Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Five Things You Need to Know: Employment (yawn), Toll Bros. (Hemingway pun omitted upon request), Also Other Stuff


What you need to know (and what it means).


Five things you need to know to stay ahead of the pack on Wall Street.

1. Employment (yawn)

Sorry but after the new private data that was introduced this past Wednesday by Automatic Data Processing (ADP) and Macroeconomic Advisers, LLC, we just can't seem to muster any enthusiasm for the government's Friday employment data.

  • Judging from the stock market futures following the report, we are alone in our lack of enthusiasm.
  • Futures spiked higher on news that the economy added fewer jobs than anticipated last month.
  • It was the smallest increase in employment since October.
  • Some see that as a sign the Fed will pause their rate hikes after one more 25 basis point raise next month.
  • Oddly, that is precisely what Fed chairman Ben Bernanke said the Fed would do just last week.
  • Minyanville Professor Scott Reamer noted that "the replacement of existing workers needs a 200K +/- print so this (138k) is clearly under employment in any respect."
  • "271K additions were due to the birth/death model. That makes 692K reported adds to payrolls and 329K (48%) of those have been birth/death adds."

2. Toll Bros. (Hemingway pun omitted upon request)

Toll Brothers (TOL) said fiscal second-quarter orders fell 33% thanks to a "temporary" housing glut.

  • It's spring, and that means one thing! No, not that thing. Let's start over.
  • It's spring, and that means one thing other than that thing you thought of first: It's home selling season!
  • Spring is traditionally the busiest time for selling homes in the U.S. market, but rising mortgage rates and record prices have reduced demand, according to recent reports from homebuilders including Hovnanian and Toll Brothers. But let's put a more positive spin on it.
  • "We believe the excess supply on the market is a short-term phenomenon,'' Robert Toll, the company's chairman and chief executive officer, said in a company statement. There, that's better!
  • Wait, there's more. "Speculative buyers are no longer fueling demand; instead they're putting the homes they've recently acquired back on the market or are canceling contracts in mid-construction," Toll said. Hmm, a bit more difficult to put a positive spin on that one... unless you happen to be Wall Street Anti-Negativity Positive Man!
  • We asked Wall Street Anti-Negativity Positive Gravity Man to parse that last statement from Toll for us. You know, make it happy, we said.
  • "If one thinks of homes like stocks, not that they are, but just, you know, if one thinks of them that way, then one could say that what we have here is simply a case where Toll Brothers homes, which have an average price of about $700,000, are simply moving from weak, speculative hands into stronger hands," Wall Street Anti-Negativity Positive Gravity Man said.
  • "That's actually bullish for Toll Brothers longer-term," Wall Street Anti-Negativity Positive Gravity Man said, "because speculators, whom we refer to as "fast money," have a tendency to speculate while the strong holders provide a better foundation for higher prices down the road."

3. Old Yeller vs. Demand Curve

Anglogold Ashanti (AU) more than doubled its earnings in the first three months of 2006, but noted something very interesting in discussing future gold expectations...

  • With gold this morning making another 25-year high, Anglogld Ashanti (AU) provided a positive background for the metal with comments during its first quarter earnings report.
  • The South African mining group posted a 110% rise in adjusted earnings to $86m in the first three months of the year.
  • AU said the gold market was in a "sustained positive cycle."
  • The company also noted that demand from banks looking to diversify their holdings helped boost demand.
  • However, the company noted what economists always warn about - but commodities investors sometimes forget - higher prices is dampening demand.
  • "Physical demand for gold has begun to fall in the last two quarters - especially in the jewelery sector - because of the high gold spot price," the company noted.

4. Asian Single Currency

Korea, China and Japan have agreed to start joint research on introducing an Asian single currency comparable to the euro.

  • The three countries will set up a research team staffed by government officials and experts at public and private research institutes to come up with a framework for the Asian currency unit (ACU) by the end of the year.
  • This is the first time governments have decided to make concrete efforts toward the launch of the ACU.
  • Ok, so what does this mean?
  • Given the political "sensitivities" involved (read: U.S. dollar), the Asian Development Bank stresses that an ACU, which would be made up of a basket of currencies, would not be traded and would simply be an "indicator of the stability" of participating currencies.
  • But what if? What if the ACU did trade like the euro? Wouldn't that potentially harm the U.S. dollar? Of course.
  • Meanwhile, Timothy Adams, U.S. Treasury under-secretary for international affairs, told the International Herald Tribune "We don't oppose it. I have no concerns about this issue."
  • Remember when your best friend in college asked you if he could start dating your ex-girlfriend a couple of weeks after you broke up? You talked a good game didn't you? Might have put on a brace face, said something like, "I don't oppose it. I have no concerns about this issue."
  • Of course, some skeptics (there's always one) question the viability of an ACU in any form for the same reasons some questioned (and continue to question) the viability of the Euro: too many different levels of economic development in the region and a lack of economic transfer systems between areas that are doing well and those doing poorly.

5. Hey there, little filly

While tomorrow is the Kentucky Derby, the most exciting two minutes in sports, today is Kentucky Oaks Day, a one mile and one-eighth race for three-year-old fillies, the sister companion to the Kentucky Derby.

  • The first Kentucky Oaks race was held on Wednesday, May 19, 1875.
  • The race was one of four stakes races created by Churchill Downs founder M. Lewis Clark.
  • The other three races were the Kentucky Derby, the Clark Handicap, and the Falls City Handicap, all of which are still held at Churchill Downs even today.
  • Like the Derby, the Kentucky Oaks has been held each year since 1875 without interruption.
  • While there is not an official "filly triple crown" the Oaks is the first of three races that make up an unofficial triple crown. The other two races are the Black-Eyed Susan, traditionally held the Friday before the Preakness, and the Acorn Stakes, traditionally held the Friday before the Belmont Stakes.


Minyanville contributors may trade securities that are discussed on the site, both before and after the articles are published and/or may have a position in such securities for either personal or firm account(s). Minyanville contributors will indicate whether he or the firm has a position in stocks or other securities in any of the companies he discusses in an article. He will not disclose his or the firm's ownership of any securities issued by companies that are not discussed in an article. The disclosures will be accurate as of the time of publication of an article and may change at any time thereafter without notice to the reader.

The information on this website reflects an analysis of market conditions by Minyanville contributors and should not be interpreted as or deemed to be a recommendation to any investor or category of investors to purchase, sell or hold any security. Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Minyanville contributors will not respond to requests for individual and specific investment advice.

The views expressed on this website are solely those of the writers whose articles appear on this site and do not necessarily reflect the views of the Fund or of any other person except where expressly indicated.

Copyright 2006 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos