for undermining the US economy.
“They really slowed us,” Trump told reporters. “I personally think the Fed should drop rates.”
Trump argued that if the Fed cut interest rates “you would see a rocket ship.” But even so “we’re doing very well.”
Trump hasn’t been shy about criticizing the Fed, once calling them “crazy” and “loco” for raising rates four times last year.
The fresh comment come as the President has floated the possibility of naming Stephen Moore, a former campaign adviser and distinguished fellow at the conservative Heritage Foundation and Herman Cain, a former pizza executive who dropped his bid for the 2012 Republican presidential amid sexual harassment allegations.
Since the start of his presidency, Trump has moved to reshape the world's most powerful central bank, already appointing four people to the seven-member Fed Board so far. That includes Chairman Jerome Powell, a former investment banker, who the President has repeatedly accused of trying to undercut him politically by raising interest rates, which Trump believes will slow down the economy.
Those criticisms have continued despite the Fed doing two things Trump has asked for: pumping the breaks on further rate hikes and halting plans to shrink the balance sheet.
The US economy added 196,000 jobs in March and now the new 12-month average of jobs created is 211,000:
Wall Street is pleased with America's rebounding jobs growth.
The Dow climbed as much as 100 points on Friday morning as investors cheered a solid US jobs report. The index was recently up about 60 points.
Markets extended their gains after the release of the nonfarm payrolls report, which showed the United States added 196,000 jobs in March. Wage growth decelerated, easing concerns about inflation.
Boston Beer Company (SAM), the owner of Sam Adams, dropped 5% after Goldman Sachs urged clients to sell the stock due to competition facing its Angry Orchard and Twisted Tea brands.
Shares of Boston Beer (SAM) slid 5% in early trading following a Goldman Sachs analyst report warning that some of the products it makes, including Samuel Adams beer and Angry Orchard ciders, are falling out of favor.
Goldman downgraded the brewer's stock to a sell because drinkers now prefer trendier beverages, like spiked seltzer and canned pre-made cocktails, instead of beer and rosé cider.
Here's the worrying statement from the report about rosé cider:
Angry Orchard’s growth in the past year was almost entirely driven by Rose Cider. After a surge in growth in the summer, Rosé's contribution to brand growth began to level off into the winter before falling dramatically in 1Q19. We view the initial success as more 'faddish' in nature, especially given that velocity is down over 30% in each of the last two months."
The US economy added 196,000 jobs in March. Here's what analysts are saying:
Peter Boockvar, chief investment officer at Bleakley Advisory Group:
Bottom line, as stated, most of the modest upside surprise came from more government hiring. Private sector hiring was a touch better than forecasted and wage growth is not accelerating"
Joel Kan, associate vice president of Economic and Industry at Mortgage Bankers Association:
We saw a bounce back in construction employment last month, with a decent gain of 16,000 jobs. These developments, along with lower mortgage rates and easing price growth, lay the foundation for steady housing demand as we move further into the spring home buying season."
Lawrence Yun, chief economist at National Association of Realtors:
The job market is quite remarkable as more job creations and wage gains are adding to the pent-up demand for housing. The many new job holders are seeking the starter home, but unfortunately, there is a grossly inadequate supply of moderately priced homes."
Josh Bivens, director of research at the Economic Policy Institute:
Those of us anxious about signs of slowing in the US economy can rest a bit easier today, as this is a good indication that February’s extraordinarily weak job growth number was an outlier."
- The US economy added 196,000 jobs in March, which is slightly above expectations.
- The unemployment rate remained at a low 3.8%.
- The Bureau of Labor Statistics said "notable job gains occurred in health care and in professional and technical services."
- Here's an observation about hourly earnings, from our Paul R. La Monica:
JPMorgan (JPM) CEO Jamie Dimon said both Stephen Moore and Herman Cain don’t seem “to be the right people to put on the Fed.”
Speaking at the Council of Foreign Relations on Thursday, Dimon admitted that he doesn't know Moore and Cain very well. "I know them from seeing them on TV," said Dimon. "I never sat down and had a long conversation."
I do think Jay Powell is very bright. I think the Fed people — I don’t agree with everything they’ve ever done — but I think they’re the right people trying to do the right stuff," Dimon said.
When asked who should be nominated to the Fed, Dimon said that they should put professional people there.
“I think those jobs all have to go through confirmation. Let the Senators do their homework” Dimon said. (Read Mellody Hobson and Jamie Dimon in CNN Business Perspectives: "Black Americans are still worse off financially. Businesses can help.")
Cain is a former pizza executive who dropped his bid for the 2012 Republican presidential nomination amid sexual harassment allegations. From 1992 to 1996, he served as a director of the Federal Reserve Bank of Kansas City.
Moore has echoed President Donald Trump and his advisers, calling for an emergency rate cut. Most economists believe that would spell disaster. The US economy is in full swing, and a boost of unnecessary stimulus could panic the markets.
Dimon's statement against Trump's Fed picks contrasts with his praise for the Trump administration's economic stimulus policy. Dimon on Thursday said the recent tax cuts added $3.7 billion to JPMorgan's bottom line last year.
It's been a weird few months for US jobs. March could get us back to normal.
After reaching a stratospheric high and a dismal low so far in 2018, here's the question for Friday's March jobs report: Which version of the labor market is closer to reality, January's 311,000 jobs or February's 20,000?
Economists are expecting that it's somewhere in the middle.
Those polled by Refinitiv estimate that employers added 180,000 jobs last month, which would be only slightly below the average for the year.
They think the unemployment rate will remain steady at 3.8%, and that wages will again rise by 3.4% from the same time last year.
Global demand for smartphones is cooling, and Samsung is feeling it.
The South Korean company — the world's biggest seller of smartphones — said it expects operating profit for the first quarter to plunge by 60% compared to the same period year ago.
Samsung (SSNLF) warned last week that its earnings would be hit by slowing demand for memory chips and display panels, a sign that device makers and their suppliers are coming under pressure.
The company estimates that operating profit for the first three months of 2019 will total 6.2 trillion Korean won ($5.4 billion), lower than analysts' already downbeat expectations.
It expects a sales decline of roughly 14% when full earnings are published later in April.
Samsung's stock was little changed in Seoul trading afterward, as investors had largely predicted the earnings slump.