Don't Fear a Strong Jobs Number

 | Dec 05, 2013 | 11:41 AM EST
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Who can blame anyone for not selling ahead of this employment number tomorrow? I am fearing a strong number -- north of 250,000 -- just like everyone else. But I am also mindful that, as I wrote earlier, we are seeing a regional boom in oil-and-gas-related companies, and the boom gives me hope that stocks can go up on better-than-expected earnings, bucking the tide that we see on our screens.

Circling back to Conn's (CONN), you have a hard-goods retailer, everything from home appliances to furniture, mattresses, television and computers, that shot the lights out with its earnings this morning, vaulting the stock up 16%. The number was so much better than expected that we have to look at a breakdown of where the stores are. So here's the rundown: 22 in Houston, 14 in Dallas, 11 in San Antonio and 11 in other cities in Texas, six stores in Louisiana, two in Oklahoma and one each in Arizona and New Mexico.

Basically Conn's is the oil and gas retailer, the company that I believe is seeing the miracle of the Eagle Ford and the Permian first hand, the beginning of the ancillary plays that can buck the whirlpool of higher rates. It's also the wonder of job creation from the build-out of natural gas export terminals by the likes of Cheniere Energy (LNG) in Louisiana and the need for so many workers to surround the beehives of activity that are directly related to exploration and production.

There's a tremendous job multiplier as part of this boom. Just think of what's happening with Chart Industries (GTLS), the company that has the best technology to create what amounts to gasoline from natural gas. The company's main factory is in Louisiana, all the better to build the hard-to-construct big boxes that encompass the transfer technology and then put them on boats to take them overseas. The company can't get enough workers to make these boxes, and welders are the real bottleneck. I know that welding requires particular skill sets that may not be available in Louisiana, and our mobility isn't what it was before hard times hit, but it will happen over time.

Chart is also building devices that can be used to build out natural gas stations, something that will involve Clean Energy Fuels (CLNE) and, more important, Royal Dutch Shell (RDS.A). These stations cost between $1 million to $1.5 million, and these two companies are building, together, perhaps as many as 400 stations. Once that build-out gets rolling, then you get a reverberation as far-reaching as Indiana, where Cummins (CMI) is located, because Cummins is making the truck engines that use liquefied natural gas, which is perfect for long-haul truckers.

The permutations will eventually embrace much of this country, and I believe they are already affecting the gross domestic product and payroll numbers.

Now, I know that any job increases that are above the baseline will cause interest rates to jump. I know that higher rates can hurt the stock market for a variety of reasons. That's why there's so much fear.

I am simply pointing out that higher interest rates do not have to be the end of the world, provided that revenues are strong and the earnings that come from them are bountiful, and perhaps Conn's is a bit of a microcosm of what can occur.

Sure, it's a stretch. But if I am right, there will soon be many stretches, and that's what needs to happen to combat the "good news is bad news" conundrum that's causes us to be down five days running. 

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