AMJ (Alerian MLP Index tracking fund)

US hiring roared back to life in Jan as the labor market remained surprisingly resilient in the face of higher interest rates, scorching-hot inflation & mounting recession fears.  Employers added 517K jobs in Jan, the Labor Dept said, easily topping the 185K jobs forecast.  It marked the best month for job creation since Jul.  The unemployment rate, meanwhile, unexpectedly dropped to 3.4%, the lowest level since 1969.  Job gains were broad-based in Jan, with leisure & hospitality leading the way in hiring, adding 128K new workers.  That was followed by employment in professional & business services (82K), gov (74K), health care (58K) & retail (30K).  While monthly jobs data is always important, the Fed has been closely watching the reports for signs the labor market is moderating from its frenzied pace as policymakers try to wrestle inflation –  which is still running near a 40-year high – back to 2%.

US job growth unexpectedly surges as recession fears mount

Apple (AAPL), a Dow & NAZ stock, reported a tough Dec qtr, including the company's biggest quarterly revenue decline since 2016, along with sales drops in its iPhone, Mac & wearables businesses.  CFO Luca Maestri said AAPL's performance will get better during the current qtr even if overall sales will still be down from last year.  The company hasn't provided guidance since the start of the pandemic.  But its data points, or “directional insights,” as management calls it, allow analysts covering the stock to get a sense of how the company is doing & update their models.  “For iPhone, we expect our March quarter year-over-year revenue performance to accelerate relative to the December quarter year-over-year revenue performance,” Maestri said.  “This represents an acceleration in our underlying year-over-year business performance, as the December quarter benefited from an extra week.”  The iPhone is AAPL's biggest product segment by far, amounting for 56% of sales in the most recent qtr.  IPhone sales had declined over 8% year over year.  But Maestri's comment suggests they won't continue to fall as quickly in the Mar qtr.  Revenue had declined 5.5%.  Last year, in the Mar qtr, AAPL reported $97.3B in sales.  A similar decline in the Mar qtr this year would put sales around $92B.  On the surface, this should've been a disappointment.  AAPL explained, a drop of 5.5% would actually be an improvement from the Dec qtr, because results in that qtr were artificially boosted by the fact that there was an extra week.  In other words, Dec 2022's year-over-year revenue performance was even worse than it looked.  In addition, Covid lockdowns at factories in China were a big factor in the shortfall, but its production was back to a level it was comfortable with, suggesting that supply won't be as big a drag on the Mar qtr as it was in Dec.  “For Services, we expect revenue to grow year-over-year while continuing to face macroeconomic headwinds in areas such as digital advertising and mobile gaming,” Maestri added.  The stock rose 5.90.
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Apple telegraphed improving conditions after a tough quarter — here’s how to interpret its remarks

Treasury yields rose after jobs data came in much better than expected.  The 10-year Treasury yield was up about 11 basis points at 3.512% & the 2-year Treasury was up around 16 basis point to 4.253%.  Yields & prices move in opposite directions & one basis point equals 0.01%.  The data on nonfarm payrolls underscored the stickiness of the labor market.  The Fed has been trying to cool the economy thru monetary policy measures, including interest rate hikes.  At the conclusion of its latest meeting on Wed, the central bank increased rates by 25 basis points, but also said it was starting to see a slight slowdown of inflation.

Treasury yields leap after much hotter jobs report than expected

The stock market jumped around after the jobs report as traders try to figure out what it means.  One thing is certain, interest rates have been weak recently & now they will be rising.  Additionally, the inverted rate (the short term rate above the long term rate mentioned above) is a big 75 basis points, signally a recession.  Of course, that indicator has been effect for many months.  The Fed still has work to do which means higher interest rates.

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