Unemployment Nervous Nellys

no consumer with retailFear of the possibility of yet another depressing unemployment number, which will be released tomorrow, kept markets trading in the red throughout the day as the Dow closed down about 25 points. Another end of day close on the gap dulled the pain as the losses were more than double earlier in the day. All eyes are on tomorrow's unemployment number as analysts have once again thrown out a very nasty expectations number. If we get even close to their expected number, I would consider it as a very bad indicator.

I found a rather funny headline today at the very popular CNBC website. I enjoyed it so much, I am showing a copy of it at the top of this post. I think it very well sums up exactly what I've been saying the past 3 months (even though I think they were referring to it in a different light). You will notice the headline reads, "Retail Stocks are Rebounding - Even Without The Consumer." The statement is almost an oxymoron, considering that the success of retailers is based on the purchasing power of consumers. However, the headline does not lie. Despite a gash in consumer spending and personal income, retail stocks continue to rise. I don't see this as a positive phenomenon, more so as I see it showing how the stock market behave in unnatural form.

From within a company, any retailer would tell that you that the consumer is number one. To think that companies are better off with a wounded consumer would be crazy. Sure, companies can position themselves, cut costs, and take measures to help themselves endure such difficult times, but in the end, it will be the consumer that keeps them alive. I just thought the headline was worth sharing. Thanks CNBC.

Make sure to keep your eye out for the hours per workweek number that will also be announced tomorrow. Many times that number gets cast aside as everyone focuses on the unemployment rate. This can be a great indicator if firms will still be cutting jobs in the future. In times past, a down trending number can point to further future job losses, with the theory being that companies cut hours before they cut jobs. If you're looking for a job RiseSmart.com can be a great place to find high paying jobs. Happy Trading.

3 comments:

  1. HSingh Says:

    FF, Give us a target for this S&P 500 from where it should correct. This rally just doesnt seem to stop. You are still bearish?

  2. Anonymous Says:

    Where has Chad gone? His "Corner" has been very quiet for a long time.

  3. PENNY STOCK INVESTMENTS Says:

    Nice post