Market Update: May 1, 2017


  • Stocks head higher to begin week. U.S. stocks are modestly higher in early trading, following news that Congress reached an agreement late Sunday to fund the government through September 30; pending approval by Friday, the deal will avoid a government shutdown. The major averages all closed lower on Friday, though the S&P 500 still managed a 1.5% gain for the week. Earnings dominated last week’s headlines, as the S&P’s advance was led by more than 2% weekly gains in the technology, healthcare and consumer discretionary sectors. Overnight, nearly all major markets in Asia and Europe were closed for holidays; Japan’s Nikkei was the exception, closing up 0.6% after Purchasing Mangers’ Index (PMI) data came in near expectations. Meanwhile, the yield on the 10-year Treasury is up slightly to 2.30%, COMEX gold ($12669/oz.) is flat, and WTI crude oil is dropping more than 1% to below $49/barrel.


  • Another busy week of earnings on tap. A very strong earnings season continues this week with 127 more S&P 500 companies slated to report results. With about two-thirds of companies having reported, S&P 500 earnings for the first quarter of 2017 are now tracking to a 13.6% year-over-year increase, well above the 10.2% increase reflected in consensus estimates as of April 1. The upside surprise has been about more than just easy comparisons in energy, with broad-based strength across several key sectors, including financials, healthcare, industrials, and technology. The 77% earnings beat rate thus far, should it hold, would be the best since 2010.


  • Company guidance has been more upbeat than usual. Forward estimates for the S&P 500 have only fallen 0.2% since earnings season begin, reflecting generally optimistic guidance from corporate America (average earnings season declines are 2-3%). We see little potential for policy upside in calendar 2017 (though there is a fair amount in 2018), suggesting most of the resilience in earnings estimates reflects recent firming in the business environment.
  • Employment report highlights a busy week. The first week of the month always includes some key economic data, highlighted by Friday’s Employment Situation report. Usually, any Federal Reserve (Fed) policy meeting would be the week’s highlight, but this week’s meeting, concluding Wednesday, will not receive as much attention, with expectations near zero for a rate hike and no new projections accompanying the release of the policy statement. We’ll also get a read on U.S. business activity, with April manufacturing and non-manufacturing PMI from the Institute for Supply Management released on Monday and Wednesday, respectively. Internationally, we’ll get March Eurozone unemployment on Tuesday, Eurozone first quarter 2017 gross domestic product (GDP) on Wednesday, and preliminary Eurozone PMI data on Thursday.
  • Congress reaches deal to fund the government. As expected, after an initial one-week extension, House and Senate negotiators reached a deal to fund the government through September. A vote is expected later this week, possibly as early as Wednesday. Although few saw material risk of a shutdown, clearing this hurdle does help pave the way for other initiatives. Tax reform is the top priority but Republican policymakers continue to try to craft an agreement to repeal and replace ObamaCare, where the path to compromise remains extremely difficult.
  • Almost all markets in Europe and Asia are closed today for the May 1 holiday. Japan is the major exception to the general state. One data point was released, Chinese manufacturing PMI was 51.2, lower than the March figure of 51.8 and also lower than expectations. Lower prices for commodities is largely the culprit, not a drop in demand. Still, it does highlight the sensitivity of the Chinese economy to “Old Industrial China.” After generally good economic reports in Q1 2017, the Chinese government has announced a series of crackdowns on excessive leverage in the real estate and financial markets.
  • Reflecting on Nasdaq 6000. The Nasdaq Composite hit 6000 last week, more than 17 years (or 6250-plus days) after first reaching 5000 back in March of 2000. During the dotcom boom in the late 1990s, moves from 3000 to 4000 and 4000 to 5000 were quick at 56 and 71 days, before the long and winding road to 6000 over the course of nearly two decades. Although this milestone has sparked more bubble talk in the media, we believe stocks are far from bubble territory, and the Nasdaq stands on a much stronger foundation today than it did in the days leading up to the dotcom crash.
  • Welcome to May. May is a busy month with multiple events that could move global markets. From the Fed meeting, to Presidential election in France, to the kickoff of what has historically been the worst six months of the year for equities; this is a big month.



  • Personal Consumption Expediture Core & Deflator (Mar)
  • ISM Mfg. PMI (Apr)
  • BOJ: Minutes of March 15-16 Meeting
  • China: Caixin Mfg. PMI (Apr)


  • Eurozone: Unemployment Rate (Mar)


  • ISM Non-Mfg. PMI (Apr)
  • FOMC Rate Decision (May 3)
  • Eurozone: GDP (Q1)


  • Eurozone: Markit PMI (Apr)
  • Eurozone: Retail Sales (Mar)


  • Change in Nonfarm, Private & Mfg. Payrolls (Apr)
  • Unemployment Rate (Apr)
  • Labor Force Participation & Underemployment Rates (Apr)





Past performance is no guarantee of future results. The economic forecasts set forth in the presentation may not develop as predicted. The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. Treasury Inflation-Protected Securities (TIPS) are subject to interest rate risk and opportunity risk. If interest rates rise, the value of your bond on the secondary market will likely fall. In periods of no or low inflation, other investments, including other Treasury bonds, may perform better. Bank loans are loans issued by below investment-grade companies for short-term funding purposes with higher yield than short-term debt and involve risk. Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments. Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate. Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards. High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors. Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply. Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained. Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged. This research material has been prepared by LPL Financial LLC.

Weekly Advisor Analysis: February 9, 2016

Investors were hoping for a fresh start to February given the previous tumultuous four weeks. Overall, the results were mixed. The Dow Jones Industrial Average was up 0.84 percent for the week and the S&P 500 was down 0.70 percent. The tech-heavy NASDAQ Composite ended the week down 3.18 percent as technology and biotech companies weighed on the index. International markets didn’t fare much better. The Stoxx Europe 600 Index ended the week down 4.78 percent and Japan’s Nikkei 225 closed down 3.99 percent. Oil finished the week lower in uneven trading as investors wrestled with global growth concerns and a possible deal between the largest producers.

Government Bonds

The U.S. 10-year Treasury bond hit 1.80 percent, the lowest in nearly 10 months, last week. This marks a sizeable drop from the 2015 year-end yield of 2.27 percent. Fears of slowing global growth have driven investors into government bonds and, as one of the only central banks raising rates, U.S. government bonds are very attractive. Indeed, nearly 25 percent of global government bonds outstanding have below-zero yields. As the demand increases, the price on bonds goes up, pulling yields down. Possibly exacerbating the issue, the U.S. Treasury has announced it will cut the issuance of Treasury bonds maturing in five or more years for the first quarter of 2015 by $18 billion. While the amount is relatively small compared to the $13 trillion in outstanding debt, the recent increase in demand and lower supply could push bond prices even higher. It is important to note if yields drop sharply, investors that are taking negative bets on those bonds may be forced to buy to cover their bets. Known as a short squeeze, the rapid buying of bonds by short sellers covering their bets could move prices even higher and yields even lower.


Jobs, Jobs, Jobs

According to the Bureau of Labor Statistics, non-farm payrolls increased 151,000 in January, nudging the unemployment rate down to 4.9 percent but missing market expectations. Despite unemployment hitting the lowest level since February 2008, markets reacted negatively to the miss on Friday. The U-3 unemployment figure, the more widely reported number the government releases, measures the total number of those unemployed as a percent of the civilian labor force. Many economists instead choose to focus on broader measures, such as the U-6 unemployment rate. The U-6 includes those covered in the U-3 measure but also those still looking for work, but discouraged, as well as those employed part-time for economic reasons. This figure was flat for January, holding still at 9.9 percent. On the bright side, there was a slight increase in wage growth which is something economists welcome as it indicates slack in the labor market may be tightening up and inflation expectations may rise.


Central Banks

Central banks across the world are indicating additional monetary actions could be required to boost inflation and spark growth. The European Central Bank, the Bank of England, and the Bank of Japan are just a few that have either hinted at or already taken additional stimulative actions. The Bank of Japan, for example, surprised the markets last week indicating it would begin setting negative interest rates. While both the European Central Bank and the Bank of England have committed to keeping rates low, the European Central Bank has recently hinted more stimulus may be needed to boost inflation in the Eurozone. A reasonable amount of inflation is generally a good sign for an economy. As consumers debate purchases, the thought about whether the good or service will be more expensive in the future may lead them to buy now rather than wait. Slowing inflation could signal a lack of economic growth as fewer goods and services are bought and sold. What central banks desperately want to avoid is a deflationary situation. Whereas consumers may buy now if they believe prices will be higher in the future, the opposite is true when there is deflation. When this occurs, consumers may delay their purchases with the belief prices may continue to slide, further exacerbating an economic slowdown.

Fun Story of the Week

A man named Carl Reese set a new record for driving from Los Angeles to New York City, or 2,829 miles, in just under 39 hours. As remarkable as that may sound, the way he did it is what’s especially noteworthy. Reese broke the record riding on a motorcycle, alone. Only five other people have completed such a feat with Reese doing it in the shortest amount of time. Preparation for such an undertaking involves painstaking planning and some more unorthodox training methods. Reese began working with a therapist to strengthen his back while taking cycling classes to condition his body for the extended bouts on a motorcycle seat. To break the record, Reese averaged 73 miles per hour and, occasionally, exceeded 110 miles per hour while taking just an hour-long nap and bringing easy-to-eat food such as sandwiches and nuts. Known as the Cannonball Run, the less-than-legal “race” from Los Angeles to New York City began in 1914 with Irwin Baker who rode his Indian® motorcycle between the two cities in 11 days, setting the bar for those who have come after him.

Weekly Market Commentary: February 8, 2016

Provided by geralt/Pixabay
Provided by geralt/Pixabay

There was bad news and good news in last Friday’s unemployment report.

In the negative column, fewer jobs were created in the United States than economists had predicted, and January’s jobs gains were not as strong as December’s had been. In addition, the December jobs increase was revised downward from 292,000 to 252,000, according to Barron’s.

On the positive side of the ledger, more than 150,000 new jobs were added in January. The unemployment rate fell below 5 percent for the first time since February of 2008 and earnings increased. In total, average hourly earnings have moved 2.5 percent higher during the past 12 months.

Good news plus bad news equals uncertainty. As we’ve seen, that’s a state of affairs markets strongly dislike. In January, slower growth in China and low oil prices had markets in a tizzy. Last week, the Standard & Poor’s 500 Index gave back more than 3 percent as investors tried to decide whether employment news indicated a rising risk of recession in the United States, according to Barron’s.

When investors are emotional and markets are volatile, it can be helpful to remember the words of Ben Graham, author of The Intelligent Investor, who believed a company’s intrinsic value should be measured by its operating performance rather than its share value. Warren Buffett shared Graham’s thoughts on ‘Mr. Market’ in a 1987 shareholder letter. In part, it cautions:

“…Like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence.”

So, how are companies performing? It depends on which you own but, during the current quarterly earnings season, most companies have reported earnings that exceed expectations. That’s not something that tends to happen during recessions, according to Barron’s.

Data as of 2/5/16 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -3.1% -8.0% -8.9% 7.6% 7.3% 4.0%
Dow Jones Global ex-U.S. -1.1 -8.0 -16.1 -4.0 -3.2 -0.8
10-year Treasury Note (Yield Only) 1.9 NA 1.8 2.0 3.6 4.6
Gold (per ounce) 3.5 8.3 -8.7 -11.8 -3.1 7.3
Bloomberg Commodity Index -2.1 -3.8 -26.2 -19.1 -14.2 -7.8
DJ Equity All REIT Total Return Index -2.4 -5.7 -10.0 7.1 9.4 6.1

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Online Fashion Retailer Nasty Gal Cuts 10 Percent of Staff

Nasty Gal
Nasty Gal

Online fashion retailer Nasty Gal has laid off 10 percent of its staff, as the purveyor of edgy women’s clothing cuts costs amid an uncertain financing and retail environment.

CEO Sheree Waterson told the company in an email that the cuts were necessary as the “market in which we operate is changing, both in retail broadly and apparel specifically.” Nineteen employees across several departments were let go. Nasty Gal also laid off some staff in 2014.

The layoffs underscore the difficulty mature e-commerce startups can encounter as they transition from being a hot new brand to the long slog of building a more traditional retail business. In short, building a retail brand is really hard and technology can only afford you so many shortcuts along the way. Online beauty brand BirchBox announced layoffs of 15 percent of its staff last week, as startups in e-commerce tighten belts as investors become more wary of unprofitable growth.

Nasty Gal was founded by Sophia Amoruso in 2006 as a vintage shop on eBay. Over the years, she grew the Los Angeles-based company into an online business with more than $100 million in sales, fueled by a passionate customer base among millennial women and a strong social media presence where it boasts more than one million Facebook followers and nearly two million on Instagram. The company sells its own line of clothing as well as those of other brands and designers.

Amoruso turned over the CEO role to Waterson in early 2015, saying at the time that the company needed a more experienced leader. Re/code reported at the time that Amoruso had been telling potential investors that 2014 revenue growth would be flat or up slightly. She declined to give an update on 2015 sales figures when asked on Thursday.

Asked if it’s possible that Nasty Gal has hit its ceiling of growth, Amoruso toldRe/code, “We believe that future growth comes from being where our customer is, and that is not purely online. We have two stores and a lot of room to grow.”

The company has raised more than $60 million in venture capital from investors including Index Ventures and former Apple retail chief Ron Johnson.

Written by Jason Del Rey of Re/Code

(Source: Re/Code)

Weekly Advisor Analysis: February 1, 2016

Last week was a busy week in terms of data releases and news. Estimated U.S. gross domestic product (GDP), unemployment data, and the Federal Reserve were just a few headlines that grabbed investors’ attention. U.S. indexes enjoyed another week in the black as domestic indexes surged on Friday. The S&P 500 was up 3.2 percent while the Dow Jones Industrial Average and the NASDAQ were up 3 percent and 2.8 percent, respectively. Internationally, the picture was quite different. The Euro Stoxx 600 index was up 3.77 percent but Chinese equities, as measured by the Shanghai Composite Index, were down 5.63 percent.

Unemployment Figures

The job market continues to look strong here in the United States. The most recent release by the Labor Department indicated initial jobless claims fell 16,000 to 278,000. Economists surveyed by The Wall Street Journal were expecting 280,000 claims. Economists pay close attention to the initial jobless claims because, if they are falling, it frequently means less companies are laying employees off and more are hiring. This is typically good for wages which can lead to more consumer spending and domestic growth. More generally, unemployment numbers usually fall during the fourth quarter of the year as temporary hiring picks up for the holidays. The number then tends to rise in the first quarter of the following year as those temporary jobs are no longer needed.



GDP slowed in the last quarter of 2015. Economists were expecting 0.8 percent growth but the first estimate of fourth quarter GDP was 0.7 percent. GDP results typically go through a number of revisions as the preliminary estimate includes incomplete data. The final figure can be meaningfully different than the first estimate. According to the results, business inventory investment, personal consumption, and trade were the main detractors. The drop-in trade is likely due to the stronger U.S. dollar and uninspiring global growth while the lagging inventory investment and slowing personal consumption could indicate a decelerating domestic economy. On the positive side, residential investment jumped 8.1 percent in the fourth quarter and, by some measures, the housing market in 2015 was the most robust since the recession.

Fun Story of the Week

A team of physicists appear to have cracked a significant roadblock in quantum computing, paving the way for quantum computers that can solve “insolvable” problems. If the physicists are correct, then they have solved the causality problem by using quantum particles that are moving along “open timelike curves.” Theoretically, quantum computers using “closed timelike curves” create causality problems. A more practical (or relatable) example of a causality problem takes place in the Back to the Future movie. Since Michael J. Fox’s Marty McFly went back in time and tampered with the past, he almost caused a new future in which he didn’t exist. The same type of problem happens at the particle level, too. With the “open timelike curves,” the physicists hypothesize, as long as they entangle the time-traveling particles with one in the present, they won’t interact with anything in the past, thus preventing causality problems. Think of this as Marty McFly going back in time, still tied to his present-day “self,” and being able to use that information, but not being allowed to speak with his teenage mother and father or interact with anyone else during his trip. According to their report, while these particles never interact, the nature of quantum mechanics and computing still allows for the solving of impossible calculations. Confused? So am I.

Why Millennials Want to Quit their Jobs

Provided by David Malan

Twenty-eight-year-old Margaret Davis was making nice money as a writer in the legal department of a big pharmaceutical company in New York.

She liked her coworkers and enjoyed the job on a day-to-day basis — except it was not going anywhere.

The company promised Davis an international assignment, but obtaining the right working papers was a problem. Amid management shuffles, Davis felt lost in the system after four years.

As she approached 30, Davis said, “I didn’t really know there were careers in things that were interesting like interior design. . . . It was never a lucrative career choice. But here in New York I realized it can be.”

A few months ago, Davis left her job with plans to study design. In the meantime, she is working at an art gallery, which she finds much more fulfilling.

Davis is not alone. Sixty percent of millennials, ages 22-32, have changed jobs between one and four times in the last five years, according to State Street Global Advisors.

“While pay is important, it’s clear that millennials won’t stay with companies for money alone,” said David Cruickshank, global chairman of consulting firm Deloitte.

Indeed, despite a rocky job market, 44 percent of millennials would leave their current employer in the next two years, if given the choice, according to a new survey from Deloitte. When asked to look four years into the future, 66 percent of millennials said they expect to have switched employers.

Like many members of her generation, Davis has the requisite side hustles, in her case buying furniture on Craig’s List, fixing it up and reselling it. She also walks dogs for extra cash, and is always looking for new income streams.

According to job website Indeed, millennials ages 18-34 make up the largest percentage of working people who look at other job opportunities. In fact, the younger and more educated workers are, the more likely they are actively exploring new opportunities.

“Personal values have the greatest influence on millennials’ decision-making on the job,” Cruikshank said, while also noting that 61 percent of “senior millennials” – those with higher-ranking job titles – have chosen not to undertake a task at work because it conflicted with their values.

Davis does not have to look far for support. Her 27-year-old boyfriend recently left his job at a private equity firm to take a senior role at a startup coffee company in which his former employer invested. While it is still a finance position, he is also building a broad-based skill set as the company rapidly expands, she says.

Davis has no regrets on taking her own leap of faith: “I want my strengths to add value,” she says. “Before I was just lost in a big mix of a big company.”

Written by Bobbi Rebell of Reuters

(Source: Reuters)

Lawsuits Claim Disney Colluded to Replace U.S. Workers With Immigrants

Leo Perrero was laid off a year ago from his technology job at Walt Disney World in Orlando, Fla.
Brian Blanco of The New York Times

ff a year ago from his technology job at Walt Disney World in Orlando, Fla.

Even after Leo Perrero was laid off a year ago from his technology job at Walt Disney World in Orlando, Fla. — and spent his final months there training a temporary immigrant from India to do his work — he still hoped to find a new position in the vast entertainment company.

But Mr. Perrero discovered that despite his high performance ratings, he and most of the other 250 tech workers Disney dismissed would not be rehired for at least a year, and probably never.

Now he and Dena Moore, another American laid off by Disney at that time, have filed class-action lawsuits in federal court in Tampa against Disney and two global consulting companies, HCL and Cognizant, which brought in foreign workers who replaced them. They claim the companies colluded to break the law by using temporary H-1B visas to bring in immigrant workers, knowing that Americans would be displaced from their jobs.

“I don’t have to be angry or cause drama,” said Ms. Moore, 53, who had worked at Disney for 10 years. “But they are just doing things to save a buck, and it’s making Americans poor.”

Dena Moore, another American tech employee who was laid off after years at Disney, said she applied for more than 150 Disney jobs and did not get one.
Brian Blanco of The New York Times

Ms. Moore had also trained her replacement. After she was laid off, she applied for more than 150 other jobs at Disney. She did not get one.

The lawsuits by Mr. Perrero and Ms. Moore, who each filed a separate but similar class-action complaint on Monday, represent the first time Americans have gone to federal court to sue both outsourcing companies that imported immigrants and the American company that contracted with those businesses, claiming that they collaborated intentionally to supplant Americans with H-1B workers.

A furor over the layoffs in Orlando last January brought to light many other episodes in which American workers, mainly in technology but also in accounting and administration, said they had lost jobs to foreigners on H-1Bvisas, and had to train replacements as a condition of their severance. The foreign workers, mostly from India, were provided by outsourcing companies, including the two named in the lawsuits, which have dominated the H-1B visa system, packing the application process to win an outsize share of the quota set by Congress of 85,000 visas each year.

The Labor Department opened investigations of the outsourcing companies — the direct employers of the temporary immigrants — at Disney and at Southern California Edison, a utility that laid off hundreds of American workers in 2014. The investigations are continuing. At least 30 former Disney workers also filed complaints with the federal Equal Employment Opportunity Commission, claiming that they faced discrimination as American citizens.

The lawsuits by Mr. Perrero and Ms. Moore are based on the rules for H-1B visas, which were designed by Congress to bring foreign workers with special skills into the country. Employers are required to declare to the Department of Labor that hiring foreigners on the visas “will not adversely affect the working conditions of U.S. workers similarly employed.”

“Was I negatively affected?” Ms. Moore asked. “Yeah, I was. I lost my job.”

Sara Blackwell, a lawyer in Sarasota representing the former Disney employees, said the suit charged that the companies lied under oath when they said that no Americans would lose their jobs.

Disney has vigorously denied any violations, saying it requires its contractors to obey all laws. Disney has said all but 95 of the tech workers laid off in Orlando were rehired to other positions or moved on voluntarily. Last year, it canceled 35 layoffs scheduled in other areas of the company.

HCL and Cognizant have said that they carefully comply with United States laws. Cognizant has said that it employs many thousands of Americans in this country, with H-1B workers only a minority of its labor force.

Responding to the frustration of American workers, Congress in December renewed and increased a fee on outsourcing companies that it had allowed to lapse. Larger companies employing many H-1B workers in the United States will pay an extra fee of $4,000 for each new H-1B visa — up from $2,000 — and another $4,000 to move an H-1B immigrant who is already in the country to a new employer.

Senator Bill Nelson of Florida, a Democrat who has been openly critical of Disney’s layoffs, offered a bill to reduce the H-1B quota by 15,000 visas a year to 70,000. The issue came up in the presidential race, as Senator Ted Cruz of Texas, a Republican candidate, introduced a bill with Senator Jeff Sessions of Alabama, a Republican hard-liner on immigration, to sharply increase the minimum wage for H-1B workers to $110,000 a year, to discourage outsourcing companies from using the workers to lower wages.

The Institute of Electrical and Electronics Engineers, an international association of tech workers, posted an online petition to encourage Americans who were displaced to file complaints with the Justice Department. In a letter to the group in December, Alberto Ruisanchez, a Justice Department lawyer in charge of prosecuting immigration abuses, confirmed that it would be a violation of anti-discrimination laws for an employer, or a contracting firm, to fire workers or hire replacements “because of citizenship or immigration status.”

Mr. Perrero, like many Americans who have lost their jobs, said he was long reluctant to speak out publicly against his former employer. At 42 and with a family to support, he worried that he would not find another job in Orlando, where Disney rules as the largest employer by far. He spoke with The New York Times anonymously in an article in June about the humiliation of training his foreign replacement.

But local recruiters told him that despite the company’s statements, Disney managers said they would avoid rehiring workers who were laid off. Mr. Perrero said he knew of only two workers from the close-knit group of more than 200 who were dismissed who went back to tech jobs at Disney.

Mr. Perrero said he was “part Italian, part English, part Swedish.” He said, “I wholeheartedly believe our country needs to have amazing people come here to build a long-term foundation.” But he said the H-1B program had been abused.

Ms. Moore said that even with strong programming credentials, it was hard for her to start over in her 50s with another company. She has 13 grandchildren, and she confessed that one of the difficult losses was a pass that allowed her to take them to Disney World at no cost.

Written by Julia Preston of The New York Times

(Source: The New York Times)