The Dow lost a whopping 2 points to close the week at 22,771 on lighter trading volume. For the week the Dow is up 358 points or 1.6% in a breakout move that is leaving cash heavy investors in panic mode.
The September labor report was published today and it was whacky! The gurus had expected the unemployment rate to stay flat at 4.4% with 80k new jobs but the report showed an unemployment rate dropping to 4.2% and a loss of 33,000 jobs thanks to hurricane’s Irma and Harvey where 1.47 million people were unable to get to work. Higher paying Warehouse, transportation, education and healthcare sectors saw the biggest gains while lower paying bars and restaurants saw 107k jobs lost. This shift pushed wages up more than expected to a 2.9% growth rate that most likely could be temporary. Jobs in the manufacturing space grew a tiny 1,000 and gubment jobs were up by 7,000.
Costco (“Costco’s” as my wonderful mother in law called it) reported earnings today and the headlines should read “Costco Beats Estimates. Market beats Costco”. Kirkland based Costco posted 16% increase in revenue and an increase in bottom line profits of 18%. While this is good, market gurus like Jim Cramer expressed worry about the report indicating that Costco is taking the Amazon threat too lightly and that margins could decline as price competition in the grocery space heats up. Shares fell 6%. Costco has a PE of 29 while Amazon has a PE of 249. I wonder if Cramer takes that into account.
There is a big scout trip this weekend. What is amazing is that our troop is getting a couple new kids each week. The word on the street is that if you want your kid to grow up from a lunkhead to a fine young man, Troop 100 can help make that happen through a generous application of misery, challenge and fun. Our co-ed venture crew also is suddenly growing too. This is allowing girls the opportunity to be as miserable as the boys and you know the old saying…misery loves company!