Stocks closed out the week with gains as the Dow came within a whisper of 20,000. Tech stocks were the leaders with Facebook and Amazon moving higher. At the close the Dow stood at 19,964 up 64 points. For the week the Dow gained about a half percent. IBD has markets in rally mode but analysts are talking about “policy risk” as a new administration gets ready to move into the head shed aka White House.
The December jobs report came out today and it contained both good and bad data points. The bad was a low labor force participation rate and missed expectations for actual jobs created. The good was rising wages. The unemployment rate rose 0.1% to 4.7% and 156,000 new jobs were created versus expectations calling for 178,000 new jobs. The labor force participation rate held steady at 62.7% but the gurus are concerned that labor force participation by workers between ages 25 and 54, which is considered USDA prime working age, is declining. Maybe it’s the Uber/Airbnb affect which changes how people work. Average wages were up 2.75%.
Restaurant stocks fell today as companies in the sector began to announce lower earnings estimates due to slow traffic and rising labor costs offsetting food deflation. Seattle restaurant guru Tom Douglas, in an interview with the PSBJ, noted that while 400 restaurants opened in Seattle last year the challenges are razor thin margins and how to offer a quality meal in a city where costs are rising, competition is stiff and growth curves have been replaced by steady traffic trends. Maybe the answer is food drones operated by Amazon. This could work great for Stephen Ezell’s wonderful restaurant Heaven Sent Chicken except he might change the name to “Drone Sent Chicken”.
WTI crude oil held steady at $53.99 for the week. Traders are watching for signs of OPEC cheating and the US rig count continues to creep higher standing now at 529. The oil gurus are calling for the back end of 2017 to be good for energy producers.