August can bring investors heightened uncertainty and disappointing economic reports. One part of the economy that seemed to slip during August this year is hiring.
It marked the 10th straight year the actual jobs data for the month of August has fallen below forecasts. One question for investors to consider is why economists are bullish about hiring in predicting August numbers when half of the country is trying to find spots to lay their beach blankets in late summer.
The 150,000 non-farm payrolls figure released last Friday, Sept. 3, slipped under the 180,000 consensus estimate of 180,000 new jobs, while the unemployment rate stayed at 4.9%. Once those numbers crossed the tape, both bonds and stocks rallied on the notion the Fed will not raise rates at its Sept. 21 Federal Open Market Committee (FOMC) meeting.
Even though 150,000 new jobs for the economy isn’t gangbusters, it is still within the Fed’s parameters to act on its plan to begin to normalize short-term interest rates.
Of course, there always is volatility within the employment reports. July’s strong 255,000 in new jobs added was revised higher to 275,000 jobs, implying the job market’s reduced growth in August was not as much of a disappointment as first thought.
In my view, what is most important is that the bond market may adjust if it has a good reason to do so. The yield on the benchmark 10-year Treasury Note rose on Sept. 3 to close at 1.60% amid a growing number of market participants who see Fed officials looking for reasons to hike rates before the December meeting.
The situation is too close to call. But at the end of the day, it makes little difference in how the rest of the month will play out.
Stocks are moving higher across the board right now with investors showing interest in dividend-paying equities. In my monthly investment newsletter, Cash Machine, I recently added a closed-end fund that invests in infrastructure stocks that both Hillary Clinton and Donald Trump are promising to spend hundreds of billions of dollars to support.
The fund is managed by one of the most respected firms on Wall Street. It also trades at a 13.3% discount to net asset value (NAV), pays a hefty 7.55% current yield with no return of capital and holds 182 companies in its portfolio. Those stocks consist of transmission power companies, cell phone tower companies, railroads, engineering construction companies, pipeline operators and infrastructure industrial companies. It also is up 15.52% year-to-date, or twice the return of the S&P 500.
A great number of promises will be made by the presidential nominees in the next 60 days, but fixing aging roads, highways and bridges and adding high-speed trains, driverless car lanes, better water systems, sewage and disposal and power grids is where the spending is going to be targeted.
An investor’s portfolio should have a decent weighting in this macro trend because the amount of money that will find bipartisan backing for these major projects will be huge. The total expenditure on such endeavors could reach $1 trillion. The companies that are in the path of this spending binge are going to see their stocks outperform the market.
It is an investment wave that every investor should capitalize on and these types of timely investments that also pay enticing income can be found at Cash Machine. Just click this link and get on board before the infrastructure spending train leaves the station. It would be my pleasure to welcome you and guide you on your way.
Until next time,
Bryan Perry has spent more than 20 years working as a financial adviser for major Wall Street firms, including Bear Stearns, Paine Webber and Lehman Brothers. Bryan co-hosted weekly financial news shows on the Bloomberg affiliate radio network, and he’s frequently quoted by Forbes, Business Week and CBS’ MarketWatch. With three decades of experience inside Wall Street, Bryan has proved himself to be an asset to subscribers who are looking to receive a juicy check in the mail each month, quarter or year. Bryan’s experience has given him a unique approach to high-yield investing.