Ahead of Wall Street - February 3, 2012 - Ahead of Wall Street
03 Febbraio 2012 - 9:56AM
Zacks
Friday, February 3, 2012
It is all about Jobs today, as the market digests this morning’s
significantly better than expected January jobs report. Not only do
we have an impressive headline number, but the internals of the
report speak of broad strength and an accelerating trend. Needless
to say that the market will cheer today’s report.
The Bureau of Labor Statistics reported better than expected
jobs numbers for January of 243K, compared to expectations in the
130K to 150K range. The tallies for December and November were
revised upwards, belying expectations that last month’s strength
was due to one-off seasonal factors. The unemployment rate dropped
again – to 8.3% from 8.5% in December. Average hourly earnings and
the average workweek both ticked up, rounding out an overall very
positive labor market report.
The expectation for a deceleration in the January
number reflected the reversal of some seasonal factors that
had supposedly boosted the December gains. Instead, we not only an
accelerating jobs trend in January, but the very strong December
number was revised upwards. This is consistent with all the major
labor market indicators that have been showing an improving trend.
Initial Jobless Claims have been steadily coming down. The
employment component of the manufacturing ISM survey was less
favorable in January compared to the preceding month, but was
nevertheless indicating jobs gains. Importantly, we have
consistently been seeing greater improvements in the Household
survey than in the Establishment survey over the last three to four
months, indicating that the official jobs numbers are understating
actual labor market gains. This shows to me that we are in the
midst of a fairly stable improving labor market trend.
In this morning’s earnings results, we got an EPS and revenue
beat from Tyson Foods (TSN) on the back of
strength in the meat processor’s chicken business.
Weyerhaeuser (WY), the real estate and lumber
company, also beat earnings expectations on roughly in-line
revenue. American Axle (AXL) beat on EPS, but
missed on revenue. Estee Lauder (EL) provided a
lower earnings guidance, citing increasing marketing outlays due to
new product launches.
After the close on Thursday, Sunoco (SUN)
confirmed its corporate restructuring plans that will result in the
company shedding its remaining refining assets and holding on to
only its midstream logistics (the Sunoco Logistics
or SXL, stake) and marketing business. The company also announced a
leadership change, a 33% boost to quarterly dividend, stock
buybacks totaling about 20% of the company’s market cap, and debt
repayments and other liabilities. This is a significant
shareholder-friendly initiative that will bring down the company’s
risk profile.
Sheraz Mian
Director of Research
AMER AXLE & MFG (AXL): Free Stock Analysis Report
ESTEE LAUDER (EL): Free Stock Analysis Report
SUNOCO INC (SUN): Free Stock Analysis Report
SUNOCO LOGISTIC (SXL): Free Stock Analysis Report
TYSON FOODS A (TSN): Free Stock Analysis Report
WEYERHAEUSER CO (WY): Free Stock Analysis Report
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