Well Here We Are

Nothing like that good old +0.5% premarket push to get the markets where they need to be - a hallmark of the 15 month rally. With yesterday's late day push over S&P 1094 as Obama promised us the Friday jobs report would be 'strong', and a close of 1098 it was almost a given that premarket futures would be up to help break resistance. After all, why bother with the regular session when the going is sometimes tough when the premarket can do the job? Even better... if the market falls 0.5% in the real session, you are still flat on the day due to premarket magic.

That said, we do have two moving averages - one exponential (1101) which was cleared in premarket, and one simple (1106) which unfortunately is going to take a little bit of work in the regular session. (boo hiss!) But with the wonderful boost in premarket, instead of needing a +0.75% move during the regular session to clear 1006 it will just take 0.2% worth of work!



As for the next 24 hours, at 10 AM we have ISM Services which could be just the trick to get this rocket ship going, Summers willing. If not, then surely premarket tomorrow when 700K jobs are "created" (425K+ census + 175K birth death model created by guesswork + 100K* real jobs) Let prosperity reign.

*40 to 50K which will be temporary

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The good news for Wall Street this morning is in the productivity report which shows the private labor class continues to squeeze out more and more while being paid less. Very good as that means more profits = more profits = more bonuses for upper management = nirvana.

• Unit labor costs, a gauge of inflation and profit pressures closely watched by the Federal Reserve, fell a less steep 1.3% rather than 1.6%.
  

Amazingly that is an improvement from the previous quarter:

• That follows a 7.8% drop in the fourth quarter.

This is what we call 2nd derivative improvements... Americans in the private labor pool are falling behind at a slower pace. Green shoots! (Well until we realize they are being asked to pay more taxes to support their public sector counterparts)

And you wonder why corporate profits are surging?
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For a bemusing look at why a private forecaster of employment cannot justify the propaganda spewing out of government offices versus what he is seeing using ACTUAL payrolls, please see a video from this morning that I will have up shortly. What I most loved was the line of questioning where CNBC head economic cheerleader asks "why do you show losses in construction jobs in the ADP data when government says there are gains?" In essence the answer is: " I don't know, I mean we sample 20,000 construction firms yet uhhh....ummm... well we cannot square with the government data." Dear Mr. ADP ... it must be all those new construction firms sprouting up across America that are too small to count. You know the ones - they are building homes, new office buildings, and malls. Your numbers would be "correct" and square with government if you added 150K new jobs every month via the birth death model. Stop relying on actual payroll data; data is so old school!

EDIT 10AM: Bemusing video



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