 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Friday's Headlines 1. April's Blow-Out Jobs Report 2. Warren Buffett's Favorite Weekend 3. Money Flows Markets Closed
Year-to-Date
 Markets Juiced by Jobs Report U.S. markets rallied today on the heels of the April non-farm payrolls report, which showed 263,000 new hires during the month, which was far better than economists had predicted. In addition, the unemployment rate fell to 3.6%, the lowest since December 1969, according to the Labor Department. Today's rally halted a two day decline for the S&P500 following the Federal Reserve's decision to not lower interest rates at its meeting this week, and potentially in future meetings this year.
As we have been writing all week, the Fed looks at the jobs market and inflation as its principal data points when adjusting monetary policy. Inflation is below the 2% benchmark the Fed likes to use, and the unemployment rate is near a 50-year low.
While many investors and the White House have been imploring the Fed to cut rates, today's jobs report reaffirms the Fed's decision to leave rates unchanged.
Still, there were two small signs of weakness in today's otherwise excellent report.
Those will be two themes to keep an eye on going forward, but the headline number on the unemployment rate is what got everyone excited today.
Sometimes, charts like this, from the Bureau of Labor Statistics, say it all.  Buffett's Faithful Descend on Omaha, Nebraska Tens of thousands of Berkshire Hathaway investors and members of the media are descending on Omaha, Nebraska in America's heartland to hear words of wisdom from Warren Buffett and Charlie Munger, Berkshire's vice-chairman. It's Berkshire Hathaway's annual meeting, which means all of the Berkshire subsidiaries will be on display for investors, who are also encouraged to buy gifts for themselves, family and friends from companies like See's Candies, Fruit of the Loom Underwear, Justin Boots, GEICO Insurance, Florsheim's Jewelers, NetJets, and dozens more.
Buffett, a huckster at heart, makes the rounds at the conference, posing for photographs, eating a DQ ice cream, drinking Cherry Coke's, playing ukelele with the Fruit of the Loom band, and having a grand old time.
His investors worship him and Munger, who have helped make millionaires out of many of them and have remained faithful investors for years. I've been to the event many times, and it is unlike any other in capitalism. That's why they call it, "Woodstock for Capitalists".
photo courtesy cbsnews.com  What's on Investors' Minds? Beyond having a grand old time, investors will have a lot of questions for Buffett and Munger. For starters, Berkshire Hathaway has underperformed the broader market so far this year, by a lot. James has more on that in our daily chart, below. Beyond that, here are a few top of mind issues that will come up this weekend:
Read our full writeup: What to Expect at the Berkshire Hathaway Annual Meeting Where is the Money Flowing? Even though we have had a historic rally since the beginning of the year, money has not been flowing into the equity market after it ran out the back door in November and December. The stock market has been rising as institutional money has been buying big stocks like Apple, Microsoft and Facebook, which lift the overall market.
But, overall money flow is not going into stocks, according to Bank of America Merrill Lynch. It's been going into Investment grade bonds, ETFs - which are made of stocks, but trade differently, and money-market funds. With the dollar as strong as it is, the move into money markets makes sense. The fact that we are near record highs and money is still on the sidelines could mean that investors are still scared to commit and may wait out the rally, or that there is another big leg up for stocks in the next few months. Unfortunately, only time will tell.
Read more: Why the Bull Market Could Rally Another 27% 
Charts courtesy of www.koyfin.com  Newell Rubbermaid, the maker of Rubbermaid storage containers, Sharpies and other household products, reported better-than-expected earnings.  The video game maker Activision also reported better-than-expected earnings. These earnings were apparently not good enough, though, as revenues fell 7% from last year. Stocks fell as much as 5.6% in trading.  Word of the Day Employment Situation ReportSince we've been talking about the jobs report, and the non-farm payroll report, today, we thought we might as well give you some background on the actual report, known as the Employment Situation Report.The Employment Situation report is a monthly report compiling a set of surveys in an attempt to monitor the labor market. Also known informally as the "labor report," the Employment Situation Report is released by the Bureau of Labor Statistics, which is part of the U.S. Department of Labor. It summarizes total non-farm payroll employment in the United States by surveying over U.S. businesses and households. In short, it provides insight into who is working (and not working), what industries are seeing job gains and losses, and includes data broken down by age, gender, race and other groupings.  Source: NYT.com
Today in History May 3, 1998: The front page of the Sunday New York Times reports that an obscure biotechnology company, Entremed Inc., has cured cancer in mice. In the article, Nobel laureate James Watson, who co-discovered the structure of DNA, says that Entremeds head researcher is going to cure cancer in two years. On Monday morning, Entremeds stock skyrockets from $12.06 per share to $85. By the end of the week, after later reports pooh-poohing Entremeds research, the stock has sagged to $33.25 -- leaving latecomers holding the bag. Chart of the Day: Despite Short-Term Underperformance, Berkshire Hathaway Outperforms in the Long-Run  The 20-year chart above paints a clear picture of just how well Berkshire Hathaway's stock (BRK.B, the more accessible and affordable Class B shares) has done in the long-term. When compared with the S&P 500, BRK.B has much more than doubled benchmark returns since 1999. Even on shorter-term multi-year look-backs, Berkshire Hathaway's outperformance is also exceptionally impressive.
Only when you get down to the most recent short-term numbers does the situation reverse. Year to date thus far, the S&P 500's rather stellar performance has substantially eclipsed that of Berkshire Hathaway. To be more precise, BRK.B has climbed only around 7% in 2019 thus far, compared with around 18% for the S&P 500.
To keep things in the proper context, though, consider that in Warren Buffett's world, four months (2019 year-to-date) constitutes just a very minor blip in the much greater scheme of things. To Buffett, it's clear that having delivered outstanding, market-beating returns over decades is infinitely more important than performance over a handful of months.
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Friday, May 3, 2019
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