Hello, this is James Mayer, Branch manager for the Huffman Mayer Paolo Wealth Management group of Wells Fargo advisors. Coming to you live from freezing Geneva on the Lake.
Okay, I’m sorry it was too cold to be outside. To celebrate Groundhog Day we are excited to have you here for January’s edition of The Market Recap.
We hope you and your family are having a great start to the New Year. Let’s hear from Phil Anderson concerning our three key topics of January.
Thanks James and thanks for the top hat.
In an article written by Accessed in early January, the non-farm payroll number for new jobs came in at 199k in early January, vs. an expectation of 450k. Despite this 55% miss, unemployment now stands at 3.9% and pressure on companies to increase wages in order to attract new employees remains high. FOMC Chairman Powell has recently characterized the labor shortage as “voluntary” – meaning it has more to do with people leaving the workforce on purpose than not being able to find work. According to data from Guggenheim, of the roughly 4.75 million people who have left the labor force since late 2019, over 3 million are both over 55 years old and no longer want to work. The remaining 1.75 million former workers are either looking for work currently or are younger workers who don’t want to work (but likely will have to return to the labor force when their savings run out).
“Times Change” – according to Affiliated Managers Group, during 2021 the capitalization of all U.S. stocks rose by $12 trillion dollars. Just 10 years ago, the value of the entire U.S. stock market was $16 trillion. Even more amazingly, early in January of 2022 Apple (AAPL) became the world’s first $3 trillion dollar company. Just 40 years ago (in 1982), the value of all of the world’s publically traded companies was $2.7 trillion.
According to FactSet, many large companies begin reporting fourth quarter 2021 results in the second week of January. Of the 93 companies that have provided guidance for 4Q21, 40% have given “positive” guidance (meaning earnings per share above the mid-point of analyst’s expectations) and 60% have given “negative” guidance. We should point out that these percentages are right in line with the five year averages, but are weaker than the last few quarters when markets where recovering from COVID and growth rates were at or near records.
Thanks, Philip, for that update, that top hat certainly suits you. For our snowbird clients, let go to Ryan Richards and our special guest for the weather update.
Thanks, James. My buddy Punxsutawney Phil just informed me that unfortunately we are going to freeze a little longer and Phil thinks I look absolutely ridiculous in this hat. Back to you James.
Thank you very much, Mr. Richards.
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As always stay happy, safe, and healthy and hopefully we will see you very soon.
The opinions expressed here reflect the judgment of the Huffman Mayer Paolo Wealth Management Group as of the date of the video and are subject to change without notice. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.