Archive - Aug 5, 2011

Goldman has kept mostly mum about tomorrow's NFP number for one simple reason: the BLS apparently has not leaked it to anyone, which explains why a rumor leaked by Larry Kudlow of all people has the power to move the EURCHF by 100 pips. Should tomorrow's BLS surprise there is just one conclusion that can be derived: any concerns of data leak from the BLS can be discarded. Which probably means that the NFP will be inline. Or not. As Goldman's Andrew Tilton explains there are just as many potential upside catalysts as downside, namely (to the upside) i) Jobless claims have moved lower since early July, ii) The Institute for Supply Management (ISM) nonmanufacturing employment index has held up, iii) The ADP employment report was reasonably healthy, while on the converse side we have i) Companies have begun to pull job advertising, ii) Manufacturing employment looks shaky, iii) Layoff announcements picked up in July. Taken together one can see why the Fed can push the data in either way, and the conclusion is that if the Fed wishes to pre-announce QE3, the NFP will be a major disappointment to where not even the robots can levitate the market higher, while on the other hand if Bernanke and kleptocratic company wish to extend and pretend for another two weeks in hopes that Mars, Alpha Centauri or Kang and Kodos will descend with an endless Jack in the Box full of Bernankebux, then it will print well over 100k. Alas, since every piece of news lately has been sold off we believe even a sizable beat will result in only a modest upside following by a massive fade, as the market refuses to rally without some evidence of QE3. Either way, for those who care about Goldman's thought, here they are, 5 short hours before the real deal.

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