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Bull/Bear Weekly Recap: Mar 28-Apr 1

Tyler Durden's picture





 

From Rodrigo Serrano of RCS Investments

Bull/Bear Weekly Recap: Mar 28-Apr 1

Bull

+ The job market continues it’s healing process as the Monster Employment Index, ADP Payroll, Chicago PMI, and BLS job reports show palpable improvement.  The Monster Employment Index shows that job demand remains on the rise and signals that improved job numbers are in store
The BLS jobs report shows back-to-back 200+ gains in job creation for
the first time in the recovery.  The unemployment rate falls further. 

+The S&P500 is showing strong breadth
in the latest rebound and supports the case that the bull market
remains healthy.  Meanwhile, the Dow Jones Transports and Industrials
burst through resistance and they are now at new bull market highs. 
According to the Dow Theory, the bull market has more to run. 

+ The March Chicago PMI
report shows that the manufacturing sector continues to grow.  Order
backlogs hit their highest level since 1974 and bodes well for continued
demand growth going forward in the mid-west.   Employment is also
soaring, hitting its highest level since February 1973.  This has
translated to a healthy ISM reading.  The expansion in the manufacturing sector has entered its 20th consecutive month.

+The Conference Board’s European Leading Economic Index hits an all-time high and points to continued expansion in the Eurozone.  German and French economic metrics are pointing to better confidence and improved business conditions.  The Euro has been rallying as a result. 

+ Chinese PMI indicators increase,
thereby decreasing concerns that the country is in for a hard landing. 
“Today’s data from China’s logistics federation showed output, orders
and export orders grew at a faster pace in March than in February. Input
prices rose at a slower pace, the survey suggested.” — Bloomberg.  The
economy has withstood tightening by officials.  Growth is stronger than
the bears think.   

+ Business conditions are certainly improving.  People are dining out and restaurants are reporting improved business conditions.  CEOs are seeing better times ahead.  State tax revenues are increasing again showing tangible improvement in the US economy. 

Bear

- Consumer confidence continues to deteriorate by posting its largest drop in over a year.  Rising oil and food prices are to blame (QE3 looks less likely),
while stagnant wages (due to a high unemployment rate) result in less
disposable income for households.  In an ominous sign for the job
market, consumers views of job availability & income growth expectations declined.  I had warned (see my outlook: “Consumer Confidence” section) how a quick rise in gas prices could dent confidence as the year wore on. 

- Where’s all the good news coming from with regards to the
Eurozone?  From the core countries: Germany and France.  The periphery,
however, is in worsening shape.  Portugal revises
its budget deficit from 7.2% to 8.6% complicating a hefty 3 month
repayment schedule on the horizon.  Meanwhile, Ireland’s financial
industry is in shambles.  Both country’s yield spreads compared to
German bunds are near records.   Meanwhile inflation is becoming an issue and the ECB is about to raise interest rates.  How is this suppose to improve the periphery’s problems?

- Housing prices continue their double-dip, precisely as I had forecast as early as mid-last year.  Most bank balance sheets are not prepared for a renewed decline in home prices.  Note that financial ETFs seemed to have double-topped.  (see bottom of report)

-  The noose around the economic recovery is growing tighter as oil has broken through $107/barrel.  Libya’s civil war may be a long one.   Meanwhile, the Chicago PMI commentary from the survey panel shows
that inflationary pressures are quickly building and are resulting in
margin squeezes/passing costs to customers (can the consumer handle
higher prices right now?).  Japan’s earthquake is also to blame as it
has resulted in a supply shock. 

-  While the headline may read “Weekly jobless claims dip 6,000 to 388,000
a closer look at the data (or actually reading the article) shows that
the previous week was revised up from 382,000 to 394,000, a pretty big
jump.  The 4-week average inched higher to 394,250.  The labor market
remains quite weak, especially considering how long this “recovery” has
been. 

-  The fallout from the Japanese earthquake begins to hit the economic indicators.  After initial investor giddiness that Japan would see a V-shaped recovery, reality seems to be setting in.

 


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Fri, 04/01/2011 - 17:27 | Link to Comment hambone
hambone's picture

Bear (or Bull???) - volume today on first day of qtr and NFP was pathetic.  Not sure anymore if this is bearish (lack of participation) or bullish (easier to manipulate) but volume seems lower every week?

Fri, 04/01/2011 - 17:23 | Link to Comment LongSoupLine
LongSoupLine's picture

jobs improvement?

 

3 words - Labor Participation Rate

economic improvement?

3 more words - Record Food Stamps

Fri, 04/01/2011 - 17:49 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Record Food Stamps .... Get the fucking " undocumented immigrants " of all stripes off that gravy train, a ton of the bum's that had the construction jobs in Illinois were illegals, now they sip the tit' of said taxpayer ...

And a shout out to all the brothas and sistas rock'n the food stamps for years and the liquor store owners double dipping • creating false customers for said profit ....

All this makes that food stamp chart look like a triple black diamond at telluride ....

Fri, 04/01/2011 - 18:30 | Link to Comment hambone
hambone's picture

not worth reply

Fri, 04/01/2011 - 18:39 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Look it up moron, ... the truth.

 

I am undocumented. Will I be reported to the immigration authorities if I apply for food stamps for my children?
The food stamps office only has to report you to the immigration authorities if it has proof (such as a final order of deportation) that you are in the country unlawfully. You should not tell anyone that you or someone in your family is undocumented. If you are not seeking food stamps for yourself, you do not need to give information about your immigration status, and should not present a false or invalid Social Security Number. But you will need to give information about your earnings or any property you may have, like a car. You should tell your food stamp worker that you are not trying to get benefits for yourself, and that you are not a “qualified” or “eligible” immigrant. “Not qualified” or “not eligible” is not the same as undocumented.

Remember, it is illegal for the government to treat you differently just because of the way you look or because you are from a particular country. Your caseworkers are not supposed to ask you any further questions about your immigration status once you tell them that you are not applying for food stamps for yourself. If you have questions, call one of the numbers below to find out how to get help.

 

http://www.nilc.org/ce/nonnilc/imm_eligibility_food_stmps_CA_2006-1-11.p...

Fri, 04/01/2011 - 17:42 | Link to Comment JPM Hater001
JPM Hater001's picture

I think it is interesting that manufacturing is moving as is transports and industrials.  Now, don't those sound like a good idea of stuff away for a raining day...say, after inflation burns a hole in the economy? 

 

Kind tired of hearing about the job numbers manipulation.  Most people arent even including those who have given up.  Again...Williams is the man for tracking that sh!t too.  More like 21% .

 

Thankyou- please buy physical silver and crash the JP Morgan.

Fri, 04/01/2011 - 17:49 | Link to Comment Irwin Fletcher
Irwin Fletcher's picture

Bullish: More Americans now have jobs and record numbers of Americans are now on food stamps. This will result in record spending of newly created disposable income.

Bearish: Your local taxpayer-funded state U will pay Snooki $32K to tell its students to study hard but party harder.

http://www.nbcnewyork.com/news/local/Snooki-Gets-32K-to-Dish-on-Jersey-S...

Fri, 04/01/2011 - 18:32 | Link to Comment snowball777
snowball777's picture

Just think how many you could take out with a smidge of Polonium-210 in the bronzer supply.

Fri, 04/01/2011 - 18:51 | Link to Comment Yen Cross
Yen Cross's picture

You safe?

Fri, 04/01/2011 - 17:51 | Link to Comment Frank N. Beans
Frank N. Beans's picture

agree with long soup line.  participation rate, bitchez, coming down. 

Fri, 04/01/2011 - 18:06 | Link to Comment russwinter
russwinter's picture

 

In checking with corporate tax collections at the US Treasury "Daily Statement" a swoon is already well underway. $36.04 billion was collected in the January 1- March 31 period versus $52.34 billion in the same period last year. This would have to reflect a massive input costs profit squeeze has taken hold. 

 

http://seekingalpha.com/article/260106-corporate-profitability-squeeze-i...

 

Fri, 04/01/2011 - 18:16 | Link to Comment magpie
magpie's picture

Always been a bummer, that. Debase the coin of the realm and then it finds it way back to your tax collectors, at least partially.

Fri, 04/01/2011 - 18:46 | Link to Comment Yen Cross
Yen Cross's picture

I have the matching Branding Iron. It was reckless. However I smoked GBP/JPY!

Fri, 04/01/2011 - 20:51 | Link to Comment KickIce
KickIce's picture

I think QE3 is all but guarenteed.  In typical politician fashion they will attempt to kick the can down the road to the very end.

Fri, 04/01/2011 - 23:37 | Link to Comment Yen Cross
Yen Cross's picture

It will be a q-3 long term bond repatriation. The money supply stays large, and the yield curve stays flat.

Sat, 04/02/2011 - 08:31 | Link to Comment Note to self
Note to self's picture

Its the price of oil, stupid.

Sat, 04/02/2011 - 10:33 | Link to Comment bb5
bb5's picture

The dow's recovery high close was 12,391.29 for those interested in Dow Theory.

Sat, 04/02/2011 - 11:15 | Link to Comment 99er
99er's picture

Weekend Charts

http://www.zerohedge.com/forum/99er-charts-0

Have a good one!

 

Sun, 04/03/2011 - 00:37 | Link to Comment Grand Supercycle
Grand Supercycle's picture

COPPER has ignored the recent equity bounce. Daily and weekly charts are not bullish.

Oh and this too...

http://wp.me/pTrb8-1kx

Sun, 04/03/2011 - 08:56 | Link to Comment 99er
Do NOT follow this link or you will be banned from the site!