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Benkea, Joey will be right until proven wrong by the market...we have to recognize the fact that FUNDAMENTALS DO NOT COUNT IN A MANIA. in all likelihood, the markets will rally tomorrow regardless of the jobs data (if they are viewed as bullish we will rally very strongly, if not maybe a bit less so), simply because there is money out there that can be thrown at the market. at least that's how the bulls probably see it, thus the buying late in the day. however, there are certain signs on the horizon that may still upset that rosy scenario. the NAPM report suggested that there is strength in the manufacturing sector, and the jobs data should reflect that. since manufacturing jobs tend to be better paid than service industry jobs, the wage component of tomorrows report may well deal another blow to the bond market. the bond market is not far from recent lows, and i suspect that a break of these lows would result in follow-through selling. at the same time, earnings warnings have become more frequent of late. if indeed earnings are starting to come under pressure in general, and non-WS data suggest that they are, corporations may be forced to raise prices to defend their margins, which in turn would add to the inflationary pressures already apparent. therefore, even if the market were to stage a relief rally tomorrow, it will not escape the facts forever. i know i said at the beginning that fundamentals don't count anymore, and the truth of this statement is self-evident when one looks at valuations. but at some point there comes the straw that breaks the camel's back, often from an unexpected source. i have an inkling that the next CPI will also be a bit less friendly than the markets would like, if only for the increase in tobacco prices<g>. what continues to amaze me is that the stock market still hasn't got the message...after all, we are barely off record highs. didn't someone say 'don't fight the Fed' when they were cutting rates last year? i believe it was Joey... |
