Private Client Group

January 13th, 2023

Labor Market Stays Resilient, Oil and Gas Boom, U.S. Trade Weakens

Share
Subscribe

In today’s Steady Investor, we are taking a deeper dive into key factors that we believe are impacting the market and what’s to come this year, such as:

December Jobs Report Underscores Resilience in U.S. Labor Market – The U.S. Labor Department reported that 223,000 nonfarm jobs were added in December, making 2022 the second-best year for job growth in recorded history (2021 was the best year). The three-month average of job growth is 247,000, putting December on trend and underscoring the ongoing resilience of the labor market. The unemployment rate fell to 3.5%. Another bright spot in the report was that wage growth continued to slow, which came as a relief to markets given the Federal Reserve’s focus on the effect that higher wages are having on services inflation. Average hourly earnings grew by 0.3% from November to December, and 4.6% year-over-year. Both of these data points mark improvements from previous month-to-month and year-over-year readings, which give further hope that a peak in wages may be in the rearview mirror. According to economists at the job-search website Indeed, posted wages were up 6.3% in December, which is of course higher than Labor Department estimates. The good news, however, is that Indeed’s figures are an improvement from November’s 6.5% increase and the apparent March 2022 peak of 9%. While job growth remains steady, it is worth noting that layoffs are starting to creep higher in certain segments of the market, namely in technology and other white-collar sub-industries, like real estate. The question for labor markets in the next few months is whether these layoffs spread to blue-collar industries where job growth has otherwise been strong and where job openings remain relatively high. In our view, there is still slack in the labor market where job openings can fall and the unemployment rate can remain relatively steady, easing wage pressures in the process.1

___________________________________________________________________________

8 of the Biggest Financial Mistakes You Should Avoid

Factors, such as possible economic slowdown and changes in the labor market prove how volatile the market currently is. Many investors, especially those who are trying to plan for retirement, may be wondering how to prepare for what’s to come. With the current state of the market being volatile, there is no definite answer. However, we believe that it’s better to prepare for any given financial situation.
 
While there are many unknowns at present, we believe there are eight common mistakes that many investors make when planning for retirement. In our guide, 8 Retirement Mistakes to Avoid, we outline these mistakes and how you can potentially avoid them.
 
If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy:
 
Learn About the 8 Retirement Mistakes to Avoid!2

___________________________________________________________________________

What’s Behind the Unexpected Oil and Gas Boom? Investors and traders were worried last year that the ongoing Russian invasion of Ukraine – and efforts by western countries to stem the flow of Russian oil globally via bans and price caps – would lead to a sustained surge in oil and gas prices. For a time last summer, that’s what happened, with the price of natural gas rising to $9 per million British thermal units and crude oil jumping past $100 a barrel. The high prices didn’t last. Higher prices predictably spurred producers back into action, and the prospect that Russian oil and gas exports would be limited in the future had many producers eager to gain new market share up for grabs. U.S. production of natural gas has now eclipsed record levels, as have exports, while domestic crude oil production is also hovering around peaks. Prices have responded to increased production in kind, with natural gas back down to around $4 per million British thermal units and the price of a barrel of crude trading around $80. The surge in production looks different than the last fracking-driven boom circa 2015, when companies were loading up on debt and overinvesting in rapid-fire growth. Now producers are being more cautious about capital expenditures and disbursing more money to shareholders via dividends.3

U.S. Trade Weakens Ahead of a Possible Economic Slowdown – Many market watchers tend to focus on whether the U.S. is running trade surpluses or deficits with the rest of the world, but the real metric to keep an eye on is total trade, in our view. Rising trade volumes in aggregate signal growing global demand, regardless of whether the U.S. trade deficit is growing or shrinking. On the flip side, if total trade is falling then it likely means that global demand for goods and services is falling too, generally a harbinger of economic weakness or even recession. In November, U.S. exports fell by 2%, while imports dropped by even more (6.4%), signaling that global demand for goods and services hit a soft patch. More data is needed to confirm the trend, however, as seasonal forces could also be in play and the effect of “zero-Covid” lockdowns took its toll. China has since ended these restrictive policies, which could result in a trading rebound in the coming months.4

Working on Your Retirement Plan? Here Are 8 Mistakes to Avoid – While we can’t predict or control the future of the market, it is possible to stay focused on actions that can help guide your future investments. There are common mistakes and habits that we believe can help some investors succeed while others fail. Don’t fall prey to common investing mistakes.

To help you understand some of these mistakes and how to avoid them, we have created the guide, 8 Retirement Mistakes to Avoid.5

In this guide, we provide our thoughts on what we believe are 8 of the biggest retirement mistakes investors should avoid. If you have $500,000 or more to invest and want to learn more, click on the link below

Disclosure

1 Wall Street Journal. January 8, 2023. https://www.wsj.com/articles/as-white-collar-layoffs-rise-blue-collar-resilience-faces-test-in-2023-11673132989?mod=djemRTE_h

2 ZIM may amend or rescind the free guide “8 of the biggest retirement mistakes investors should avoid” for any reason and at ZIM’s discretion.

3 Wall Street Journal. January 10, 2023. https://www.wsj.com/articles/oil-and-gas-are-back-and-booming-11673363006?mod=djem10point

4 Wall Street Journal. January 5, 2023. https://www.wsj.com/articles/u-s-trade-deficit-narrowed-sharply-in-november-as-global-demand-cooled-11672926977?mod=economy_more_pos7

5 ZIM may amend or rescind the free guide “8 of the biggest retirement mistakes investors should avoid” for any reason and at ZIM’s discretion.


DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.
READ PREVIOUS
Can the U.S. Avoid a Recession in 2023?
READ NEXT
How to Think About Inflation

Explore Zack’s Archives

View
Mitch's Mailbox
April 24th, 2024
What A Strong Dollar Means For The Markets And Economy
Read more
Private Client Group
April 22nd, 2024
Fed Rate Cut Retreat, Pension Funds Pull Billions From Market, High Oil Prices
Read more
Mitch on the Markets
April 22nd, 2024
How Badly Are Rate Cuts Needed In This Bull Market?
Read more
Mitch's Mailbox
April 17th, 2024
Apple’s Antitrust Lawsuit And The Regulation Of Tech
Read more
Private Client Group
April 16th, 2024
Inflation Nears Fed target, Services Sector Expands In March, Signs Of Housing Recovery
Read more
Mitch on the Markets
April 15th, 2024
Oil Prices Are Rising Fast—Should Investors Be Worried?
Read more

Daily financial tips directly
from the Zacks family.

Top

Search

Contact

I'm a Private Client I'm a Financial Professional