The Jobs Report Is In | Investor Beat - 11/8/13 | The Motley Fool

TL;DR

The jobs report showed better than expected results, but investors are now concerned about the Fed's next move. The Twitter IPO went smoothly compared to Facebook, but the low pricing could indicate a bad IPO. Gap is doing well in the retail industry while Abercrombie and Fitch is struggling.

Transcript

it may have been late but this jobs report was worth the wait investor beat starts now thanks for watching I'm Allison Southwick the Dow is rallying today after yesterday's biggest drop since August lifted by a better than expected jobs report joining me now in studio is Morgan howel and David Hansen analyst here at the Motley Fool so let's get bac... Read More

Key Insights

• 🛀 The jobs report showed better than expected results, but the concern now shifts to the Fed's next move.
• 😘 The low pricing of the Twitter IPO could indicate a bad IPO on the part of the bankers, as the stock went up 80% on its first day.
• 💦 Gap is performing well in the retail industry, while Abercrombie and Fitch is struggling with a significant drop in sales.
• 🈷️ Investors should focus on long-term trends rather than month-to-month figures in jobs reports.
• 🍗 Trying to predict the market's reaction to economic data is difficult as the economy is complex.
• 😘 The Twitter IPO left a billion dollars on the table due to low pricing, indicating a potential mistake by the bankers.
• 🥺 Twitter's profitability is uncertain, but its large user base and cash from the IPO could lead to future innovations.

Questions & Answers

Q: Should individual investors try to forecast what the Fed will do?

Individual investors should not try to forecast the Fed's decisions or interest rates. Instead, they should focus on finding good companies and holding them for the long term.

Q: How accurate are the month-to-month jobs reports?

Month-to-month jobs reports have a large margin of error, and the numbers are often revised multiple times. It is better to look at long-term trends rather than focusing on specific monthly figures.

Q: Did the stock market react positively to the good jobs report?

The stock market had a good day after the jobs report, but there have been instances in the past where a good jobs report led to a market fall or vice versa. It is difficult to predict the market's reaction to economic data on a day-to-day basis.

Q: Is there any economic data that investors should pay attention to?

Economic data can help investors understand how the market works but making investment decisions based on one variable is challenging. The economy is complex, and there are many factors at play.

Q: How did the Twitter IPO compare to Facebook's IPO?

The Twitter IPO may have appeared to go smoothly, but it actually left a billion dollars on the table due to the low pricing. This could indicate a bad IPO on the part of the bankers.

Q: Is Twitter a good investment?

While Twitter is not currently profitable, it has a large user base and a lot of cash from the IPO. The market is betting on the company's potential for innovation in the future. The shares are pricey now, but owning Twitter is not necessarily a bad decision.

Q: Is Gap or Abercrombie and Fitch more representative of the retail industry?

Gap is more representative of the retail industry as they target a larger customer segment and have diverse offerings. Abercrombie and Fitch, on the other hand, targets a smaller segment (teens) and has seen a drop in sales.

Q: Are there any bright spots in the retail industry for the upcoming holiday season?

Retailers catering to the high-end (such as Nordstrom) and low-end (like Ross stores and TJX companies) of the market have a better chance of doing well. However, Abercrombie and Fitch is struggling and has warned of further sales drops.

Summary & Key Takeaways

• The US added 204,000 jobs in October, which was a surprise but now leads to concerns about the Fed's next move.

• The Twitter IPO went smoothly, but the low pricing may indicate a bad IPO on the part of the bankers.

• Gap is performing well in the retail industry, while Abercrombie and Fitch is experiencing a drop in sales.