What you missed: Twitter, RadioShack, jobs, and volatility


Every once in a while comes along a spate of headlines that individually are somewhat interesting.

Taken together, though, they point to larger economic trends of importance to investors.

In case you missed them, here are five stories in the news worth following.

 

RadioShack

RadioShack

The electronics chain parodied itself in a 2014 Super Bowl ad for never leaving the 1980s.

It’s easy to understand the feeling of nostalgia. Those were the glory days for RadioShack as citizens’ band radio hobbyists as well as pc and mobile phone buyers flocked to its stores.

RadioShack (RSHC) filed for bankruptcy protection last week because it failed to find new ways to lure customers in the 1990s and 2000s.

Some observers think RadioShack’s demise owes much to the death of free time in recent decades.

Work hours have increased and we are tethered to our jobs 24/7 thanks to smartphones, text messages and emails.

Who had time to hang out at RadioShack?

 

Jobs

They’re back.

The US economy is producing jobs again on a big scale. January’s nonfarm payroll growth of 257,000 exceeded expectations. Better yet, there were sizable upward revisions for December and November.

Job growth has been averaging 336,000 for the past three months and has exceeded 200,000 for 12 straight months.

If job growth remains in high gear, this could have big implications for the 2016 presidential race.

Republicans may need to recalibrate their arguments that Obama has mismanaged the economy.

The new tact: Republicans are taking credit for the U.S. economic recovery.

 

Volatility

Investors found themselves on one helluva a ride in January.

Last month, three-quarters of the trading days showcased moves of more than 100 points in the Dow Jones Industrial Average.

Yields on higher quality government bonds plummeted.

Noted investor and commentator Mohamed El-Erian thinks this has a lot to do with big economies being out of sync and foreign currency gyrations.

 

“Many of these developments reflect the effect of divergence — that is, large and persistent deviations among systemically important countries when it comes to economic performance and monetary policy prospects.

This variance continued to place an enormous burden on currencies, forcing them to essentially become the major shock absorbers. And, as history has shown us, movements in the foreign exchange markets…have consequences for other markets.”

 

Twitter

Twitter (TWTR) shares surged 16 percent last week after the social network posted quarterly of $479 million, up 97% year-to-year, that topped estimates.

The not-so-good news: Twitter lost $125 million in its fiscal year fourth quarter and $578 million for the year.

The stock is down about 12% over the last year, and the growth in new users has been slowing for some time.

 

TWTR-stock-price

Source: Bloomberg

Then there are the market rumors hovering over the company.

Among them: Google (GOOG)  wants to buy the micro-blogging service and Twitter CEO Dick Costolo may lose his job.

 

Turbo Tax

In this age of hacking and identity theft, losing control of your social security number can have ruinous results for your finances.

That’s why Intuit (INTU), the maker of TurboTax software, temporarily shut down its e-filing service of state tax returns after reports of fraud surfaced.The company’s federal tax filing service was unaffected.

 

Takeaway

All of these stories in their own way speak volumes about the current business environment.

Job growth is back, but workers are working long hours.

Market volatility, thanks in part to abrupt currency swings, is a big trend this year. Social media star Twitter is starting to dim and cyber theft continues to be a threat to U.S. companies.

Photo Credit: Nicholas Eckart via Flickr Creative Commons

DISCLAIMER: The investments discussed are held in client accounts as of January 31, 2014. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment ­recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.

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Xavier Brenner
Xavier Brenner
Xavier Brenner has covered global market, business and economic trends for Interactive Brokers Asset Management since 2013. An experienced financial journalist, Brenner offers analysis and insights on the stories that matter to the discerning investor.