The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, according to a Labor Department report Friday.
Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate.
Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. The monthly gain was 0.2%, below the expected 0.3% increase, bringing the average to $27.77. The average work week also dropped 0.1 hours to 34.4 hours.
Unemployment was last this low in December 1969 when it hit 3.5%. At a time when many economists see a tight labor market, big job growth continues as the economic expansion is just a few months away from being the longest in history.
The unemployment rate for Asians fell sharply, plunging from 3.1% to 2.2%.
While last month's slump in the jobless rate came with strong increase in hiring, it also was helped along by a sharp decline in the labor force of 490,000. That brought the labor force participation rate down to 62.8%, exactly where it was a year ago.
A broader unemployment gauge that includes those who have quit looking for jobs as well as the underemployed held at 7.3%, where it has been since February.
Those counted as not in the labor force surged by 646,000 to a fresh high of 96.2 million.
The level of unemployed people plunged by 387,000 in April, bringing the total level to 5.8 million. However, the ranks of the employed also declined by 103,000, according to the Labor Department's household survey.
Professional and business services led job creation with 76,000 new postions. Construction added 33,000, bringing to 256,000 the total new jobs created in the field over the past year.
Health care rose by 27,000, bringing its 12-month total to 404,000, while financial positions increased by 12,000, rounding out an increase of 111,000 in the 12-month period thanks largely to growth in real estate and rental and leasing.
Social assistance increased by 26,000, while manufacturing added 4,000.
Retail, whose fortunes have fluctuated in recent months, saw a loss of 12,000 jobs.
Previous months saw net upward revisions, with February going from a scant 33,000 growth to 56,000, though March's total was reduced to 189,000 from 196,000, for a net gain of 16,000. Year to date, job gains have averaged 205,000 a month.
April's big increase comes amid a mostly postive backdrop of economic data.
GDP increased 3.2% during the first quarter, far exceding expectations, while productivity during the quarter jumped 3.6% for its best gain in five years. Pending home sales rose 3.8% in March, providing some hope in the real estate market so long as rates are held in check.
Earlier this week, the Federal Reserve held the line on its benchmark interest rate, characterizing economic growth as solid even as inflation remains tame. The central bank watches metrics like the nonfarm payrolls report closely for clues both on job creation and wage pressures.
Fed Chairman Jerome Powell said current indications point to a prolonged period of holding pat on increases or decreases in rates. President Donald Trump has said he wants the Fed to cut rates by a full percentage point.
There will be no coasting into the weekend, with Friday looking like a kitchen-sink kind of day for investors.
What we lack in big earnings news, with the bulk now past us, we’ll make up with data as big U.S. jobs numbers roll in, stronger than forecast, and then later we’ll get an ark full of Fed speakers. On Saturday, we’ll get Berkshire Hathaway’s
BRK.A, -0.52%BRK.B, -0.36%
annual meeting, and a chance to tap into the thinking of an all-time investing legend, the conglomerate’s billionaire chief executive and chairman Warren Buffett.
The so-called Sage of Omaha has already been busy, with Amazon
AMZN, -0.56%
up after he told CNBC late Thursday that “one of the fellows in the office that manages money... bought some” shares of the e-commerce giant. While Buffett himself didn’t push the button on that trade, he admitted being “a fan” and ”an idiot for not buying” the e-commerce giant before.
Our call of the day, from Byron Lotter, portfolio manager at South African-based Vestact Asset Management, says Berkshire’s latest move holds an important lesson for investors, given the company has traditionally focused on value-oriented companies — stocks that tend to trader cheaper than fundamentals would warrant — and Amazon’s share price is fairly eye-popping.
“Look forward, don’t look back at what the share price has done. Looking at the company’s history is important, and just because it’s gone up and it’s done incredibly well, don’t let that deter you from buying a share,” Lotter told MarketWatch, in a telephone interview on Friday.
He said if Berkshire isn’t scared off by the fact Amazon shares trade at $1,900 each, neither should investors get intimidated by a share price, and sit on the sidelines because they think they’ve missed out.
“Investors think that because a share is trading at an all-time high and has a market cap of a trillion dollars, Berkshire wouldn’t be buying Amazon,“ he said. “When we were buying (Amazon) at $350 we thought it was high.”
Shares of Amazon, Vestact’s third-biggest holding have gained roughly 100% (ex-dividend) over 2 years, 517% over 5 years, 2,307% over 10 years and 2,109% over 20 years, according to FactSet.
“There’s still huge potential for this company. You have to look at where you think the company is going. Cloud services is in its infancy and so is online retail,” said Lotter.
He’s also a fan of Google parent Alphabet Inc.
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which has seen a rough ride this week on disappointing earnings.“Google is growing at an expected 20% per annum, trading at 19 times earnings. In my opinion, it’s offering a lot of value.”
And another lesson from the Sage of Omaha? It also may be time for value investors to change their thinking a little. Berkshire has long stuck to companies that are considered less risky, with slow and steady growth, like American Express and Coca-Cola. That’s as opposed to growth stocks, companies with strong momentum like Amazon and Apple, which Berkshire also dipped into back in 2017 for the first time. Both those stocks though, have value qualities, argues Lotter.
“In this day and age, with so much information out there, and markets so transparent and liquid, if you stay in that deep-value box, you’re going to miss out and underperform the markets ,” said Lotter. “Gone are the days when you can find a quality company that has good potential trading at 10 times earnings.”
I may step on some toes here but I think Berkshire buying Amazon shares is a big blow for deep value. Value is not just about hard fundamentals anymore. Growth, transparency and a more holistic view of the bigger picture is required.
Europe stocks
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are mostly higher as a batch of companies report. Asian equities had a cautious session, with China and Japan stocks still out for a holiday.
The economy
U.S. payrolls for April jumped 263,000, better than forecast, and the jobless rate hit a 49-year low, while hourly wages rose. After that, the Markit services purchasing managers index, the Institute for Supply Management’s nonmanufacturing index.
As for Fed speakers, the day starts with a speech from Chicago Fed President Charles Evans in Sweden. Then an all-day conference at the Hoover Institute will feature appearances by Fed Vice Chair Richard Clarida and these Fed presidents—New York’s John Williams, St. Louis’s James Bullard, San Francisco’s Mary Daly and Dallas’s Rob Kaplan.
Jesse Felder, of The Felder Report says investors have been shying away from riskier sectors of the stock market, and that could mean this year’s rally could prove unsustainable. Here’s his chart and our chart of the day:
The chart stacks up the S&P 500 and a custom index Felder made to track sector preferences. When investors are embracing riskier sectors, that red line moves up, though those lines have been diverging this year. He said that also happened at the stock market’s top in 2007 and at last summer’s new high.
The buzz
Wild about non-meat. Plant-based meat maker Beyond Meat
BYND, +163.00%
is up another 13% after shares soared 163% in its Wall Street debut on Thursday, the biggest IPO pop since 2000.
Rubbermaid maker Newell Brands
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satellite provider Dish Networks
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and hydrocarbon exploration group Noble Energy
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are reporting Friday.
The stat
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9.1% — That marked the first-quarter return for Norway’s $1 trillion sovereign wealth fund, marking the best-ever quarter for the biggest such fund in the world. The Government Pension Fund Global is managed by Norges Bank, which credited a strong bounce for global stocks to that hefty gain, specifically tech stocks.
He was the gentlest of giants-A big man with an even bigger heart who never failed to make me smile & a loyal friend who I loved dearly-I'm grateful for the memories we shared & I'm a better man for just having known him. Thanks Pete #RIPPeterMayhew#Heartbroken@TheWookieeRoarspic.twitter.com/8xbq9HEWF2
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At Tesla’s Investor Autonomy Day last week, Elon Musk laid out the automaker’s plan when it comes to self-driving, but now the CEO attaches a valuation prediction to it as the company attempts to raise over $2 billion.
Following the announcement, Citigroup and Goldman Sachs, two of the underwriters of Tesla’s new capital raise, held a call for investors with some Tesla executives, including CEO Elon Musk.
According to people on the call (via CNBC), Musk focused on Tesla’s self-driving effort – going as far as saying that all of Tesla’s current businesses, electric vehicles, energy storage, and solar, are just a backstop of value.
He reiterated many things that he already said last week during Tesla’s Autonomy day, but he also added that he sees Tesla achieving a $500 billion market capitalization thanks to its self-driving technology:
Musk confidently told investors on the call that autonomous driving will transform Tesla into a company with a $500 billion market cap, these people said. Its current market cap stands around $42 billion. He also said that existing Teslas will increase in value as self-driving capabilities are added via software, and will be worth up to $250,000 within three years.
It would represent a more than 10x increase over Tesla’s current market capitalization of about $42 billion.
The CEO reportedly refused to answer some questions relating to Tesla’s current business efforts in order to focus on autonomy:
“But he also tried to drive the conversation back to autonomy, calling it the fundamental driver of value for Tesla, and urged investors to stop nit-picking over vehicle margins.”
Musk plans to himself participate in the capital raise by buying an additional $10 million worth of Tesla shares.
Electrek’s Take
Here’s the thing: if Elon is right about Tesla’s self-driving strategy, then he is also right about the valuation.
If Tesla can indeed turn virtually all the vehicle it produced since October 2016 (after some computer retrofits) into self-driving cars/robotaxis with a software update at some point next year, the company would indeed create hundreds of billions in value overnight.
Of course, it’s not as simple as that. The rollout will most likely be gradual as regulatory approval will happen based on jurisdiction, but you get the point.
As I previously stated, I agree with Tesla’s approach to autonomy and therefore, I think Tesla can get there.
But Tesla’s current business of selling vehicles to customers at a decent gross margin remains extremely important.
The problem is that Tesla needs to get there and Elon has been historically inaccurate when it comes to the timeline of self-driving.
What the first quarter showed is that Tesla can really be at risk with just a few months of issues. In other words, Tesla needs to survive while delivering as many vehicles as possible until its self-driving technology works
$2 billion more in the bank should help and give them something like a year of buffer.
Citing people familiar with the plans, the publication revealed Facebook was currently talking to major payment networks Visa and MasterCard about potential support, along with payment processor First Data Corp.
The cryptocurrency project, dubbed “FB Coin,” has fuelled rumors for around a year that Facebook wants to provide in-house payments to users. As more information trickles down to the outside, it appears various options are under consideration by executives, including payments via a user’s Facebook profile.
“Facebook is also talking to e-commerce companies and apps about accepting the coin, and would seek smaller financial investments from those partners, one of the people said,” the WSJ added.
As Cointelegraph reported, interest in a fiat-centric FB Coin has already reportedly come from within cryptocurrency circles, specifically in the form of VC investment mogul Tim Draper.
Last month, plans surfaced that Draper, who is a well-known bitcoin (BTC) bull and supporter of altcoin Tezos (XTZ), would meet with Facebook to discuss investment options.
According to the WSJ sources, however, the huge fiat backing is further deliberately designed to remove perceived doubts about FB Coin versus bitcoin and other cryptocurrencies. Volatility, they said, should be avoided in order to boost uptake.
By CCN.com: Berkshire Hathaway just bought its first Amazon shares, Berkshire founder and CEO Warren Buffett revealed to CNBC Thursday night. On the eve of an annual Berkshire shareholders meeting in Omaha, Buffett told CNBC that someone at Berkshire’s asset management desk just invested in some Amazon shares, but “it wasn’t me.”
“One of the fellows in the office that manage money… bought some Amazon so it will show up in the 13F.”
Amazon stock purchase a first for Warren Buffet
Warren Buffett is wrong about Bitcoin – just like he was wrong about Amazon. | Source: Shutterstock
The stake in Amazon is a first for the multinational investment conglomerate. Although Warren Buffett has had strong words of praise for Jeff Bezos and his company’s business, the Oracle of Omaha has mysteriously held off on taking a stake in the e-commerce giant since its IPO in 1997. Buffet jokingly reassured his personality isn’t changing:
“I’ve been a fan, and I’ve been an idiot for not buying. But I want you to know it’s no personality changes taking place.”
The about face on Amazon isn’t completely out of the blue. When asked in 2017 on CNBC’s Squawk Box why he hasn’t invested in Amazon shares yet, Buffett gave a one word answer: “Stupidity.” Last year in an interview with CNBC, Warren Buffett said:
“The truth is that I’ve watched Amazon from the start and I think what Jeff Bezos has done is something close to a miracle, and the problem is if I think something is going to be a miracle I tend not to bet on it.”
Warren Buffett ‘Blew it’ by not investing in Amazon
Warren Buffett told CNBC he “blew it” by not investing in Amazon earlier. | Source: Shutterstock
Then after CNBC’s Becky Quick asked Buffett if he would finally jump into Amazon stocks as he did with Apple 36 years after the computer and smartphone company’s initial public offering, Buffett revealed that he has been held back by the sting of regret that he didn’t bet big on Amazon at his earliest opportunity. He says he “blew it.”
“It’ll probably be tough. I’ve probably got so many psychological problems with the fact that I didn’t do it that it’s very hard to do it.”
Warren Buffett’s slow and steady approach to investing has certainly won the race of investment finance for him. When he finally relented in 2016 after years of waiting to invest in Apple, Berkshire Hathaway went all in with a $1 billion surprise blitz of 9.8 million Apple shares during a downturn in Apple sales and share prices.
Could Buffet change his mind on bitcoin?
Warren Buffett has called Bitcoin “rat poison squared” in the past, but he does appear very willing lately to reassess his investment positions. | Source: Shutterstock
That could certainly make you wonder exactly how much “some Amazon” means when Warren Buffett says it. Although Buffett’s warded off any speculation that he’s undergoing any personality changes, if he’s finally opened up to Apple and Amazon in the space of three years, maybe the Oracle will change his mind about Bitcoin too. Yes, despite labeling the cryptocurrency ‘rat poision‘ a year ago.
After all, Bitcoin has enjoyed massive year over year growth in its annual price floor, and a flourishing, mature, multi-billion dollar industry at an advancing level of market adoption has grown up around Bitcoin. At this point, the original cryptocurrency is looking more and more like the kind of sound, conservative investments for long term growth that Buffet likes.
By CCN.com: Berkshire Hathaway just bought its first Amazon shares, Berkshire founder and CEO Warren Buffett revealed to CNBC Thursday night. On the eve of an annual Berkshire shareholders meeting in Omaha, Buffett told CNBC that someone at Berkshire’s asset management desk just invested in some Amazon shares, but “it wasn’t me.”
“One of the fellows in the office that manage money… bought some Amazon so it will show up in the 13F.”
Amazon stock purchase a first for Warren Buffet
Warren Buffett is wrong about Bitcoin – just like he was wrong about Amazon. | Source: Shutterstock
The stake in Amazon is a first for the multinational investment conglomerate. Although Warren Buffett has had strong words of praise for Jeff Bezos and his company’s business, the Oracle of Omaha has mysteriously held off on taking a stake in the e-commerce giant since its IPO in 1997. Buffet jokingly reassured his personality isn’t changing:
“I’ve been a fan, and I’ve been an idiot for not buying. But I want you to know it’s no personality changes taking place.”
The about face on Amazon isn’t completely out of the blue. When asked in 2017 on CNBC’s Squawk Box why he hasn’t invested in Amazon shares yet, Buffett gave a one word answer: “Stupidity.” Last year in an interview with CNBC, Warren Buffett said:
“The truth is that I’ve watched Amazon from the start and I think what Jeff Bezos has done is something close to a miracle, and the problem is if I think something is going to be a miracle I tend not to bet on it.”
Warren Buffett ‘Blew it’ by not investing in Amazon
Warren Buffett told CNBC he “blew it” by not investing in Amazon earlier. | Source: Shutterstock
Then after CNBC’s Becky Quick asked Buffett if he would finally jump into Amazon stocks as he did with Apple 36 years after the computer and smartphone company’s initial public offering, Buffett revealed that he has been held back by the sting of regret that he didn’t bet big on Amazon at his earliest opportunity. He says he “blew it.”
“It’ll probably be tough. I’ve probably got so many psychological problems with the fact that I didn’t do it that it’s very hard to do it.”
Warren Buffett’s slow and steady approach to investing has certainly won the race of investment finance for him. When he finally relented in 2016 after years of waiting to invest in Apple, Berkshire Hathaway went all in with a $1 billion surprise blitz of 9.8 million Apple shares during a downturn in Apple sales and share prices.
Could Buffet change his mind on bitcoin?
Warren Buffett has called Bitcoin “rat poison squared” in the past, but he does appear very willing lately to reassess his investment positions. | Source: Shutterstock
That could certainly make you wonder exactly how much “some Amazon” means when Warren Buffett says it. Although Buffett’s warded off any speculation that he’s undergoing any personality changes, if he’s finally opened up to Apple and Amazon in the space of three years, maybe the Oracle will change his mind about Bitcoin too. Yes, despite labeling the cryptocurrency ‘rat poision‘ a year ago.
After all, Bitcoin has enjoyed massive year over year growth in its annual price floor, and a flourishing, mature, multi-billion dollar industry at an advancing level of market adoption has grown up around Bitcoin. At this point, the original cryptocurrency is looking more and more like the kind of sound, conservative investments for long term growth that Buffet likes.
Beyond Meat is celebrating its successful launch on the stock market with its first-ever Beyond Day Friday.
The alternative meat brand is giving away free food at select restaurants that serve its products including Carl's Jr. and Del Taco. It's also giving out $3 off coupons to use at grocery stores.
“On this day we acknowledge the hard work, the journey so far and the long road ahead,” Beyond Meat posted on its website. “And to say thanks, we’ve partnered with some of your favorite restaurants to provide FREE BEYOND MEAT menu options! Grab a friend and Go Beyond – on us.”
On Thursday, Beyond Meat debuted on the Nasdaq and its shares more than doubled. The purveyor of plant-based burgers and sausages raised about $240 million Thursday, selling 9.6 million shares at $25 each. Those shares rose 163% to close at $65.75.
May deals: Where to get free food and other discounts this month
Not so impossible: Burger King plans to release plant-based Impossible Whopper nationwide by end of year
The demand for plant-based products is growing as more people want to reduce meat consumption because of health concerns, Beyond Meat's founder and CEO Ethan Brown recently told USA TODAY.
The company's initial public offering comes amid growing consumer interest in plant-based foods for their presumed health and environmental benefits.
Vegan options are growing: Here's where to find meat-free items
Real Meals: Burger King counters Happy Meals with options if you are 'pissed' or 'salty'
Friday's deals
The following restaurants are offering promotions, while supplies last. To be on the safe side, check with your location before heading out.
Carl's Jr.: Get a free Beyond Famous Star with Cheese when you say “Happy Birthday Beyond” at the register and buy a medium or large soft drink, from 6 a.m. to close Friday.
Del Taco: Get a free Beyond Taco or Beyond Avocado Taco with any order on the Del App Friday. Download the app at www.deltaco.com/app.
Bareburger: From 3 to 6 p.m. Friday, get a free Beyond Burger with the purchase of a drink and a side when you show the Bareburger app on your phone.
Veggie Grill: From 2 to 5 p.m. Friday, get a free VG Beyond Burger when you buy a drink. Must be a VG Rewards app member and you’ll get a code to activate in the app through email. Download the app at www.veggiegrill.com/rewards
Epic Burger: From 4 to 7 p.m., get a free Beyond Burger when you say “Go Beyond” and buy a drink and side.
Coupon: Go to www.beyondmeat.com/beyondday Friday to get a printable coupon for $3 off one Beyond Meat product. Find stores where the products are sold at www.beyondmeat.com.
Contributing: Associated Press
Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko
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