Showing posts with label unemployment report. Show all posts
Showing posts with label unemployment report. Show all posts

Unemployment Sends Mixed Signals

government spendingAfter a worse than expected ADP job loss report that came out Wednesday (we lost jobs instead of an expected growth in initial claims), investors were quite anxious to see what Friday's number showed. The results are mixed. Jobs increased 162,000, which was short of the expected 200,000 number analysts were expecting, however, there were other details that made investors a bit more confident.

Going into Friday, over half of the expected job growth was anticipated to be from the recent temporary census jobs being offered by the government. It is hard to take these jobs into account, because they are short term and many of these people will be back on the job hunt in a few months. Friday's number showed that only 48,000 jobs of the 162,000 were from census hiring. As a result, investors cheered the higher than expected private sector job growth that occurred last month. On the other hand, many are stating that last months "improved" hiring had a lot to do with the vicious weather of February. At any rate, any remote sign of job growth will obviously cause optimism, considering that optimism has existed in the market for over a year now with absolutely zero job growth!

Due to the holiday, markets were closed for cash trading on Friday, however, futures were opened half day and traded mostly up. The big question on everyone's mind and what will ultimately be the deciding factor is if this current growth is sustainable. There is no doubt that much of the recent growth we have seen have been a result of government spending and incentive programs. The government has done a very good job of "numbing" the pain of a massive recession/depression. However, at what consequences do we enjoy this numbing. In past times, other countries have had devastating affects from ruthless spending during contracting times. Hopefully, we can escape this without just delaying these problems for the next generation. Only time will tell. Happy Trading.

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Bulls Fight Back - Dow Above 10000 Again

starbucks crash earningsThursday closed with a rampage of buying which once again pushed the Dow back over 10,000. Anticipation of what investors are hoping for a strong employment report helped bring some confidence in trading. This is just the reason why I sold out of my shorts last week.

As for the rally, I don't see this continuing into tomorrow. Most of today's run was in anticipation for tomorrow's number. Best case scenario is that we do get a favorable report and we go on with our day. However, if the number comes in worse, I would expect to see a rather strong sell off. Unemployment is the one sign that continues to bring down the overall sentiment of many investors, as people know what kind of impact jobless consumers have on an economy.

Even though it seems as if almost all retailers have been crushing earnings reports lately (Starbucks beat their expectations today after close), it is important to know that this is not the case. In fact, more than half of retailers have fell significantly short of expectations, not to mention that most retailers have suffered massive losses compared to the year prior.

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Being in real estate, I have done a lot of work with Starbucks and worked with a lot of clients who have Starbucks as a client. From a landlord perspective, Starbucks is a worry for most. They have closed down hundreds of locations, put a halt on development, and are trying to get out of hundreds of more leases. Their sales have significantly dropped, but due to their report being better than expected, the stock rises. This same principal is happening all throughout the market, which is why we are seeing almost a complete void of fundamentals in the market currently. This fact will change, but for the time being, it makes it a very dangerous field to trade on.

I expect a selling close tomorrow as I do feel that unemployment will be better than it has been, but still very depressing. Hundreds and thousands still losing their jobs give me know reason to cheer, or buy stock for that matter. The dollar held up reasonably well today, despite the rally, which leads me to believe it's almost time to pull the trigger. Happy Trading.

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Unemployment Anxiety

unemployment reportI apologize for the missed post yesterday. I am attending the ICSC West Coast real estate conference and have been preoccupied with hearing about the destruction of commercial real estate happening all around the country. The media can say whatever they want, but coming from the horse's mouth, there are some dark, dark days awaiting the commercial real estate market.

After two rather strong days of selling which we saw on Tuesday and Wednesday, the market was able to bounce back slightly today by having the Dow end up a bit over 60 points. However, the trading was mixed throughout the day and did spend some of the day in the red. The green day today does not dispute the probable trend of a turn around at this point, especially when you consider that higher volume levels have accompanied selling in recent trading days.

Everybody anxiously awaits the employment numbers being released tomorrow. Best case scenario, is that the number comes in around the 200,000 jobless mark, which in that case, the market would most likely cheer. However, when you think of how discouraging that number really is and that the unemployment market continues to lose jobs at such a violent level, it makes it hard to cheer about anything. Also, keep in my mind that we are going into a holiday weekend, which usually makes investors nervous to hold investments over the long weekend. On the flip side, volume will most likely remain low, due to traveling, which could prime the market for large market manipulation to push their weight around. I expect the unemployment number to be the main decision maker of where we head. I don't see a lot of optimism for September as year end pressures begin to pile up. Oh yea, and redemptions...Happy Trading,

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