Welcome to Capital Account. The jobs report released today reiterates a grim situation for millions of unemployed Americans. The jobs number was below expectations again: the economy added 96,000 jobs while analysts expected 130,000. The unemployment rate fell from 8.3% to 8.1%, however this drop is most likely due to a fall in the labor force participation rate. Meanwhile stock markets appear more than eager to grasp the hand of dovish central banks. Stocks rallied after the ECB announced its unlimited bond buying program yesterday. We talk about it.
Also, China has reportedly approved plans for $158 billion in infrastructure spending. China’s growth is slowing and analysts are concerned about slumping iron ore prices, a gauge of industrial production. We talk to commodities expert Steven Leeb, Chairman and Chief Investment Officer of Leeb Capital Management, about what effect this stimulus might have. We also discuss the effect that marginal cost increases have on commodities more broadly, and the important role that water scarcity plays in all of this.
Plus, at the DNC Barack Obama spoke about a path where the US reduces its dependence on foreign oil and takes more control of its own energy future. Administration officials met with oil market experts yesterday as they consider the release of Strategic Petroleum Reserves. We talk to Lindsay Hall, Chief Market Strategist for the RMB Group (http://www.RMBGroup.com), about why she still anticipates higher prices for oil despite economic slowdowns in China and Europe and SPR injections. We also ask her about the Japanese Yen, and what she thinks, as a FOREX trader, about where the currency is headed in the near future.