By Musabbir Mazhar
The US Jobs number came out last Friday (10th Jan) at 74,000 job additions for December which has been taken by the markets as a shocker and the US 10 year treasury yields went down on the news. But more sense should be put into this- Workers weren’t looking for work for almost a week due to holiday season and there was bad weather condition – a proof of that is the fact that construction jobs were low. You have to look beyond just one number – The jobs number has been improving for the last four months – with the last month at 241,000 after adjustment.
Another shocker was that the unemployment rate dropped to 6.7% from 7% in december – the reality is that about 347,000 people left the labor force. The labor participation rate fell to 62.8% which is a 35 year low.
Janet Yellen takes over as the Fed Chairwoman after jan 28th meeting.
The ISM Manufacturing data were low for december but again – the ISM data has been on a rise for the last 6 months.
US Retail sales rose 0.2% & core retail sales rose a good 0.7% for december.
US housing starts for november was 1.09 Million which was a 22.7% rise for 2013 and the US housing prices rose 13% in 2013 – I see the US housing prices rising about above 6% in 2014.
US posted a record trade surplus of $53.2 Billion for december – compared to 1.12 billion of deficit one year ago.
I see that the Fed would continue to taper and increase the rate of taper in the coming FOMC meeting.
Canada posted 46,000 job losses against expectation of a 14000 job additions for december. The CAD Dollar took a downward hit due to this – the USD/CAD was trading at 1.09 – I look at the CAD dollar depreciating and the USD/CAD going to 1.14 in 2014. Again, there was a Trade deficit of 0.9 Billion for december – 9x more than expected.
The S&P/TSX index was at 13,831 – it has risen 9.6% in 2013 and I see it rising less than that in 2014 0r around a 5% rise since materials sector would be under pressure.
The S&P 500 was at 1,842 – the index rose 29% in 2013 – I see the the index still going up in 2014 – 20% up at the end of the year at 18x earnings.
WTI is at 94 USD/bbl – Brent is at 105.68 USD/bbl after taking a sharp fall from 107 on last trading day. I see the oil prices going much lower than this – WTI at 88 usd/bbl – and Brent at 102 usd/bbl if not less at end of year. This can be expected since World oil supplies are expected to increase with US Shale reserves booming – increased oil supplies in Iraq, Libya and Iran should cause downward price pressure.
Gold is trading at 1,241 – I see the gold prices falling further in the year as I see the dollar appreciating and investors would not find a ‘safe haven’ in gold now.
I$ Investing Street 
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