Non-Farm Payrolls -48k BAD IS GOOD?
- Thread starter Point Man
- Start date
Quote from spreadbet:
Will the USA cut interest rates and taxes to stimulate the economy before the next elections. Perhaps the markets will factor in these variables.
Cheers
spreadbet
Bush is a man that lost the vote, but won the election. This man will do anything he can to achieve what his father could not. A 2nd term.
IMHO:
There are two noteworthy facts in the unemployment report:
1. In April, the number of unemployed workers surged to 8.8 million, with almost 2 million without jobs for 27 weeks or more. US average duration of unemployment shot up to 19.6 weeks - a 20-year high.
2. April's job losses were the third in a row, which never occurs outside of recessions.
However, the stock market did very well on Friday. Maybe these bad data have been discounted already.
I think the market is reacting to the weaker dollar. Weaker dollar means all those mega-cap US Stocks that earn big chunks of their earnings abroad get a massive currency translation boost to their earnings this year.
=> "market positive"
At the same time people believe inflation is dead and that the devaluation of the dollar doesn't imply significantly higher interest rates.
=> "market positive"
The market mood will change when that scenario no longer works, ie the dollar overshoots to low side or somehow regains its strength.
Right now all the TV talking heads can point to climbing the wall of worry, better outlook etc but its really just the effect of currency devaulation and plenty of "me-too" longs...
Q1
=> "market positive"
At the same time people believe inflation is dead and that the devaluation of the dollar doesn't imply significantly higher interest rates.
=> "market positive"
The market mood will change when that scenario no longer works, ie the dollar overshoots to low side or somehow regains its strength.
Right now all the TV talking heads can point to climbing the wall of worry, better outlook etc but its really just the effect of currency devaulation and plenty of "me-too" longs...
Q1
The weakness was related mostly to tourism-related layoffs and some automotive-based layoffs as well. Not seen as endemic to the broad-based manufacturing economy. Bond dealers have economists that are sifting through these report revisions and notations as they come out on the Bloomberg and telling their guys on a squawk to buy or sell. I sold into the original pop in the ten-year notes and sat with it.
Whenever you see a market react to economic news in a way you don't expect - go with it and don't fight it. It's a more powerful indicator than anything else in your toolbox.
All in all, there wasn't anything to discount further into the equity market. We are still pricing out risk premium from the last 2.5 years. The Fed's internal econometric model - flawed or not, says that the S&P index is undervalued. Big money is buying these dips, and daytraders are selling into them. These slow, deliberate, grinding higher rallies after a selling spike are the most potent kind. Thursday told me all I needed to know for Friday. Opened down hard and crawled right back the rest of the day. Ditto for Friday. Let the market tell you where it wants to go.
Whenever you see a market react to economic news in a way you don't expect - go with it and don't fight it. It's a more powerful indicator than anything else in your toolbox.
All in all, there wasn't anything to discount further into the equity market. We are still pricing out risk premium from the last 2.5 years. The Fed's internal econometric model - flawed or not, says that the S&P index is undervalued. Big money is buying these dips, and daytraders are selling into them. These slow, deliberate, grinding higher rallies after a selling spike are the most potent kind. Thursday told me all I needed to know for Friday. Opened down hard and crawled right back the rest of the day. Ditto for Friday. Let the market tell you where it wants to go.
Amen Brother an actual reason with the laws of supply and demand behind them.
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I think the market is reacting to the weaker dollar. Weaker dollar means all those mega-cap US Stocks that earn big chunks of their earnings abroad get a massive currency translation boost to their earnings this year.
=> "market positive"
At the same time people believe inflation is dead and that the devaluation of the dollar doesn't imply significantly higher interest rates.
=> "market positive"
The market mood will change when that scenario no longer works, ie the dollar overshoots to low side or somehow regains its strength.
Right now all the TV talking heads can point to climbing the wall of worry, better outlook etc but its really just the effect of currency devaulation and plenty of "me-too" longs...
Q1
____________________________________________________
I think the market is reacting to the weaker dollar. Weaker dollar means all those mega-cap US Stocks that earn big chunks of their earnings abroad get a massive currency translation boost to their earnings this year.
=> "market positive"
At the same time people believe inflation is dead and that the devaluation of the dollar doesn't imply significantly higher interest rates.
=> "market positive"
The market mood will change when that scenario no longer works, ie the dollar overshoots to low side or somehow regains its strength.
Right now all the TV talking heads can point to climbing the wall of worry, better outlook etc but its really just the effect of currency devaulation and plenty of "me-too" longs...
Q1
Bone,
No wonder you left the floor. You're way to sharp to put up with BS from the Kerrigans and Hardy's of the world! Excellent post!! Not a writer around who could have nailed the scenario down like you just did. Wish I hadn't wasted the last twenty years by not caring to understand that there's two sides to every transaction on the tape.