Payroll data up, U.S. trade deficit shrank and JC Penney (JCP) stock skyrockets on holiday sales results

Markets closed higher on Wednesday after U.S. non-farm payroll data came in higher-than-expected. ADP said that private employment rose to 241,000 last month. This surpassed economists’ expectations of 226,000. They also upwardly revised November’s data from the original 208,000 to 227,000. When broken down by business size, small businesses gained 106,000 jobs; middle-sized company’s gained 70,000 jobs and large companies added 66,000. When broken down by industries, business services lead the data with 69,000 and the lowest was construction with 23,000 new jobs. Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues to power forward.”

In other news, U.S. trade deficit fell to an 11-month low in the second-to-last month of the 2014. The decline was largely helped by the plunging oil prices and a rise in U.S. oil production. The data showed that the trade deficit was down to $39 billion in November. This is down 7.7% from October. Patrick Newport, an economist at Global Insight, said, “The trade gap will continue to shrink apace until the oil import tab stops falling like a rock.”

Shares of J.C. Penney (JCP) skyrocketed up over 20% after the company posted strong holiday sales. The struggling department store reported that sales were up 3.7% for November and December. The results surpassed economists’ expectations of a 3% drop. The company also reported that they are projecting to report an increase of 4% in sales for the fourth-quarter. Many are still saying that the company still has quite a bit of work to do. Jeff Mack, from Yahoo Finance, said, “JCPenney did not become awesome merchants. If you go to the store, you’re not dazzled. They’re still JC Penney. We know who they are and 3.7% for them is great.

That’s all for today,

Warren Gates, Normandy Research

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