Thursday, October 7, 2010

Does the Jobs Data Matter Tomorrow Morning?

Some sites are writing bears are not pressing due to the jobs number tomorrow.  To which I answer other than the technical reasons of we went to S&P 1151 and that's all you can ask for as a bear nowadays (a few hours of selling) - why does the number matter anymore?  Why does any economic data point matter at this point in fact? 

Let's say a miracle happens and 400,000 jobs are created.  Or a horror show occurs and 400,000 jobs are lost.  Who cares?  Bernanke's intelligence arm has found weapons of mass destruction and we're going in guns a blazin with QE either way.  So why does tomorrow matter?  Especially if you have been buying hand over fist due to Bernanke protecting you with his bazooka. 

Sure we can play the "wooo hoo beat by XXX" better than expected nonsense and gap the market up 1% in premarket tomorrow but it's inconsequential in the big picture.   Same with a "miss" - if you are on the QE bandwagon you just shrug your shoulders, say oh well, and buy - Ben has it taken care of.  No one of late is buying on the old fashioned reasons such as economic recovery.  V shaped recovery is so 2009; now the marginal buyer arrives each day on the basis of a rigged centrally commanded market.  That won't change tomorrow morning.

We're getting QE, and until the psychology changes from "I'm so pleased to get QE" to "what is so broken in the economy that we're addicted to QE?" the drivers remains the same and everything else is just details.  So the only question from here is when does the QE2 meme lose its power to continually drive the market up.  Our faith in our feckless Fed leaders has led to so many great outcomes the past 2 decades, it is great to watch the rats in the maze repeat the same behavior over and over whether Alan or Ben is behind the curtain.... oh lemmings humans.

So for the bears the story is dire in the near term (unless psychology changes overnight)... just as 1131 was defended as the urgent buyer came in to make sure it did not fall, so is 1150 currently.  Tomorrow is Friday and you know what that means - we're one trading session away from Magical Mondays.  There was a syntax error this past Monday as the rare selloff occurred so that needs to be addressed this coming Monday.  Surely with their new CEO in place Hewlett Packard can buy someone over the weekend, and with cloud computing stocks now down 14% on average (after running 300%) they are 'bargains'.

p.s. I almost bowled over laughing as I read over an AP writer discussing yesterday's ADP report.  "Thus far this year ADP has been understating the official government data by 75,000 jobs a month."  Hmmm... apparently said AP writer has never heard of the boon in small business across America throughout the recession (and recovery) via the birth/death model.  Even in the depths of the recession circa fall 2008 to spring 2009, our government statistician office pledged small business was faithfully creating ~100K jobs / month ... even in construction.  (seriously)  In fact, strangely the entire job growth year to date in 2010 will rhyme quite famously with the total growth of birth/death model jobs in 2010 - imagine that.  I'm sure at year end it will be the same. (chomp chomp, blue pill)

ADP says small business lost 14,000 jobs.  Government will say countless new small businesses sprung up in September (too small to count so we'll make it up) creating anywhere from 80-130K jobs.  Boo yah.
  • Small businesses, defined as those with fewer than 50 employees, dropped a total of 14,000 jobs in the month.

The only thing of interest tomorrow is to see if this NY Post story has any legs and a surge of government workers shows up out of the blue [Sep 19, 2010: Are Poll Workers Being Used to Inflate Jobs Total?]

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