Smart Investing with Brent & Chase Wilsey
Business:Investing
March Jobs Report
I must say, I was very surprised by the strength in the March Jobs Report. Nonfarm payrolls increased 303,000 in the month, which easily topped the estimate of 200,000. Unlike prior reports, there wasn’t a major change to the previous months as February saw a negative revision of just 5,000 and January’s revision brought the total up by 27,000. There were many positives in the report considering the unemployment rate ticked lower to 3.8%, the labor force participation rate actually increased 0.2 percentage points to 62.7%, and average hourly earnings increased 4.1% which was lower than last month’s reading of 4.3%. Areas of strength in the economy included health care and social assistance (+81,300), government (+71,000), leisure and hospitality (+49,000), and construction (+39,000). According the BLS, the leisure and hospitality sector is finally now back to its pre-pandemic level. If the economy and labor market continue to remain resilient, I do worry we may not see those three interest rate cuts we have been expecting during the remainder of the year.
JOLTs
In the Job Openings and Labor Turnover Survey (JOLTs) it showed there were 8.8 million job openings in February, which pretty much matched expectations and last month’s reading. The job market has continued to remain resilient and I do believe that it will need to enter a Goldilocks period where it is not too hot or too cold. Too many job openings may deter the Fed from considering rate cuts and obviously we do not want a weak labor market as that would be bad for the economy.
Stock Market
The stock market has gotten off to a strong start and in the first quarter the S&P 500 was up 10.2%, which marked the best first quarter performance since 2019. The Dow and Nasdaq also had good quarters as they were respectively up 5.6% and 9.1% in Q1. In a recent study, it was pointed that of the 16 times the S&P 500 rose 8% or more in the first quarter from 1950 through 2023, only once (1987) did the index lose ground the rest of the year. In the remaining years, the index gained an average of 9.7% over the next three quarters. In 10 of the 15 years the first quarter’s gains were higher than those seen over the remainder of the year. While this is bullish for the remainder of the year, I do worry about the concentration of the market. With Nvidia’s strong start and large market cap it accounted for close to half of the entire gain for the index. I don’t believe this will be able to continue, but I am optimistic that the rally could continue to broaden which would be beneficial to other stocks.
Office Rents
Across the country office rents are holding firm and they are higher now than they were back in the fourth quarter of 2019. The average US office rent has an asking price of $35.24 per square foot. This is an increase from $34.92 per square foot in 2019. It is not a high increase, but compared to a lot of the negativity that the media is spreading, it shows office rents as a whole are still doing OK. I would recommend for investors looking into office real estate to really do their due diligence to make sure they are not buying or investing in a declining property.
Stocks Discussed: Visa (V), Tesla (TSLA), Disney (DIS) and McCormack (MKC)
January 13, 2024 | Inflation Numbers, PPI, REITs, Bitcoin ETF and Social Security Spousal Benefits
January 6, 2024 | Jobs Report, JOLTs, Dividends & Buybacks, Federal Debt and Structuring Income for 2024
December 29, 2023 | Santa Claus Rally, Cryptocurrencies, Banks and the Magnificent Seven
December 16, 2023 | CPI, Government Debt, Apple, Accident Repair, Season of Giving
December 9, 2023 | Employment, JOLTs Report, Drug Companies, Magnificent Seven and Reviewing Income
December 2, 2023 | Annual Home Sales, Delinquencies, Core PCE and the Real Estate Market
November 18, 2023 | PPI, CPI Report, ETF Investors, PEG Ratio and Tax Loss Harvesting
November 11, 2023 | PC Sales, Commercial Real Estate, Growth Companies and 2024 Tax & Retirement Changes
November 4, 2023 | Employment, Labor Market, Federal Reserve Survey, Interest Rates and Adjustable-Rate Mortgage Demand Spikes
October 28, 2023 | Investing Volatility, PCE, Recession and Annuity Sales Continue to Grow
October 14, 2023 | CPI, Stock Market Volatility and Treasury Yields
October 7, 2023 | Jobs Report, JOLTs Report, Oil Prices, Investment Returns and Social Security
September 30, 2023 | Food Stocks, Portfolio, Automobile Strike, Gold and Social Security & Medicare Changes
September 23, 2023 | US Advantages, Snacking in the US, Stock Market and Premium Financed Life Insurance
September 9, 2023 | UAW Strike, Government Shut Down, Apple in China, Credit Cards and Student Loan Payments Starting Soon
September 2, 2023 | Jobs Report, Job Openings, Inflation, Bank Fees, Investing Fluctuations and IRMAA
August 26, 2023 | Home Sales, Durable Goods, Pay Decline and Tax-Gain Harvesting
August 19, 2023 | Real Estate Investment Trust, Sales, Barbie Movie and are your I Bonds Worth Keeping?
August 12, 2023 | United Auto Workers, Gold, CPI, PPI and Don’t be too Tempted by High Savings Yields
August 5, 2023 | Jobs Report, Job Openings, Shopping Malls, Trucking Company and Reviewing our Home and Auto Insurance
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