Jobless Claims Hit New Low, How to Play Cuba

Less Americans seeking unemployment benefits

When market momentum goes negative, there’s always a temptation to trade for the sake of trading. It’s 90 degrees and sunny here in Bonita Springs. Maybe I’ll put that cash together in the form of ice cream. So far, earnings season has fueled a bit of a fade on the banking side. Morgan Stanley (NYSE:MS) has been the early exception. Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) both came in above profit estimates. But there was a fade in the trade. Morgan Stanley, however, looks like it is finding some positive momentum and giving investors a reason to cheer.

Near-Term Low in Americans Seeking Unemployment Benefits

Another reason to cheer is coming out of the Labor Department. This morning, the weekly jobless report came in at a post-pandemic low. In addition, the number of people filing claims came in at 360,000 for last week. That figure came in line with expectations.

The number of Americans seeking unemployment benefits totaled a little more than 14 million. That was 50% of where we were at this point last year. I know that inflation has been a big story over the last week.

But I remind everyone that U.S. employment is equally important. The Federal Reserve has a mandate to focus on the price of goods (inflation) by managing interest rates. But it must also bring the U.S. toward the goal of full employment.

We’ve seen substantial moves in the jobs market over the last few months. Service industry jobs are evaporating at a breakneck pace. People are just walking off the job. One Burger King just made headlines after the entire staff quit. Here’s the sign outside the Lincoln, Nebraska location earlier this week.

We’re not out of the woods yet on the jobs front. And I’m starting to feel like this employment situation isn’t going to be resolved very soon. So, we need to get Americans back to work, and this could be a reason why so many people anticipate that inflation is likely to run hot well into 2023.

Playing Cuba

The big geopolitical story this week is coming out of Cuba. The largest protests against the communist government are now spreading to my state. The Miami area is very “anti-Cuban government,” with many former citizens living in the United States. Many friends of mine in the area have family and friends still living in Cuba under the regime.

How can you trade this story? I have a great little fund that can generate you nearly 10% by playing the political winds. I’m going to talk about it tomorrow.

For now, pay very close attention to what is coming out of Washington around this story. Few people pay attention to the Cuba geopolitical challenge. But it has had a significant impact on American politics and elections over the last 21 years. The 2000 election was effectively decided over the Elian Gonzalez saga during the end of the Clinton Administration.

And Cuban voters have swung heavily to Republicans in 2016 and 2020. This has dramatic economic implications for the years ahead. I’m not so focused on politics as I am the opportunity that exists from a tiny closed-end fund that can be a reliable way to generate income during this ongoing turbulence in the market. I’ll give you that pick tomorrow morning.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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