What Ever Happened to Farm Payrolls?
Nonfarm payrolls came out this morning and the tally is 164,000 new private sector jobs. Consensus estimates were 192,000, but still, the official unemployment rate fell to 3.9%, the lowest rate since December 2000, two months before the 2001 recession began. Futures are down either despite or because of the news, depending on how you want to narrate the events of the day. They could be down on the news because low unemployment means higher wage pressures which means higher inflation which means faster rate hikes which can bring down equities. They are down despite the news because a strong employment report should bring stocks up because the more people that are employed, the more people can afford to invest in equities. The S&P 500 (NYSEARCA:SPY) is down a quarter percent in the premarket.
Bitcoin Nears $10,000 Again
The cryptocurrency complex is up again today, crossing the $450B mark in total market cap. Bitcoin (BTC) nears $10,000 again and runner up Ethereum (ETH) is closing in on $800 a coin. See Goldman Sachs To Set Up First Bitcoin Trading Desk.
Trump Tariffs Already Taking a Bite out of Small Business
Reuters reports that small businesses reliant on cheap steel in the US are already feeling the bite of steel tariffs enforced by the Trump Administration. A tariff is like a blockade, except it is only partial and it is self-imposed rather than directed against other countries. So one could imagine why a tariff would hurt small businesses more than big businesses. Big businesses can afford the price increases due to tariffs because they have the economies of scale to handle it, whereas small businesses do not. At least US steel companies like aptly named United States Steel Corporation (NYSE:X) and AK Steel Holding (NYSE:AKS) are enjoying the help, which makes America great again (except for the small businesses that are hurting) according to Peter Navarro, US Director of Trade and Industrial Policy.
Amazon Challenges Seattle To Duel For Charging $100,000 a day to Employ People
According to USA Today, Amazon.com Inc. (NASDAQ:AMZN) is none too happy with Seattle’s City Council, which wants to charge businesses with over $20 million in annual sales (Amazon fits the bill) 26 cents per worker per day for the stated purpose of making housing more affordable. By that, the City Council means that they want to spend more money on housing in order to subsidize it, which makes housing more expensive because more money is being poured into it instead of less. Seattle wants to get this money by taxing Amazon among other companies, and Amazon is now threatening to ditch plans for a 17-story building in the city because they don’t want to pay the tax.
The total annual bill for Amazon for a whole year, given that Amazon employs about 45,000 full time workers in Seattle, would be $0.26 X 8 X 45,000 X 260 = $24,336,000, minus vacation time and holidays. Drew Herdener, Vice President at Amazon, is also not happy about this.
“I can confirm that pending the outcome of the head tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sub-lease all space in our recently leased Rainer Square building,” he said.
Wonder What Nikola Tesla Would Think About This?
Anheuser-Busch InBev SA/NV (NYSE:BUD) said Thursday that it has ordered 800 hydrogen fuel-cell semis from Tesla (NASDAQ:TSLA) rival Nikola Motor. Both companies are named after Nikola Tesla, a Serbian physicist who turned magnets into engines and helped develop AC power in the 19th century. Now his namesake companies are trying to outdo each other supplying trucks so Budweiser can be transported far and wide without the emission of greenhouse gasses.
The trucks can reportedly travel between 500 and 1,200 miles on one hydrogen fuel tank, depending on how much they are carrying and traffic conditions, among other variables. The trucks will be in service beginning in 2020, and all Anheuser-Busch beer will be transported by renewable fuel by 2025. Whether elemental hydrogen is so renewable remains to be seen though. Despite it being the most abundant element in the universe, it is somewhat hard to find on Earth unbonded to other elements. Fuel cell vehicles emit water vapor as exhaust.
Gold Demand Falling?
The World Gold Council reported that gold demand (NYSEARCA:GLD) fell to its lowest first quarter level since 2008. Total gold bought fell to 973 metric tons versus 1,047 in Q1 2017. The question is, Is this number gold demand per se, or rather physical gold trading volume? Gold prices in Q1 2017 were between $1,146 and $1,265 per ounce, lower than they are now. Gold trading volume may have fallen since Q1 2017, though it looks like demand has risen at least among those who actually bought the 973 metric tons, since the price clearly has.