So after a week of suffering through 85 degree weather in the Caribbean I returned to the good ol' US to hear that the jobs number was a whiff. I'll get to that in a second.
1) I don't spend a lot of time analyzing the mainstream media's obsession with the markets but when you spend a week without access to the web and USA Today is your only source of news you get a fresh perspective on what's being spoon fed to consumers.
During this past week I saw articles on -
* How the housing market has bounced back so much that people that went bust in 2007 buying overpriced shacks in Las Vegas are now able to once again get 5% loans for overpriced shacks in Las Vegas.
* How the Dow is at another high.....wait, wait, wait.... Yes, that's another high... and wait, yep there's one more.
* How everyone is piling back into the market just like in 2007 and Jan of 2000 which obviously worked out beautifully.
The point is that these mainstream articles are written to fit a theme. I guarantee there were about 20 different Reuters articles teed up Friday morning with interviews of small businesses around the country talking about how they are still hiring and seeing strong sales. Then, the jobs number came out and it was a mad scramble to come up with a different story line.
2) The jobs report - First, everyone is on to the participation rate decline at this point. It's old news and it's time for people to let it go. Yes, participation is declining but it's less from people just dropping out and more from the aging of our population. This trend is likely to continue for a long time - get used to it.
I will however say that we need to see the participation rate among 25-54 yr olds improve. This number has slipped to about 81% from 83% or so pre-recession. Until this number turns, we're pretty much swimming upstream.
In general, this was a much weaker than expected report but in our market where anything over 5 minutes old might just as well be 20 year old news the market mostly shrugged off the report by the end of the day.
2) Which brings me to today's stats of the day - 70% of trades in the US are now High Frequency trading and the average length of time a stock is held.... 22 SECONDS!!! So for all of you long-term investors out there, you should know that while your Pfizer is sitting in your account the computers traded it 1,200 times each day. Good luck out there! Someone made a good point on the Sunday talk shows today - all of the Federal Reserves moves have done a great job supporting financial assets but the core of the US economy remains very stagnant.
3) The good from this week:
U.S. construction spending better than expected.
ECB might be more aggressive.
Mtg purchase applications were up
Gasoline falls to 7 week lows at $3.63.
The bad from this week:
Jobs numbers were ugly - biggest miss in 2 yrs.
Workforce participation rate continues to fall
Jobless claims hit the highest weekly number since Thanksgiving.
EU unemployment rate rises to record 12%
Oh, and N. Korea seems to be prepping another nuke test. Yippee!
I'll try to stay on top of some breaking world news this week as well - watch this bird flu story (which is TOTALLY unrelated to the 10,000 floating pig carcasses from 2 weeks ago) and any news out of N. Korea. Yes, N. Korea is just looking for attention but their rapid movements are making it hard to analyze if the game has really changed.