The Economic Data calendar for the week of the 7th of April through the 11th of April is full of critical releases and events. Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.
According to today’s Labor Department figures, the U.S. created 192,000 jobs in March and the unemployment rate remained unchanged at 6.7%. Consensus expected an increase of 200,000 non-farm jobs.
With that said, we asked in today’s poll, Do you trust the jobs report?
At the time of this post, 75% responded NO; 25% said YES.
Of those that voted NO, they said history provided enough evidence not to trust the report. One noted that the report “comes out way too quickly and is revised way too often. I believe they had to do a massive restatement of the numbers a couple years ago.”
Another asked, “How can one trust those who deliberately avoid plummeting participation rates because those #s contradict their propaganda?”
While some voted NO, they felt that didn’t diminish the report’s use. “I don't trust the reported number itself, but it's probably consistently off, so as an indicator, it has some value.”
One commenter explained their choice more simply: “I believe in the jobs number, the inflation rate, and the Easter Bunny.”
Over in the YES group, one responder explained, “I don't trust it as a reliable sample of the number of jobs created. It might be a flawed sample and even more flawed methodology. But unlike government metrics like inflation, this one is at least consistently flawed. If we can game the incremental change in something that is consistently flawed, then I have a consistent use for it.”
Hedgeye CEO Keith McCullough answers the top three questions from his Twitter followers including whether investors should be worried about a brewing market bubble.
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Hedgeye's Macro Team will be hosting our highly-anticipated Quarterly Macro Themes conference call on Tuesday, April 8th at 1:00pm EDT. Led by CEO Keith McCullough, the presentation will detail the three most important macro trends we have identified for the quarter and related investment opportunities.
Q2 2014 MACRO THEMES OVERVIEW
The large capacity increase in Q2 for the Caribbean is clearly impacting pricing
OVERALL SURVEY SENTIMENT
CALL TO ACTION
RCL continues to be a mixed bag with strong pricing power in Europe but weakness in the Caribbean. NCLH’s high exposure to the Caribbean will pressure company yields particularly in 1H 2014.
Our most recent pricing survey focused on RCL and NCLH, since CCL just reported earnings last week. While overly conservative in our opinion, CCL’s guidance was certainly disappointing. RCL's pricing power resides in Europe and pricing in the region strengthened even further in March. However, RCL is not immune to the weakness in Caribbean pricing, particularly for FQ2. For NCLH, its FQ2 Caribbean pricing continued to slip in March. We estimate NCLH has approximately 83% and 46% exposure to the Caribbean in FQ1 and FQ2, respectively.
Chart 4 shows overall, NCL pricing fell slightly at the end of March.
STOCK VS SURVEY
Survey has been mostly bullish for Carnival since the major pivot from the 10/14/13 survey.
Survey has suggested mixed signals for RCL in the past 6 months
Survey has been bearish on NCLH since the 02/12/14 survey
We’re grinding on wrapping up our 2Q14 Macro themes presentation (call next Tuesday) so we’ll keep the March Employment review tight here. Some notable callouts along with a visual summary below:
Christian B. Drake
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