Dow closes 400 pts. higher as ADP jobs data strengthens Fed rate cut hopes

Jonathan Hoenig of CapitalistPig.com has a national look at business news including an unfortunate flattening of jobs numbers

Episode Transcript

Speaker 1 (00:00):
Let's go over to the Legacy Retirement Group dot Com
phone line, one of our favorites every Thursday. He is
our Capitalist Big. You can find him the Capitalist Big
dot com. Jonathan Hoenig, Jonathan, good morning. See the Dow
at a good day yesterday?

Speaker 2 (00:11):
Oh up?

Speaker 1 (00:11):
What like four hundred points?

Speaker 2 (00:13):
Yeah, Mike, great to be with you. It's one of
those days where bad news is kind of good news. Basically,
we got weak jobs data and that strengthened the proposition
that we're going to get yet another fed Ray cut
next week. As you said, that Dow up about four
hundred points, and it's still been all about earnings by
and large. We got some good news from Salesforce. Now
they're not one of the necessarily the Big seven, but

(00:35):
they are a big high tech company that reported better
than expected earnings yesterday after the bill. That stock is
up a little bit. What people were primarily talking about
were those jobs numbers. ADP came out with a report
that said private payrolls actually dropped by about thirty two
thousand positions last month, and basically job creation has been

(00:55):
flat in the second half of the year. This is
the ADP's words. So this is a big concerned Mike.
I mean, the good news again likely to lead to
lower interest rates. The badness is that jobs are getting
kind of hard to find, even holiday jobs. You know,
we always talk this time of year about how stores
and companies like ups I hire hundreds of thousands of people.

(01:16):
Well they're still doing it, but according to the National
Retail Foundation, doing it much less. In fact, sports stores
are expected to hire somewhere between two hundred and sixty
five and three hundred and sixty five thousand work workers
this year, and that's down. Last year was almost four
hundred and fifty thousand years workers. So we're talking about
a drop of about forty percent and just one year

(01:37):
for these holiday jobs.

Speaker 1 (01:39):
Mike, Yeah, it's interesting. Jonathan Holaday Capitalistic dot Com. What
did what did Golden? I saw a silver hit a
record high yesterday.

Speaker 2 (01:47):
Yeah, I mean that's been one of the questions about inflation.
You know, President Trump is talking about affordability, talking about
prices coming down, and my gosh, I mean under Biden,
no question, my inflation was running at five six seven percent,
but still nowhere near the FEDS target of two percent.
And we're seeing a lot of those physical commodities you
mentioned gold, Copper is also at an all time high.

(02:09):
All the medals have done quite well. So what is
that ultimately translated into likely higher prices for things that
we buy and even things that we rent. There was
a story out this morning that said the new car
market is off the charts. You know, the average monthly
payment MIC for a new vehicle is seven hundred and
sixty six dollars. That's the average payments. Crazy. I mean,

(02:31):
it seems like just a couple of years ago that
was for really a luxury vehicle. Right if you were
getting a Beamer or Mercedes, you'd be paying six seven
hundred dollars a month. This is now the average monthly
payment and the average amount financed towards that new vehicle
also a new all time high forty three thousand dollars
on the card.

Speaker 1 (02:48):
Unbelievable, and that's why people are hanging on to their
old cars longer too. And you know, speaking of silver
and gold, there's this rare Earth Magnets company. It's backed
by Donald Trump Juniors venture capital firm that's got a
six hundred and twenty million dollar contract from the Defense Department.

Speaker 2 (03:05):
Yeah, it's the largest contract ever made by the Pentagon's
Office of Strategic Capital. The company in focuses vulcan elements.
Now we know rare earths are the future, a lot
of technology based on them, and this is a startup
that is backed by Donald Trump Junior's VC firm. He's
got a VC firm called seventeen eighty nine Capital And

(03:27):
basically this company's secured a six hundred and twenty million
dollar contract from the US Defense Department. It's part of
a big partnership basically intended to boost the domestics supply
of magnets. But you know what doesn't like kind of
suggest a little bit of perhaps I don't know, pay
to play or a little bit of insider dealing here
when you're seeing, you know, children of the president getting

(03:47):
huge amounts of money from the US Department of Defense,
there's going to be a lot of people who say, look,
you know, this is this is an issue, this is
something worth investigating, and there's going to be a lot
of money still allocated when it comes to government spending
on these rare So once again seeing that confluence of
politics and Wall.

Speaker 1 (04:03):
Street right there in Main Square, Yeah, you would think
that they would have had all the attorneys on the
planet looking into that deal to make sure it was
on the up and up. But I'm sure the SEC
will look into it as well. And is that Vulcan Elements.
Is that publicly traded company?

Speaker 2 (04:17):
It is Vulcan publicly traded indeed, Yeah, I mean, so
investors getting in on this one, and you know, shoppers
as well. You know, we had a record cyber Monday, Mike,
and something to be I guess positive about the people's
credit card balances. He had a seven point one percent
increase from last year for a record cyber Monday, somewhere

(04:38):
on the area of fourteen point two billion dollars. I know,
I certainly bought something, but a lot of it was
built by these competitive discounts. You know, retailers are tripping
over themselves in giving us sales, giving us special deals.
So we had things like electronics which were marked down
about thirty percent. Toys were marked down about twenty eight percent.
So you know, you also saw a lot of these

(05:00):
discounts and computers, even fashions, so a lot of the
discounts driving a record online sales. People still shopping, Mike,
despite the fact that jobs are getting harder to find
and credit card balance is also in near all time high.

Speaker 1 (05:12):
Well that's a good point too. I mean those cyber
Monday numbers are are pretty impressive, beating you know last
year by you know what you said to seven and
seven point one percent. But it's my understanding that we
bought less items but paid more for them. So you
mentioned credit cards, So people just don't care. I mean,
stuff's more expensive, but they're still going out and slabbing
down the plastic.

Speaker 2 (05:33):
And also very popular this year, Mike, is the buy now,
pay later options. I mean, this has become ubiquitous on
all the major sites. And you know, not to give
you one financial advice, but you know, if you miss
one of those payments, you want to end up paying
a hell of a lot. And you know finance and
interest chargers, so you know, people always say to me,
you know, what's a great stock that you know can

(05:54):
make me a lot of money. I often say, look
at your own spending habits, maybe perhaps rain them and
just even a little bit over the holiday season and
try to start twenty twenty six off on a really
solid foundation. Yeah.

Speaker 1 (06:05):
I don't know about the buy now, pay later. We
used to call that back in the day. Lay away.
Remember those days we just go put it wayaway. Speaking
with Jonathanjoni Capitalist pig dot com, I see these Constellation Brands,
which is the operator of these beer companies, Medello and
Corona are casualties that we've been talking about Trump's ice
and the immigration crackdowns.

Speaker 2 (06:24):
What's the story there, Yeah, I mean it's an interesting
kind of once again confluence of Wall Street and Main Street.
I mean, Medello was it's the top selling beer in America,
but it lost that spot last year because Constellation Brands
now that's the parent company of Manila. Basically, the Latino
customer is their number one customer, and a lot of
Latino customers are now fearful, according to the article of

(06:48):
venturing out in public to stores, to restaurants and bars
directly due to that immigration enforcement blitz. So Constellation Brands
stock is down about forty percent. Like it's one of
the worst performers in the S ANDP. I've this year.
The story was over at CNN, and basically it's just
kind of a big turnaround. Constellation that said last year
that Hispanic customers were the single most important consumer group

(07:10):
for their beer business, and that's certainly hurting them in
an economy where a lot of those customers are unfortunately
afraid to walk outside the door.

Speaker 1 (07:17):
Jonathan, I want to restate or recap something we mentioned
at the top of the conversation. You know, the FED
meets next week, and you suggested, based on some of
the jobs data that came out that we could see
another rate cut. Yeah.

Speaker 2 (07:29):
I mean that's exactly the point. We're seeing stocks even
up about, you know, twenty eight points on the Dow
this morning, and that's the further and further expectation, Mike.
You know, the Fed with its eye I'm keeping the
jobs market alive, and it's been basically flat accorded to
ADP over the second half. Another quarter point rate cut
widely expected for the Fed next week, but as always,
we'll be here to cover it all on WTVN. As

(07:52):
the market still struggles to hold on. You know, it'd
been all AI all year, and we're starting to see
a little bit of broadening. Mike. That's a good thing.
Pharmacut little pharmaceutical stocks for example, picking up. So you know,
as always live within your means, have a diversified portfolio,
and never bet against this great country.