Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: gregor_us who wrote (1255)	3/5/2004 10:39:14 AM
From: mishedlo	Read Replies (2) of 116555

Brian Reynolds on Employment Numbers Payroll employment rose 21k, far below the published Bloomberg consensus of 130k, and the whisper numbers that we had put in the 175-200k range. Downward revisions to the two prior months brought the number down to 132k below the published consensus. A look at the hours worked data reveals the number to be as weak as the headline implies, and is consistent with our view that the outpacing of consumption by production is making it difficult to get a sustained surge in employment. While we wrote that we had no special insight into what this particular number would look like, we did note that, the bigger the whisper number, the more room for disappointment there was. Over the last week, we noted that back-month Fed Funds futures contracts had risen 11 basis points on the thought that a strong number would accelerate a Fed tightening. This number has removed all of those fears; the back month contracts' implied yields are down 14 basis points, more than erasing the tightening fears of the last week. With so many investors counting on a strong number, the 10-year Treasury is again putting in a stellar performance off a soft payroll number. It is up a 1 and 3/4 points on the day and is currently trading below the 3.93% level that, if it holds and continues, would be expected to boost mortgage refinancings. Stock futures have plummeted, so we will have to see if the change in the bond/stock relationship is stretched enough to attract asset allocators into stocks from bonds. =================================================== Hmmmm Stock futures have plummeted, so we will have to see if the change in the bond/stock relationship is stretched enough to attract asset allocators into stocks from bonds. Looks like it. Nice snapback rally Mish

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