Stocks resembled 5 miles of bad road on heavy trading volume as interest rates creep higher on the back of a strengthening economy. The Dow went back down into a dark hole, like Punxsutawney Phil after he sees his shadow, losing 665 points and closing at 25,520.
The January labor report came in better than expected with 200,000 jobs being created versus expectations calling for an increase of 180k. The biggest job gains came in manufacturing and construction. The unemployment rate held steady at 4.1% thanks in part due to an increase in the labor force participation rate of 518,000 workers. The big news contained in the data was the increase in wages which jumped 2.9% year over year marking the fastest growth in 9 years. The big difference between then and now however was back then the wage growth rate was decelerating and today it is accelerating which bodes well for the future.
Amazon reported Q4 numbers last night. Revenues were up 38% to $60.5 billion while net income came in with a 40% increase at $1.9 billion. The company took a charge of $789 million related to the tax reform act. Prime members shipped over 5 billion items and CEO Jeff Bezos sounded an excited note regarding Alexa saying that the optimistic projections they had for this segment were exceeded by a wide margin. It’s all about Alexa as more and more services and programing features are being added to the platform similar to how apps made the Apple IPhone into a veritable Swiss army knife.
Apple also reported its best quarter ever with a 13% revenue gain and a 16% jump in profits. Google reported a 24% increase in sales and an 28% rise in pecuniary emoluments. These numbers however did not meet guru expectations and shares fell hard as a result.