Stocks continue to climb. At the close the Dow rocketed higher by 220 points to 25,295. Trading volume fell a bit. Boeing led the way as shares crested the $300 level.
The December jobs report came in a bit lighter than expected with 148,000 new jobs and an unemployment rate stuck at 4.1%. The report fell short of expectations calling for an increase of 190k new jobs but overall the feeling is that the US labor market is robust and before you go bust you have to be robust!
Many clients are expressing concern over the high level of the stock market and wondering if it is time to go to cash. While the beauty of the market is that no one knows what will happen in terms of volatility, the thing I focus on is the underlying economic situation and corporate earnings. These two items have been showing strength to the upside which in turn supports the current level of equities. Click on our Facebook page for a couple of articles related to economic trends in construction and tech companies starting to repatriate cash. We feel that these are indicators of continued economic strength. The gurus that we follow generally feel 2018 will bring higher wages, full employment, strong corporate earnings, rising interest rates and inflation.
Things are tight in the trucking business. DAT Solutions, a freight market tracking firm reported that the US trucking industry is the most unbalanced it has been since October of 2005. In the face of strong demand for shopping services and truckers, the Feds rolled out new safety regs on Dec. 18th requiring electronic log books or ELBs which caused many independent truckers to go off line while they get the new technology installed. This bottleneck is expected to last however despite truckers getting onboard with the ELB program because demand from construction and manufacturing is expected to continue its rise. The new regs will level the playing field but they will also raise costs and take some decision making away from the driver/operator and place it in the hands of the regulator.