After two highly anticipated central bank announcements we conclude the week with the, almost overlooked, jobs report.
The markets were looking for the easy way out this week. They were rooting for more QE from the FED and that did not come to fruition. They anticipated Draghi to come through on his bold talk from last week and he ended up letting everyone down. Perhaps a big jobs number tomorrow will break this four day losing streak for stocks?
This market could read a solid jobs number as bad news. The FED needs worsening data to implement more QE. A good jobs number will further muddy the QE outlook. A bad jobs number will certainly bolster the case for more QE. I have a very simple two word term for the current market we trade in —– ass backwards.
You could see it all week, the market was not trading based on anything other than what the central banks were going to do next. Stocks limped along all week until 2:15 yesterday when Ben Bernacke decided to wait until September to do another unsuccessful round of money printing.
The ECB President Draghi showed he’s all talk today and in the process lost his credibility. He’s the big bully in middle school who thought he could kick everyone’s ass, but ends up getting kicked in the balls by the school nerd.
On Friday August 3, 2012, the July jobs report will be released at 8:30am EST. The consensus estimate for the jobs number has the US gaining 100,000 jobs in July 2012. The estimate for the unemployment rate is 8.1%.
Again, like Wednesday and Thursday, we could see some fireworks post jobs number. We get a bad number the dollar will weaken and stocks will hold their ground an possibly rally. If we get a good number the dollar will gain strength and stocks will likely fall.
A very nice article in the New York Times regarding tomorrows NFP. http://economix.blogs.nytimes.com/2012/08/02/beware-the-jobs-report-of-july/
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