Experience Leads the Race

Hey Influence Traders:


Let’s start off today with a labor market lesson to put some recent reports in perspective.


I got a number of inquiries after last week’s job report.


The December jobs report raised concerns about how many Americans may have permanently left the labor force and are not being counted in the unemployment numbers.


The labor force participation rate is in the low 60th percentile, which made a lot of people question (rightfully) the allegedly low unemployment rate.


The labor force participation rate measures the country’s active workforce. 


It is calculated by dividing the total number of noninstitutionalized, civilian working-age population by the number of people 16 and older who are employed or actively seeking employment.


According to the Bureau of Labor Statistics, the labor force participation rate ranged between 61.4% and 61.8% in 2021.


While those numbers struck many as low, since 2013 the monthly number has averaged around 63%, with its low point of 60.2% being reached in the midst of the COVID-19 pandemic.


With historical context, 61.8% does not seem that out of whack.


Rare Consensus

According to a new poll, three-quarters of voters agree that members of Congress should not be able to trade stocks while serving in office.


Nancy P. and team had no response to those results.


Future of Mandates 

Last week, SCOTUS had tough questions regarding Biden’s federal vaccine mandate.


Some court watchers say it was enough to put the mandate in doubt.


The Biden Agenda

Biden’s approval rating continues its downward trend, and his agenda remains in doubt.


To resurrect it, Pelosi invited the President to give a State of the Union address on March 1.


She stated in a letter to him that she anticipates his Build Back Better plan being passed by that time.


March 1 gives him enough time to create economic spin … and he will need to be creative given just about every measure of economic activity being down.


The nation saw just 199,000 jobs added in December.


Economists had anticipated gains of 420,000 jobs. 


Republicans immediately jumped at the opportunity to criticize Biden’s economy. In true partisan fashion, Biden immediately criticized Republicans for criticizing the economic recovery. 

Crypto – YIKES!


Bitcoin (TBTC) – and the rest of crypto – is having the worst start to a new year in … crypto history. 


It was also reported that scammers stole over $14 billion in digital assets in 2021.


That will not help investor confidence in the asset class.


Crypto confidence is coming in just below confidence in the CDC’s grasp of COVID data.


Energy

You know I love the energy sector!


And despite some good moves during 2021, it’s still a buy.


The Morningstar US Energy Index underperformed the broad market in the fourth quarter, returning 6.15% versus the market's 8.6%.


The median stock in the index is trading at a 14% discount, with the oil services segment trading at an average discount of 32%. 


Energy is a broad segment … from fossil fuels to renewables.


Renewables in particular have the backing of the current administration.


If you don’t think that green energy is important to this administration, simply ignore the fact that the President took the opportunity, when talking to thousands of people who lost their homes in the CO wildfires, to pitch windmills and green energy jobs.


And the pressure is on with new research shows that U.S. planet-warming emissions rebounded in 2021, after a pandemic-related slowdown in 2020.  


But fossil fuel demand across the globe is still high.


One of the leaders in the energy segment is Exxon Mobil (Ticker: XOM).


Whether environmentalists like it or not, XOM will be part of any future energy discussions.


XOM plans to double earnings from 2019 levels by 2025 and double cash flow by 2027 across multiple segments.


The Biden administration is looking to reverse a Trump-era move that opened up more of the Arctic for drilling. 


That will benefit established energy players like XOM.  


Greenhouse gas emissions increased by 6.2% while gross domestic product grew 5.7%.  


Much of that was due to an increase in the use of coal to generate power. 


Cutting Through the Noise for You,


Frank

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