U.S. JOLTS: Job Openings Rate Rebounds During December; Hiring Rate Falls Sharply
The Bureau of Labor Statistics reported that on the last business day of December, the total job openings rate rose to 4.5% and reversed November’s decline to an unrevised 4.4%. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. The December figure remained below the 4.8% record in January 2019. The hiring rate fell sharply to 3.9% following five months at 4.2%. The overall layoff and discharge rate eased to 1.3% and reversed some of its November increase to 1.4%. The quits rate rose sharply to 2.3%, the highest level since February and up from a 1.4% low during April. These figures date back to December 2000.
The job openings level rose 1.1% (1.4% y/y) to 6.646 million. (…) the level of hiring declined 6.7% (-6.5% y/y) to 5.539 million. (…)
The glass half-full version says that job openings have increased amid new lockdowns, that they remain some 15% above their 2016-17 level and that hires will bounce back as the economy normalizes.
Brutal Covid-19 Surge in the U.S. Weakens Significantly Newly reported cases and hospitalizations have dropped over the past month, but whether a turning point has been reached isn’t yet clear.
Newly reported cases have dropped 56% over the past month, based on a seven-day average, marking a significantly steeper fall than the U.S. saw after the spring and summer surges. Hospitalizations have declined 38% since Jan 6. The seven-day average of Covid-19 tests returning positive fell over the past week to 6.93%, the lowest since Oct. 31. (…)
But even after such a steep decline, cases and hospitalizations remain higher than during earlier surges, deaths continue to hover near records, and the rise of more contagious coronavirus variants could quickly worsen the spread.
“The concern right now is that while we’re seeing a decline in cases from the holiday surges, as we identify more transmission of the variants within the U.S., this could lead to another surge,” said Saskia Popescu, an assistant professor at the Schar School of Policy and Government at George Mason University. (…)
Officials in some states have responded to case declines by relaxing some restrictions. New York City plans to begin allowing indoor dining with limited capacity on Friday, two days earlier than planned. New York Gov. Andrew Cuomo said Tuesday the state’s seven-day average positivity rate, reflecting tests that show people have Covid-19, had dropped to 4.38%, the lowest level since Dec. 1. (…)
In Massachusetts, restaurants, gyms and other businesses were allowed to bump up indoor capacity to 40%, up from a 25% limit set around Christmas, as cases were spiking, starting Monday. (…)
Variants detected in the U.K., South Africa and Brazil have jolted caseloads in some countries, overwhelming hospitals and leading to fresh restrictions. All three have now been found in the U.S., and the U.K variant is expected to become the dominant strain by March, according to recently posted research from a group of academic and industry scientists. (…)
OECD Leading Indicators Advance The OECD leading indicators rose by a ‘tick’ to 99.7 in January from 99.6 in December. November was 99.4; October was 99.3. Clearly the strengthening trend continues, but it is a very mild and possibly fragile trend.
China Consumer Prices Fall Ahead of Lunar New Year Holiday China’s consumer prices slipped into deflationary territory last month in year-over-year terms, while the country’s factory-gate prices began to reflate after 11 straight months of decline.
China’s producer-price index returned to inflation at the start of the year by rising 0.3% in January from a year earlier, compared with a 0.4% fall year-over-year in December. (…) Chinese producer prices rose 1.0% in January compared with a month earlier, China’s National Bureau of Statistics said Wednesday. (…)
China’s consumer-price index fell 0.3% in January from a year earlier, roughly in line with the expectations of economists polled by The Wall Street Journal. By comparison, consumer prices rose 0.2% year-over-year in December. (…)
Food prices rose 1.6% in January from a year earlier, while nonfood prices declined 0.8%. Prices for services such as airline tickets and tourist sites surged in January last year—just before awareness of the Covid-19 outbreak put an abrupt halt to travel. This year, Chinese government officials have encouraged citizens to cancel travel plans amid a flare-up in coronavirus cases, which has dragged down services prices, statistics bureau officials said. (…)
(Bloomberg)
EARNINGS WATCH
We now have 314 S&P 500 companies in, an 83% beat rate and a +17.4% surprise factor.
Q4 earnings are seen up 2.5% (-10.3% on Jan. 1). Ex-Energy: +6.3%!!
Q1’21 estimates are now +21.2% (+22.6% ex-E).
Trailing EPS are $141.90. Full year 2021: $173.19. 2022: $200.10.
In Europe, 105 STOXX 600 companies have reported with a 72% beat rate and a +25.1% surprise factor (Financials +67.8%!).
Yet, Q4 earnings are still seen down 18.2%. However, Q1’21 is expected to jump 41.0%.
John Authers has a good piece today on Bloomberg. With Deutsche Bank help, he compares recent quarterly earnings growth rate among regions. Europe still looks relatively miserable while EM profits are up spectacularly:
Authers points out that this is the first quarter this century when first day performance following beats on both earnings and sales “have on average endured a fall. They did slightly better than those that disappointed on both, but not by much”.
Also interesting:
Another worrying trend, revealed by research from Morgan Stanley, is that the sectors performing best with investors at present are doing so in spite of their forward earnings estimates, rather than because of them. The consumer discretionary sector, as shown here, is roaring forward, even though forecasts are diminishing relative to the rest of the market:
Per Ed Yardeni’s data, CD stocks are selling at 36x forward EPS:
How about Tech:
Lastly, FYI, also from Ed Yardeni:
And this from Bespoke:
(Bespoke)