To market to market to buy a fat pig. Friday was jobs day in the US, even though there was less excitement around their release because of the expected 'noise' in the numbers from the two hurricanes. The expectation was for their economy to add 80 000 jobs. Instead, for the first time since 2010 the economy shed jobs. The number for September was a shedding of 33 000 jobs, very heavily impacted by the hurricanes. The leisure and hospitality sector lost 111 000 jobs.
Less impacted by the hurricanes was the unemployment rate which dropped to 4.2%, the lowest since 2001. What made the drop in unemployment more impressive was that it occurred with a simultaneous rise in the labour-force participation rate, from 62.9% to 63.1%. Many would argue that the US economy is near full employment now, even though the unemployment rate isn't 0%. If someone leaves a job and hasn't started their new job yet or if they have a job offer but they are holding out for better terms, they are still considered unemployed.
With full employment generally comes a situation where there are more jobs than there are people. Back to supply and demand, there is a shortage of labour which then pushes up the price of labour. Average hourly earnings increased by 2.9% year over year, which is a strong number. All these numbers can and will be revised in future periods, when the US Labor department collects more information.
Market Scorecard. US markets were flat on Friday, with the Nasdaq finishing at another all-time high. The Dow was down 0.01%, the S&P 500 was down 0.11%, the Nasdaq was up 0.07% and the All-share was up 0.41%. Our market is now also at all-time highs, matching US markets. Friday's green close marks the sixth day in a row of gains for the All-share, which is now up 13% for the year.
It is great to see the gains. If you had been invested in an index tracker from the start of 2014 to the start of 2017, your investment would not have kept up with inflation. That is markets though, there are periods where they go nowhere and the trick is to remain patient and add continually. What is amazing is that despite these periods of zero growth and periods of negative growth, the annual average return of markets is still well above inflation. The trick is to be patient until the good years roll around. As Buffett says:
"The stock market is a device for transferring money from the impatient to the patient."
Linkfest, lap it up
One thing, from Paul
This week on Blunders: Some people are a natural disaster, FDA says love is not a food ingredient, Golden Week chaos in China, and tiny company "pivots" to cryptocurrency - Blunders - Episode 75
Byron's Beats
Much has been made of the Tesla Model 3 missing production expectations. Production bottlenecks was the primary excuse. Apparently some parts of the vehicle were still being made by hand. Elon musk posted this cool video on his Instagram feed of a model 3 being produced by robots. Looks pretty sci-fi! - Elon Musk posted a video of the Tesla Model 3 assembly line.
Michael's Musings
I think this headline sums up the tech industry pretty well - Facebook is spending $1 billion for a building that basically no one will work in. Building server farms is the most capital intensive part of tech companies nowadays, when you are an early start up you can rent the server space from the likes of Amazon, so you don't need much starting capital.
Due to deforestation, the decomposition of dead trees is emitting more CO2 into the atmosphere than the existing forests are able to absorb - The world's tropical forests now emit more CO2 than all US cars and trucks combined.
Home again, home again, jiggety-jog. Chinese markets are open after being closed all of last week, no surprise that they are in the green, playing catch up with global markets. US markets will be rather quiet today, as it is Columbus day, with many financial institutions closed. Then more exciting for me, the Nobel prize in Economics is announced.
Sent to you by Team Vestact.
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