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Non-Farm Friday – Finally Good News Can Be Good News Again

ilene's picture





 

Non-Farm Friday – Finally Good News Can Be Good News Again

Courtesy of Phil’s Stock World

Now that we have QInfinity, it’s OK to have a good jobs report.

 

ntemploy Non Farm Friday  Finally Good News Can Be Good News Again

[Image from Briefing.com]

Previously in the market, bad news has been good news as poor jobs growth put the Fed “on the table.” But now that the Fed has committed to QE, more QE and, failing that, MORE QE – it’s finally OK to have a good jobs report.

Last month we had terrible August Job numbers with just 103,000 jobs created in the US. It was very disappointing, even though Aug 2011 was 96,000 jobs and Sept 2011 was even lower at 85,000 jobs. So we have very low expectations of 115,000 jobs for this September. Anything over 150,000 jobs would be an upside surprise, and unemployment falling below 8%, will be trouble for Mitt Romney.

 

nonfarm Non Farm Friday  Finally Good News Can Be Good News Again

[Image from Briefing.com]

 

The reality is, we are currently creating jobs at a pace not seen since the first half of the last decade before the Bush tax policies kicked in and shifted capital investing away from production and into financial instruments and commodities.

Perspective is very hard to come by in America and we have very short memories – especially when it comes to jobs because 30M Americans didn’t lose their jobs overnight. Even with the monthly job losses of over 400,000 a month during the crash – it still took YEARS of losing 100,000 here and 200,000 there coupled with anemic gains for us to get into the mess we’re trying to work our way out of today.

 

privatejobgrowth Non Farm Friday  Finally Good News Can Be Good News Again

[Image from DailyKos]

 

Since January, 2011, over 4M jobs have been added in 20 months but, unfortunately, we need 3M jobs just to keep up with normal population growth (1.5%/yr) over that time so the extra 1M jobs is just a drop in the bucket when it comes to reversing the damage that’s already been done to America. This is why it terrifies me that Romney wants to go back to “the good old days” – they weren’t actually very good for middle-class Americans, were they?

Barack Obama is about 300,000 jobs away from avoiding being the second President in 50 years to have a negative jobs number for a full term – considering the month he took office we lost 900,000 jobs that were charged to him, that’s pretty good but, as I said, not good enough – we need Bill Clinton numbers (22.7M jobs in 8 years) just to get America working again.

8:30 am Update: This is interesting, only 114,000 jobs were created yet unemployment has plunged to 7.8% as the number of unemployed people dropped by over 400,000.  The number of people who are employed rose by 879,000 but the U6 Unemployment rate is flat at 14M. The employment-population ratio increased by 0.4 percentage point to 58.7 percent, after edging down in the prior two months. The overall trend in the employment-population ratio for this year has been flat. The civilian labor force rose by 418,000 to 155.1 million in September, while the labor force participation rate was little changed at 63.6 percent.

Some of the revisions to March unemployment (300,000+ improvement) are filtering through to this report so our overall civilian workforce is up nicely (155.1M/63.6% of adult population working) and, although it’s not being counted as jobs created, the effect on unemployment is severe. This is not, as far as I can tell, a BS number – this is a fairly significant improvement in our overall jobs picture.  The biggest flaw I can find is a disturbing 600,000 increase in people working part-time for economic reasons (they would rather have a real job) – now at 8.6M.

As I write (8:55 am), money is flying out of bonds and will likely plow into the stock market today – essentially we just found 873,000 more people who can afford an IPhone – and that’s going to count for something in the Appleconomy. We’ve been leaning bullish but maybe not bullish enough – we’ll have to see if the Dow can clear 13,600 and hold it on this news – at the moment, the Futures are up 50 points. Europe is loving the numbers and EU markets are up about 1% and trading at the day’s highs into the US open. Even better, the BOJ has switched to buying Euros today and that’s keeping the Dollar low despite the jobs gains (more demand for dollars to pay people with) and the Yen is at 78.77 with the Euro at $1.304 and the Pound at $1.621 and that leaves the Dollar in the dust at 79.30, down 1% for the week–lifting stocks and commodities, which are priced in Dollars.

Although more jobs should be good for oil, we lost interest on yesterday’s bullish oil plays as our USO calls tripled and, of course, the Futures trade (/CL) took us from $88.50 to $91.50 and $3,000 per contract is A LOT of money to make in an oil trade – especially as it’s the second time this week as we caught it going the other way as well. Not worth the risk into the weekend.

Gasoline (/RB) is our normal weekend play and it bottomed out at $2.75 on Wednesday, got back over the $2.80 line yesterday morning, and just tested $2.98. That should be it; $3 is just too painful at the pump – even with a few extra people driving to work.

Another trade idea from yesterday’s morning post was BBY at $17.50, already at $18.50 this morning and those TNA weekly $61.50s should be about $2.50 this morning after dipping back to $0.84 yesterday morning. AAPL was disappointing so we sold calls against it but we’re going to buy them back this morning and give our long positions room to run in case money starts pouring into the market.

Next week things get very serious indeed with earnings season kicking into high gear but today can give us some good momentum leading up to it.

Have a great weekend,

 

- Phil

 

Note: The market sold off since morning, suggesting front-running of the employment numbers? Here's the 5-day and 1-day charts of the S&P (via Yahoo) ~ Ilene

 

 

Check out Phil’s Stock World services here. 

 


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Sat, 10/06/2012 - 08:20 | Link to Comment BeetleBailey
BeetleBailey's picture

After I read this, I filled my toilet with shit. It smelled the same as this.

Sat, 10/06/2012 - 07:30 | Link to Comment Chuck Walla
Chuck Walla's picture

before the Bush tax policies kicked in and shifted capital investing away from production and into financial instruments and commodities.

Yeah, with more money that ever, people quit buying shit.  Right.  

Pity it isn't April, this would play better.

FORWARD SOVIET!  FORWARD PROPAGANDA!

Sat, 10/06/2012 - 04:38 | Link to Comment disabledvet
disabledvet's picture

and yet again we discover "the only good jobs are private sector jobs" because "they're the one's who pay for everything."? REALLY? Well...we better fire Wall Street first because they only exist as a Government Program! The fact of the matter is the ENVIRONMENT for job creation is what must be made not "job creation" AT ANY LEVEL. And of course we all know what that takes...nice, solid, PRIVATE banking. THEY are the job creators. And of course what do we find? Banks keep failing! Hence my focus on the Upper Mid West and North Dakota--they are CREATING banks up there! And how you might ask? Well...WITH A PUBLIC SCHOOL SYSTEM IS HOW! I'm often reminded when i read this crap of the clown from New York who shows up in Montana "with a plan to convert your wonderful municipal electric utility into a for profit money center for me!" Needless to say he takes a great local utility, sells it to his buddies on Wall Street...and then tries to turn it into a telecom company WHICH PROMPTLY GOES BANKRUPT! (Interestingly he could never understand why none of the local town folk would not sit next to him in Church.) FOREVER BANKRUPTCY IS NOT CAPITALISM EITHER FOLKS! New monies must be created...and in this environment this can only be done with either new industries (solar, cloud, nat gas), new profits (railroads, oil, banks), new tax regimes (North Dakota), etc...etc. but can ONLY be done with the right policies from Washington. In this case we do have that IN ONE FORM...namely...countercyclical financial policy that is pro-growth in the EXTREME....with no end in sight i might add...and that "in theory" does not cause inflation...although it creates massive amounts of "Financial Inflation" (gold, oil, soft commodities) etc...all of which is GREAT for a LITTLE BANK but is eating away at the asset base "of the big guys." No amount of money i think is enough unless and until there is a sound money platform coming out of the Fed...but to extrapolate as is done on this site everyday that "THE END OF THE WORLD IS NEAR! THE END OF THE WORLD IS NEAR!" is a COLOSSAL blunder...as we all now know. (Equities have completely recovered...WITH STATE HELP OF COURSE...but not with direct lending but with directed ECONOMIC POLICIES.) Anywho...short this thing at your own peril...as Phil has recommended going on three years now i might add...but "then he becomes a trader" when all that blows up in your face. Or...you can acknowledge whatever one thinks of an inflation based financial policy (you all here know what i think of it)...that is reality and one must invest accordingly: with Index funds...either internationally (say with an East Asian fund) or internally (in the solar space.) only the Lunatics of Low Finance believe the way forward is by taking a Bailout Regime and try and manifest its intent via creating a Bankruptcy Regime. The High Finance people are trying to create a GROWTH REGIME...and they are succeeding i might add.

Sat, 10/06/2012 - 06:14 | Link to Comment Setarcos
Setarcos's picture

Sorry.  Unreadable.

Please use paragraphs.

The shorter the better, if not necessarily this short.

Sat, 10/06/2012 - 01:36 | Link to Comment q99x2
q99x2's picture

Wake me the next time you buy FAZ. Until then I quit reading.

Fri, 10/05/2012 - 23:17 | Link to Comment Yen Cross
Yen Cross's picture

  I love the divergence, in those 2 "blue charts"...

Fri, 10/05/2012 - 20:53 | Link to Comment dexter_morgan
dexter_morgan's picture

DailyKos.........fucking seriously? Don't be bitchin about Faux News if you are going to be pushing this propamedia shit, which ignores who was in charge of the purse strings during those periods - the house and senate. The republicans saved Clinton's sorry ass when they took over in 1994 and he stole their ideas and implemented them. What a turd.

So in this bullshit piece of analysis Jimmy Carter and LBJ were the 2 greatest presidents economically speaking. Hmmmm.....yeah that squares up well with reality.

Fri, 10/05/2012 - 20:43 | Link to Comment Yen Cross
Yen Cross's picture

You're on to something Ilene.  ( Good news is ? good news) Let the sell off procede!   Good work Ilene :-)

Fri, 10/05/2012 - 20:27 | Link to Comment Meesohaawnee
Meesohaawnee's picture

employment data 30 days before an election is the biggest non event. why why why are we making a big deal out of this??? i cant trust it. to trust it would be foolish. sorry you reap what you sow us government. Nothing is believable anymore. Its that way until it aint. which god help us may be after the election .. until then. i yawned. though i must admit the market was quite unusually "fun" anytime crapple gets bitch slapped is fun.

Fri, 10/05/2012 - 19:17 | Link to Comment ebworthen
ebworthen's picture

Employment data is bullshit; employment sucks, economy sucks, middle class being bled to death and pushed to food stamps, filing S.S. disability, and cashing out IRA's and 401K's to survive.

Elites are enriching themselves at the expense of the future, and the stock market doesn't mean shit.

I can't wait for the collapse of this ponzi.

Fri, 10/05/2012 - 18:47 | Link to Comment nmewn
nmewn's picture

"As I write (8:55 am), money is flying out of bonds and will likely plow into the stock market today – essentially we just found 873,000 more people who can afford an IPhone – and that’s going to count for something in the Appleconomy.

ROTFL!!!...just where does one hide 873 thousand people?...fun with numbers.

"We’ve been leaning bullish but maybe not bullish enough – we’ll have to see if the Dow can clear 13,600 and hold it on this news – at the moment, the Futures are up 50 points. Europe is loving the numbers and EU markets are up about 1% and trading at the day’s highs into the US open."

And...its gone...lol.

Sat, 10/06/2012 - 02:15 | Link to Comment Yen Cross
Yen Cross's picture

Thats' 200k less than  5mm"? The " market was 8mm" long!      WTF?

Fri, 10/05/2012 - 17:43 | Link to Comment Rainman
Rainman's picture

Middle class net worth is back to the level of 1992. To find the " good old days " you must go all the way back to Eisenhower and Ozzie and Harriet.....when the dollar had yet to be totally desecrated. Check back in a year....today will be referred to as the good old days.

Fri, 10/05/2012 - 17:43 | Link to Comment Arnold
Arnold's picture

$3.00 too painful at the pump? I must have missinterpolated.

Other than that, looks good for a post debate touche, as well as rounding up all those Medicare fraud people. Now if only Turkey and Syria would consult with the handlers at 1600 Pensylvania Avenue, all things will be blooming roses for a month and a half.

Fri, 10/05/2012 - 21:55 | Link to Comment ilene
Fri, 10/05/2012 - 17:40 | Link to Comment mtomato2
mtomato2's picture

"The DailyKos?"

As an unbiased reference?

Are you freaking serious?

Fri, 10/05/2012 - 17:12 | Link to Comment Winston Churchill
Winston Churchill's picture

Fools,damn fools,and statititians.

Fri, 10/05/2012 - 21:06 | Link to Comment jeff montanye
jeff montanye's picture

unless i missed the pun (i miss many), statisticians.  

if the spellcheck gives you a dotted red line under the word, put it up in the google box one letter at a time until it offers the, probably correct, spelling of the word you want. if in doubt, ask for the word's definition.  of course spellcheck isn't perfect and certainly can't tell an actual world used incorrectly.  it is also blind to puns such as statusticians.  but it's a start.

churchill was a good copy editor, imo.

Fri, 10/05/2012 - 16:58 | Link to Comment Fecklesslackey
Fecklesslackey's picture

Well it's good to know that happy days are here again

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