I don’t think we have had a more important employment report this year than the one which will be released tomorrow morning at 7:30 a.m. (central).
Markets have been hanging their hat on the Fed starting to back off rate hikes based on weakening economic reports–of course the reports the Fed is looking at have not been weak–employment and the various inflation gauges.
Tomorrows forecast is for an added 275,000 new jobs in September with teh unemployment rates hold steady at 3.7%–honestly that doesn’t seem very weak to me. I suspect if the number comes in high both stocks and bonds are going to get hammered–while 200,000 or 225,000 might be seen as a move in the right direction.
Next on deck is the CPI report next Thursday–so after ‘jobs Friday’ we get a few days to recuperate before nervousness sets in again.
Today I bought a little dab of the Liberty Broadband 7% preferred (LBRDP) (again), some Customers Bancorp 5.375% baby bonds (CUBB) with a current yield of 6.62% and my Tricontinental $2.50 preferred (TP-P) order executed at $46.25.
Markets set to open in a few. Good news is bad. Payroll numbers came in slightly higher than the experts predicted, and unemployment fell. Any other time I would say the economy is doing great, but with the specter of inflation the worry will be the feds will keep increasing rates.
Over years, I’ve found that the stock market occasionally focuses on a certain single statistic to the exclusion of others.
Back in the mid-70’s, I remember sitting in my car under a railroad trestle in a riverfront parking lot waiting for an AM radio news station to report on the oddball statistic of the moment, maybe the “balance of trade” deficit.
The BT did not affect me personally. However, all the experts agreed, the BT was greatly important. Whatever the BT report was, it would move markets. Interest in it faded away. I haven’t heard anybody obsess over it in decades, let alone once a week. Whatever happened to BT, the economy is still around.
A few years later,, an expert said the BT fixation reminded him of an old HL Mencken quote (which he appropriately misquoted) : “For every complex problem there is an answer that is clear, simple and wrong.”
Disclosure: I didn’t change my DRIP in response to the news.
Just my opinion.
So markets go down on good news and up on bad news.