Something was missing in the lead-up to the February employment report. Not entirely sure what, but the juice wasn't there, perhaps as the involvement of weather has been widely covered
Nonetheless, here are the must-knows from #NFP day.
- Electronics and appliance jobs declined 12,000. This is the first sign of the impact of mass retail-store closures across the country. Watch how this impacts other sectors (transportation) in the months to come.
- Upward revisions to December and January and the headline February beat (which will likely be revised higher) remove all doubt regarding the Federal Reserve's likely course of action. The taper is on and apparently the U.S. economy is poised to take that in stride.
- There could be a spending splurge in the spring and I can't believe I am saying that. Wages have been so depressed for the past few months, once consumers get a little extra money back in their weekly checks it will provide a relief, and the unlocking of spending power. This doesn't mean hit the buy-buy-buy button on retail stocks. The entire sector is in a promotional vortex crushing profit margins. What it does mean is to stay exposed (or get exposed) to the names trading deservedly on relative premium valuations like Under Armour (UA). Or, find those names that are immediately poised to benefit from the removal of structural costs via store closures (Abercrombie & Fitch (ANF), definitely not Staples (SPLS)).
