The Happiest Professions

Jul 19, 2019   //   by Bruce Mason   //   Weekly Market Update  //  No Comments

It was a rather quiet week as investors digested early earnings announcements.  Many banks reported earnings and almost all met or beat expectations despite falling net interest income.  Given the nature of information these days, it is rare for a company to surprise analysts either to the upside or downside.  By law, companies are expected to disclose events that would have an adverse impact on earnings.  On the other hand, it is hard to predict what companies will issue for forward guidance and it is in this realm that stocks can move on new information.  The next few weeks will see some companies rise while others fall on future expectations.  We’ll be reviewing the earnings data and guidance closely.

Aside from earnings announcements, we learned that China’s growth has slowed yet again.  Although China’s GDP has been slowing for the past decade, it is hard to ignore the impact tariffs are having on the country’s exports.  Weakened by trade tensions, China’s economic growth decelerated to 6.2%, the slowest pace in 27 years.  However, don’t expect China to take this lying down.  It seems uncertainty isn’t just an American thing.  China’s companies are feeling the pressure too.

As far as the United States goes, the U.S. economy keeps humming along according the Federal Reserve’s Beige Book.  The latest report said economic activity kept expanding at a modest pace overall, from mid-May to early July.  In most districts, sales of retail goods increased slightly overall while vehicle sales were flat.  Home sales picked up “somewhat,” however residential construction was flat.  Manufacturing production was generally flat while employment grew at a modest pace.  It was a mixed bag of data points all suggesting that overall economic growth is slowing slowly (if that makes sense).

For company news we couldn’t not talk about Amazon’s Prime Day.  The company announced it sold over 175 million items over this year’s two-day period.  Amazon claims sales topped the previous Black Friday and Cyber Monday totals combined, but didn’t break out specific numbers.  At a time of increased scrutiny from regulatory bodies, now might be a good time for Amazon to downplay the success before it finds itself in front of a Congressional committee accusing it of being a monopoly.

In company news, Netflix announced good earnings but shocked analysts with a huge miss on new subscriptions.  Many had expected Netflix to gain approximately 5 million new subscribers in the quarter but fell far short with only 2.5 million, leaving some to question whether the increased competition from Disney, Hulu, HBO, and soon to be NBC (in 2020) are eating into this company’s prospects.  While Netflix had a huge lead in the streaming industry, its competitors are both taking back content previously licensed to Netflix and creating new original content of its own.  In the future, we may all get the a la carte menu we’ve always wanted, it may just come at the expense of cost and convenience.

In closing, I came across a survey by Bloomberg purporting to tell us the happiest and least happy professions.  I know most of you are well on your way with regard to your career and unlikely to make a switch at this point in your life, but you may have children or grandchildren that could use this information.  Also note, happiness as measured in this survey does not necessarily equate to income.  That aside, the most contented professions are firefighters, pediatricians, communications professors, guidance counselors, and mine cutting and channeling machine operators.  Those least happy with their chosen professions include mail clerks and sorters, court and municipal clerks, housecleaners and maids, insurance claims and policy clerks, and telemarketers.  Take all of this with a grain of salt since satisfaction, to a large degree, can be defined in a myriad of ways.  But at least according to this survey it might be worth looking into becoming a firefighter.  Now you know.

July 19, 2019

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