InvestmentHouse Weekend Market Summary
investmenthouse.com
- A solid jobs report reflects the economic improvement, but stocks did not buy into it, at least on Friday.
- Rare revisions to the unemployment rate, the simple are you employed or not survey, raises eyebrows and questions about data accuracy and perhaps explains the market's lukewarm response.
- Dollar and bonds still acting as a safe haven for European funds.
- Stocks close the week with a flat session, unable to build upon the Tuesday, start of the year rally.
- Boat show indicator starts to turn positive but job cuts in 2012 are already high.
- Market still sports many levels of positive patterns supporting a continued move toward the prior highs.
Cool response to a decent jobs report suggests investors don't believe everything they are told in an election year.
Looking at the morning chart of the SP500 futures, you would not have thought a good jobs report was released. Looking at the chart of the day, it also does not look like much is happening. SP500 actually closed lower on the session. That somewhat belies a jobs report that was solid. It was not great, but it was pretty good. It topped expectations at 200K nonfarm payrolls, 50K more than originally anticipated. There was a revision to the downside in November by 20K. When you factor in some upside revisions in October, it was just an 8K job write down between the two months. The nonfarm private payrolls topped expectations, coming in at 212K. That topped the 170K expected. The prior month was also revised down to 120K from 140K.
The unemployment rate dropped 0.2% to 8.5% after it was revised up to 8.7% in November. It is rare to have an upside revision. It is strange because the unemployment number is completely based on a household survey. What reason would there be to revise when it is based on actual calls they made? That put the entire read of the unemployment rate into an even more skewed and skeptical eye than usual. A lot of people think there is some monkey business going on with the employment data. It just so happens that we get into an election year and suddenly the unemployment rate drops substantially below 9%, where it has been for years. It was pretty strange to have a revision, even if it was to the upside. As noted, it brought some skeptics out, and that was reflected in the morning action... |
