The main
stream press is reporting that worse than expected unemployment
numbers and an announced revision to last years numbers by
BLS are the real cause of the marekt correction of the last
week or so.
This isn't
helping to be sure, but the foul wind is blowing from Europe. The
question is: will this wind give the bear market rally
here just a cold or is this a longer term trend reversal that
would cause us to consider being defensive at this point.
This could be
just a correction/consoladation similar to what occurred in
spring of 2003, or it could be the start of a new deflationary
round of lower prices in everything but the dollar.
In spring of
2003 markets had to process the uptrend that had occurred to
that point before moving higher (see attached SP500 chart). We may
be going through the same digestive process, especially when you
consider that company earnings have been very good for the most
part (even if much of these earning gains have been garnered at the
expense of employment).
http://pragcap.com/mutual-fund-flows-support-a-bullish-thesis
http://www.cnbc.com/id/35235026
The bearish
argument would point out that there are many more issues for the
market to digest now in 2010 than back in 2003. The bullish
argument would point out that company earnings will be strong until
the end of Q2 and would argue for an upside potential of 1220 on
the S&P500. The data and the market action are
inconclusive right now. More will be
revealed tommorrow:
Bottom line: we are not changing our fundamental
view and stay overweight
equitiestargeting 1,220 on the s&p by mid-2010. We admit
that near-term pressures remain: (i) worries about China’s
“tightening”- which we think are exaggerated, (ii) Greece (and rest
of peripheral Europe)- we have been negative on peripheral Europe
for a while, especially Spain (we would u/w domestic Spain); (iii)
Obama’s proposal on banks (uncertainty unnerves investors, we are
underweight Eur banks). We would buy equity on dips, especially
plays on Chinese consumer (e.g. luxury goods).
COMMENTARY NUMBER 275
Employment Outlook Update, New Site Feature
February 3, 2010
Payroll Employment and Unemployment Rate (January
2010). This brief
Commentaryis the promised update to the outlook for the
January employment and unemployment data, due for release by the
Bureau of Labor Statistics (BLS) on Friday, February
5th. Briefing.com shows consensus expectations of roughly a
13,000 jobs gain (down from a 50,000 jobs gain expected a week
ago), following an 85,000 jobs loss in December, with the
unemployment rate holding at 10.0%. Generally, I still look
for weaker-than-expected numbers, with a rising unemployment rate
and a negative payroll change, although revisions pending to both
series in Friday’s release allow for unusual variability and
volatility in the headline numbers.
As to seasonally-adjusted monthly payroll-employment change,
keep in mind that the 95% confidence interval for the headline jobs
change is +/- 129,000, so anything between a jobs loss of 116,000
and a gain of 142,000 statistically would be consistent with the
consensus outlook. Suggestive of unusual activity in the
reporting system, however, the headline jobs-change number usually
comes in amazingly close to consensus.
The community is delayed by three days for non registered users.
look out below - on a bounce I'm adding shorts
Gold - Breaking down Again!!
Posted by macnsc on 4th of Feb 2010 at 02:19 pm
uup isn't really breaking out at 23.50
The dollar
Posted by macnsc on 4th of Feb 2010 at 02:15 pm
Long term dollar long
short gold?
Title: markets are under severe
Posted by macnsc on 4th of Feb 2010 at 01:36 pm
markets are under severe deflationary pressure today due to what is now being called "the S.T.U.P.I.D.S" by financial insiders. This is an acyronym for Spain, Turkey, UK, Portgual, Italy and Dubai (but Greece should be in there somewhere as well). These are the countries that are in real danger of defaulting on their debt. A website called Zerohedge ( http://www.zerohedge.com/article/its-chart-stupid ) has come up with a chart showing the rising costs of CDS's (credit default swaps) that are used to insure bonds against default. These costs are skyrocketing and are a leading indicator of the possibility of defaults occuring. http://blogs.wsj.com/marketbeat/2010/02/04/whos-next-spain-italy/ http://seekingalpha.com/article/186193-why-sovereign-debt-is-a-european-union-problem?source=hp
http://pragcap.com/mutual-fund-flows-support-a-bullish-thesis
Posted by macnsc on 4th of Feb 2010 at 01:23 pm
Bottom line: we are not changing our fundamental view and stay overweight equitiestargeting 1,220 on the s&p by mid-2010. We admit that near-term pressures remain: (i) worries about China’s “tightening”- which we think are exaggerated, (ii) Greece (and rest of peripheral Europe)- we have been negative on peripheral Europe for a while, especially Spain (we would u/w domestic Spain); (iii) Obama’s proposal on banks (uncertainty unnerves investors, we are underweight Eur banks). We would buy equity on dips, especially plays on Chinese consumer (e.g. luxury goods).
wake me when we're at ZERO!
McHugh just in
Posted by macnsc on 4th of Feb 2010 at 11:53 am
For internet (and power) emergencies I keep a small notebook around
Quick Comment (update)
Posted by macnsc on 4th of Feb 2010 at 11:41 am
with a sprint wireless card so I have a usable fall back machine.
Philip Davis is a hoot sometimes
Posted by macnsc on 4th of Feb 2010 at 11:26 am
http://seekingalpha.com/article/186642-thursday-preview-greece-is-the-word
vix launched this morning right out of the gate...
Posted by macnsc on 4th of Feb 2010 at 11:20 am
no kidding
The Market
Posted by macnsc on 4th of Feb 2010 at 11:06 am
I think this might be the start of the real dollar rally and the end of
Posted by macnsc on 4th of Feb 2010 at 11:01 am
i agree - this is being driven by more than the unemployment numbers
FWIW
Posted by macnsc on 4th of Feb 2010 at 10:45 am
Matt - with the gap down
Posted by macnsc on 4th of Feb 2010 at 10:21 am
how is your analysis changed from last night's update.
dollar - gold intermediate term?
Did gold really go down? Gold Price
Posted by macnsc on 4th of Feb 2010 at 10:13 am
go down?
its a revised number from March 08 to april 09 only
The friday labor report with the birth death model
Posted by macnsc on 4th of Feb 2010 at 09:57 am
they aren't planning to revise the methodology
Blackrock working for Tiny Tim and the PPT???
Posted by macnsc on 3rd of Feb 2010 at 02:52 pm
http://jessescrossroadscafe.blogspot.com/2010/02/why-is-blackrock-broadly-buying-big.html
that's what John Williams at Shadowstats keeps harping on
U.S. May Lose 824,000 Jobs as Employment Data Revised: Analysis ...
Posted by macnsc on 3rd of Feb 2010 at 02:22 pm
that the BLS has to get rid of the birth/death model...
exactly - so what are they hiding in the data this week!
U.S. May Lose 824,000 Jobs as Employment Data Revised: Analysis ...
Posted by macnsc on 3rd of Feb 2010 at 02:13 pm
compq goes green
Posted by macnsc on 3rd of Feb 2010 at 02:09 pm
Title: Friday Jobs - better
Posted by macnsc on 3rd of Feb 2010 at 02:07 pm
JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS
COMMENTARY NUMBER 275
Employment Outlook Update, New Site Feature
February 3, 2010
Payroll Employment and Unemployment Rate (January 2010). This brief Commentaryis the promised update to the outlook for the January employment and unemployment data, due for release by the Bureau of Labor Statistics (BLS) on Friday, February 5th. Briefing.com shows consensus expectations of roughly a 13,000 jobs gain (down from a 50,000 jobs gain expected a week ago), following an 85,000 jobs loss in December, with the unemployment rate holding at 10.0%. Generally, I still look for weaker-than-expected numbers, with a rising unemployment rate and a negative payroll change, although revisions pending to both series in Friday’s release allow for unusual variability and volatility in the headline numbers.
As to seasonally-adjusted monthly payroll-employment change, keep in mind that the 95% confidence interval for the headline jobs change is +/- 129,000, so anything between a jobs loss of 116,000 and a gain of 142,000 statistically would be consistent with the consensus outlook. Suggestive of unusual activity in the reporting system, however, the headline jobs-change number usually comes in amazingly close to consensus.
tick just jumped
Posted by macnsc on 3rd of Feb 2010 at 01:38 pm