Average Annualized Return Per Closed Trade: 17.9%
Average Return Per Closed Trade: 15.5%
Average Holding Period: 320 days

After weak March hiring activity, the job market rebounded in April. The Labor Department’s Bureau of Labor Statistics reported this morning that the U.S. economy added 211,000 non-farm jobs, above the expected 190,000 mark.

The previously reported 98,000 March gain was revised downward to 79,000, and the February number was revised upward to 232,000 from 219,000. But even with the net two-month downward revision of 6,000, today’s overall numbers are a mild positive surprise. Over the last three months, the monthly non-farm payrolls gain has averaged 174,000, below the 200,000 mark typically thought to represent robust growth but also not telegraphing any economic trouble.

Furthermore, the unemployment rate ticked down to 4.4 percent, the lowest rate in more than 10 years. The labor participation rate, however, ticked down to 62.9 percent, suggesting that sidelined workers (no longer counted as among the “unemployed”) largely remain marginalized.

In keeping interest rates unchanged earlier this week, the Fed noted that it believed the first-quarter slowdown was transitory in nature. Today’s April job figures support the Fed’s analysis.

In the political arena, in what’s being hailed as a major victory for President Trump and House Speaker Ryan, yesterday, the GOP rushed its second version of the American Health Care Act (AHCA) through the House of Representatives by a 217-213 vote before holding any hearings on its impacts or costs. The Democrats were unified against the bill, while 20 House Republicans broke party ranks and voted “no.” The market reaction was rather muted, because the next step—The Senate—figures to be a tougher hurdle to leap over.

The upper house of the U.S. Congress will now work on the bill over the ensuing weeks. Unlike the speedy vote in the House, the Senate will likely take its time and will likely make some substantial changes to it. At the very least, Senate rules mandate studying feedback from the Congressional Budget Office about budgetary impact from the bill before Senators can vote on it.

Furthermore, the GOP pursued a procedural tool known as reconciliation in order to pass the bill through the Senate with a simple majority rather than a 60-vote majority. But reconciliation rules dictate that any changes must be limited to taxes and spending and not involve broader policy changes.    

Even if the bill survived likely challenges to the reconciliation aspect, with a narrow 52-48 advantage in the Senate, assuming the Democrats keep a united front, the GOP can only afford to lose two votes. Less than 20 percent of Americans polled support repealing Obamacare and replacing it with AHCA and Senators are likely to face pressure from their constituents and health-care organizations to vote itdown.

As we noted last week, we would much rather see Washington spend its time on an infrastructure investment plan to boost productivity and growth in the U.S. Although the bill was pushed through the House quickly, it’s still a long way from becoming law and could still end up a wasted effort.

We post a snapshot of our Brain Trust Profits Portfolio and the record of our closed trades below. For a more detailed table of current recommendations as well as information on closed trades, log into our website and click on the ‘Portfolio’ link.


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