Weak Jobs Number Sends Homebuilders Higher

The Dow and other major indexes stumble after the weaker-than-expected jobs report, but some businesses are benefiting from this information.

Jan 10, 2014 at 1:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Investors spent the week waiting eagerly for the U.S. Labor Department's latest nonfarm payroll report, which most economists estimated would show 200,000 jobs created in December. But the release this morning indicated that only 74,000 new jobs had been created last month. To make things worse, the labor force participation rate fell from 63% in November to 62.8% in December, which played a part in pushing the unemployment rate down to 6.7%, from its previous 7% resting spot.  

This worse-than-expected news has caused rising negative sentiments throughout the markets, and as of 1:05 p.m. EST the Dow Jones Industrial Average (DJINDICES:^DJI) is down 40 points, or 0.24%, while the S&P 500 and Nasdaq are both down 0.08.

The Dow's biggest loser at this time is Chevron (NYSE:CVX) which is off by 1.9%. The drop comes after the oil and gas giant released an interim update on its fourth-quarter earnings. Management expects earnings to be comparable to the year-ago quarter, as U.S. net oil-equivalent production is slightly lower, but has been offset by higher natural gas prices domestically. The company has been dealing with asset price fluctuations all quarter, both here at home and internationally, and those changes may end up hurting the company's profits this quarter.  

Outside the Dow, homebuilders are rallying today, as DR Horton (NYSE:DHI) is up 2.6%, Lennar (NYSE:LEN) is up 2.6%, and PulteGroup (NYSE:PHM) is up 2%. These moves higher are likely due to the weak jobs data released this morning.The Federal Reserve has made it clear that it will base part of its decision to slow its asset purchasing program and let interest rates rise on strengthening jobs numbers. Additionally, the data released today pushed U.S. Treasury yields lower, with the 10-year falling from 2.97% to 2.88% and the 30-year down from 3.88% to 3.81%. This lowering of the Treasury yield will also help homebuilders by pushing mortgage rates lower, making it more affordable for American's to buy homes.  

More Foolish insight

Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand new company that's revolutionizing banking, and is poised to kill the hated traditional bricks-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

Fool contributor Matt Thalman has no position in any stocks mentioned. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513

The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers