Man can live about forty days without food,
about three days without water,
about eight minutes without air,
but only one second without hope.
With data dependent Federal Reserve Board members just chomping at the bit to normalize interest rates, all eyes were on yesterday’s job report to see if the hawks would get their wish. Low and behold, the piddling U.S. economy managed to create only one hundred and fifty thousand jobs (below the expected 180k). The melting August report gives the ever dovish Mrs. Yellen plenty of reason to say to investors (especially those in the banks), ‘Sorry charlie, gonna just have to wait some more’. Unsaid, but not forgotten, either, is the proximity to the election in November. In many ways, for nearly anyone currently invested in markets on the long side, the report gives you hope for the rest of the year. If you are waiting for interest rates to rise, you know it is going to happen, probably not in September, but most assuredly in December. The retail, and technology areas have seen a bit of a lift recently, and a stable environment helps their cause, as well as the housing and autos areas. A weaker dollar helps the entire commodity space, especially energy. In the pits that have been oil, lower domestic production and rock bottom rig counts is neutralized by record OPEC production, thanks to the Saudis and Iranians. Still, optimism runs high that 2017 will be a better year for the entire complex. As Mrs. Yellen and the country head into a long labor day weekend, hope springs eternal.
It has long been known if government officials want to find a way to extract money, they will find a way, regardless of how trivial the offense might be. Apple (NASDAQ:AAPL) found out the hard way this week with a little 14.5 billion dollar fine by the European Union. Sitting on a cool $250 billion in cash makes for an inviting and plump target, as Mr. Cook and the fellows in Cupertino found out. There will be plenty more litigation on this one, and the entire corporate world will be watching the outcome, as well as our fabulous government agencies, like the Treasury Department. It will take years to resolve, and it speaks to the importance of tax considerations for any entity which generates high levels of income for its owners. The best corporate leaders make sure to put tax strategy somewhere at the top of their lists. Hmmm, I wonder who they might be? If you have been reading the blog for a while, you might have an idea.
Elsewhere in the markets, notable earnings in the tech world came from Sales force and chip maker Ambarella Inc (NASDAQ:AMBA), which both met estimates, although Salesforce.com Inc (NYSE:CRM) guided soft for the next quarter. Tax giant H&R Block Inc (NYSE:HRB) missed, as did Liberty Tax Inc (NASDAQ:TAX), apparently due to emergence of do it yourselfers on computers. Imagine that. In retail, Abercrombie & Fitch Company (NYSE:ANF) and G-III Apparel Group Ltd (NASDAQ:GIII) disappointed investors, but gun maker Smith & Wesson Holding Corporation (NASDAQ:SWHC) continues to destroy estimates. You may be aware gun owners continue to believe Barack and Hillary kind of have it out for them, so they need to stock up before they won’t be able to buy that 357 magnum.
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