Sunday morning, my laptop suddenly died on me. I will be working with a less effective backup and limited resources for about 2 weeks. 
U.S. Job Openings Edged Lower Number of openings in September exceeded the number of unemployed Americans by 1.26 million
Jobs remain plentiful and hiring solid—showing that while the labor market has cooled, it remains a source of strength for the U.S. economy.
The number of unfilled jobs declined to a seasonally adjusted 7.02 million at the end of September, the Labor Department said Tuesday. That was the fewest available jobs in 18 months. But openings still exceeded the number of unemployed Americans—those without work but actively looking—by 1.26 million. Before 2018, openings had never exceeded unemployment in records back to 2000. (…)
Openings, down from 7.39 million a year earlier, have generally declined this year. But hiring held fairly steady in recent months. For September, 5.93 million Americans were hired, up from 5.67 million a year earlier. (…)
Three ways to look at this JOLT report:
- Openings remain well above hires which remain stable at a high level:
- Openings are declining YoY, but not more than in 2017:
- Openings have declined for 3 consecutive quarters, at a 7.2% annualized rate, worse than in 2016. Private sector openings are down at a 9.5% a.r. in the last 9 months (-11.1% a.r. in Q3, -47.9% a.r. in September).
- Openings in Retail Trade rose 1.2M between Q2’17 and Q4’18, accounting for 27% of the increase in total openings. They dropped by 0.8M, 27% since, accounting for 70% of the drop in total openings, this while retail sales were holding well. Either retailers are cutting costs to protect margins or they are sniffing something nasty coming their way.
If you missed October’s Markit U.S. PMI report:
(…) we’re seeing jobs being cut at an increased rate among surveyed companies, with employment falling for a second successive month and to a degree not seen since 2009. Such a weakening of the survey’s employment index will likely feed through to the official jobs numbers as we move toward the end of the year. (…)
Drop in Consumer-Goods Imports Points to Slower U.S. Growth
U.S. imports of goods such as cellphones, toys and apparel fell sharply in September, the latest sign that slowing global growth might be spilling into the domestic economy.
Imports sank 1.7% from August to a seasonally adjusted $258.44 billion, the Commerce Department said Tuesday. The decline was led by a 4.4% drop in imports of consumer goods, followed by a 3.4% fall in imports of vehicles and auto parts. Imports of petroleum products also fell in the month, creating the largest monthly surplus in records going back to 1978. (…)
Tuesday’s report showed imports of goods from China fell 4.9% in September from August to a seasonally adjusted $37.05 billion. (…)
Haver Analytics adds these details:
Imports of goods declined 1.7% (-2.8% y/y) in September as nonpetroleum imports fell 1.9% (-2.1% y/y). Capital goods imports fell 1.9% (-6.0% y/y) and nonauto consumer goods declined 4.4% (-0.0% y/y). Automobile & parts imports fell 3.4% (-1.3% y/y). Industrial materials & supplies imports eased 1.5% (-14.8% y/y).
Crunch time for Tariff Man:
China Insists Trump Give Up His Favorite Trade Weapon—Tariffs
China is setting its price for signing an interim trade deal with the United States: drop the tariffs.
The question is whether President Donald Trump will pay it.
With talks underway over a narrow agreement to defuse the escalating trade war, Beijing has asked the Trump administration to eliminate some of the duties the president has imposed. China also made clear that new tariffs are a nonstarter. (…)
Taoran Notes, a blog affiliated with state-run Economic Daily, on Saturday wrote that canceling all tariffs is one of three main concerns that must be resolved. “Removing all the additional tariffs is a core concern that has not changed and will never change; even if there is a first-phase deal, this core concern should be reflected.” (…)
Euro area remains close to stagnation as new work falls again
The IHS Markit Eurozone PMI® Composite
Output Index improved during October, but
remained close to the crucial 50.0 no-change mark.
The index recorded 50.6, up from 50.1 in
September and slightly better than the earlier flash
reading of 50.2, but still signalling a rate of growth
that was amongst the weakest seen in the past six-and-
a-half years.
There remained a divergence between the
manufacturing and service sectors during October.
Whereas manufacturing firms recorded a ninth
successive month of declining production, service
sector companies indicated further growth, albeit at
the second-weakest rate since January.
At the national level, by registering a second
successive monthly deterioration in private sector
output, Germany remained the only country inside
contraction territory during October.
Elsewhere, Italy, Ireland and Spain all recorded
marginal gains in private sector output compared to
September. However, in the case of Ireland, growth
was the softest in the current 89-month sequence,
whilst Spain registered its weakest rise in activity
for nearly six years. France was the top-performing nation in October.
Supported by a firmer gain in service sector activity,
plus a return to expansion of manufacturing output,
private sector growth was solid and stronger than
the previous month.Overall growth of the euro area private sector
occurred in spite of a second successive monthly
decline in new work. Weakness was centred on the
manufacturing economy, where another marked fall
in new orders was recorded, whilst there was also a
sharp reduction in foreign demand. Overall exports
were down for a thirteenth successive month, with
the rate of decline amongst the sharpest in the
series history.With activity rising, but new business volumes
down, companies were again able to make inroads
into their overall workloads. Backlogs of work
declined in October for an eighth successive month,
with the rate of contraction little-changed on
September’s near five-year record.Firms were also able to keep on top of their
workloads via another increase in employment.
However, the increase in jobs was marginal and the
weakest in over four years.
Moreover, there were divergent jobs trends at the
country level. France, Ireland, and Italy all
registered stronger gains in employment, but Spain
saw only a marginal rise and Germany recorded a
first drop in payroll numbers for six years.Meanwhile, on the price front, input costs rose at a
slightly faster rate, though inflation remained close
to September’s 37-month low. Output charges
again rose at a relatively subdued pace as a
challenging business climate and competitive
pressures weighed on pricing power.Looking ahead to the coming 12 months, business
confidence remained subdued as political and
economic uncertainties continued to dominate the
outlook. Overall sentiment was down since
September and close to August’s 75-month low.The IHS Markit Eurozone PMI® Services
Business Activity Index indicated a slightly faster
rate of growth during October. However, at 52.2,
compared to September’s 51.6, the index
nonetheless posted the second-lowest reading
since January.A marginal increase in new business volumes was
signalled during October, with growth only slightly
up on September’s eight-month low. Export trade
remained especially weak, declining for a
fourteenth successive month.
There was little evidence of any pressure on
capacity during October as backlogs of work fell for
a third successive month. Companies were able to
keep on top of workloads in part through the
recruitment of additional staff. Employment growth
was, however, unchanged on September’s eight month
low.Operating expenses meanwhile increased at their
sharpest rate for five months amid widespread
reports of higher employment costs. Although
output charges also rose, they did so at a rate that
remained well below that of input prices.Finally, service sector confidence remained well
below par in October, falling to a level only slightly
above August’s near five-year low.
Chris Williamson, Chief Business Economist at IHS
Markit
The euro area remained close to stagnation in
October, with falling order books suggesting that
risks are currently tilted towards contraction in the
fourth quarter. While the October PMI is consistent
with quarterly GDP rising by 0.1%, the forward looking
data points to a possible decline in
economic output in the fourth quarter. (…)
Saudis to Press OPEC Members for Production Cuts Ahead of Aramco IPO The effort is aimed at bolstering oil prices and reminding potential Aramco investors of Saudi Arabia’s considerable sway within OPEC.
EARNINGS WATCH
Actual earnings growth for the 383 companies having reported so far is –0.5% on revenue growth of +3.2%. The beat rate is 75%, the surprise factor +4.5% and the blended growth rate –0.8% (+1.8% ex-Energy), down from +0.3% on July 1
By comparison, after 392 reports during Q2, the beat rate was 74%, the surprise factor +5.9% and the blended growth rate +2.7%, up from +0.3% on July 1. Actual earnings growth for the 392 companies having reported was +3.8% on revenue growth of +3.9%.
Trailing EPS are now $163.72, down from $164.17 at the same time in Q2 and 0.5% lower than the $164.43 and $164.31 at the end of August.and September respectively.
Q4 estimates keep being ratcheted down to +1.0% (+3.2% ex-Energy from +5.0% last week). This is down from +4.1% on Oct.1.
SENTIMENT WATCH
Investors’ Multitrillion Dollar Cash Hoard Could Push Stocks Higher Nervous investors have socked $3.4 trillion away in cash. But stocks are rising and their nerves are calming, leading bulls to view the huge cash pile as a sign that markets have room to go higher.
(…) Analysts at Bank of America Merrill Lynch, meanwhile, see the cash pile as an indication that markets have plenty of room for more gains.
The bank’s proprietary Cash Rule Indicator, which gives a buy signal on stocks when investors’ cash balances are above their long-term averages, has been in bullish territory for the last 20 months. Fund managers polled in the bank’s latest survey said they are holding an average of 5% of their portfolios in cash. That compares with a 10-year average of 4.6%.
“We take it as an incredibly positive sign on a contrarian basis,” said Jared Woodard, investment strategist at the bank.
Hmmm…FYI, the S&P 500 peaked in August 2000 and October 2007:
Via The Daily Shot:
From SentimenTrader:
Uber investors are bracing for the end of a lockup period today that’s expected to flood the market with its shares. RBC estimated roughly 1.7 billion shares will become eligible for sale, while Wedbush said 763 million may hit the market. The company had about 1.7 billion shares outstanding as of Sept. 30, according to Bloomberg data. (Fortune)