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Seeing a drop of 33,000 in the headline September employment number almost gives you a flashback to 2008 when the world felt like it was ending, no?
Luckily, this is 2017 and the banks have de-leveraged and the world feels like it’s ending for a different reason (about that guy in the White House …). Why stocks reacted harshly to the report is rather simple to understand if your life revolves around the world of Wall Street, as mine has done for the past 14 years. The market is fully aware that the October employment number will bounce back in the wake of the hurricanes. And along with that spring back to life, could come an acceleration in wage growth. Seeing as wages grew a solid 2.9% annualized in September, any bump in the growth rate into year-end may fuel expectations of faster interest rate increases by the Federal Reserve in 2018. Boom, down go red-hot stocks such as Facebook (FB) .
At least that’s how the logic used to go back in the day, but who knows in a market that continues to defy conventional wisdom. In the meantime, the jobs numbers are bullish restaurants like McDonald’s (MCD) . Have a lovely weekend.
Qualcomm vs. A Lot of People
TheStreet recently hosted Qualcomm (QCOM) CEO Steven Mollenkopf at our headquarters for a chat about the future of technology. Some of things being worked on right now by tech companies is pretty mind-blowing. It goes a long way to understanding Wall Street’s infatuation with big (yet still young) tech names like Facebook (FB) and Alphabet (GOOGL) . Qualcomm should be a beneficiary of many coming trends, notably the push toward applying big data in the industrial process.
Mollenkopf obviously touched on two hot button issues right now. One, its pricing battle with Apple (AAPL) and the other with activist Elliot Management. I am not going to give the full interview away here, but will say the battle with Apple may play out longer than some people think.
Clorox Is Just Getting It Done
It’s pretty easy to understand why Clorox (CLX) shares have zoomed nearly 30% compared to the Dow Jones Industrial Average’s 27% gain since CEO Benno Dorer took the helm in November 2014. The guy just has that “it” factor that many companies should look for in a leader. He’s personable, is pro team, is tech savvy and gets the need to move fast … and actually get things done in the process.
Check out my interview with Dorer on Thursday from the company’s bi-annual investor day above. I came away very impressed with what Clorox has cooking over the next few years. It won’t be easy for Clorox looking out to 2020 given the fast-changing retail dynamics (thanks for that, Amazon (AMZN) ), but if any consumer products company could win in this backdrop it’s this 104-year-old company.