For the better part of two decades I sat at a desk at 8:30 on the first Friday of the month and waited for the Non Farms Report. That was a long time ago. Nothing has changed. There are still thousand of people who will put on a seat belt and wait for the numbers to come.
The ‘market significance’ of these numbers is very high. Quite often they drive the chitchat for weeks. It always makes some mention on the evening news.
I have always hated this data series. If you have a book you are ‘at risk’ at 8:29. If you don’t have a book there is no chance to make money. It stacked up a lose-lose.
There was a time that I got so frustrated with this process that I hired a few big shot economist to give me an edge. I paid them serious money for a year. The results were slightly worse than tossing a coin. To hell with the economists.
Tomorrow’s numbers have the potential to light some fires. The expectation for the payroll number is either side of flat. That would be boring if it turns out that way. Even with that, there will be two camps. The first will say”
Golly this is GREAT! A year ago we were losing 700k jobs a month and now we have broken even!!
The other camp will cry:
This is crap! We need 250,000 new jobs a month to sustain a recovery! This lousy number at this stage of the cycle is a sure sign of a double dip in six months!
If we get a breakeven number tomorrow the Vol's in the things we trade are going to make a jump and the computers will make some dough but I don’t think it will mean much for the rest of the month. Too much else to worry about to get agita over a neutral number.
The worst feeling is when the number comes and it is a blow out. Being on the wrong side of a blow out leads to sphincter issues.
For tomorrow, I will say that anything that is outside of plus or minus 250,000 is going to cause a stir that will last for a bit. If it is on the ‘over’ there has to be a mighty hit to the bond market. A very ‘hot’ number coupled with the big calendar next week will take the ten year close to 4% by the end of the day. On the flip side, if the number is a big downside surprise the dollar is going to get whacked and gold will be up $25.
My gut tells me that the economy is stronger than we think. I believe there is going to be a big 'upside' tomorrow.
Can’t wait.
If NFP blow out the stock mkt will finish the day down 1.5%. Dollar will rise, UST will sell off as will gold. Traders will start to price in a tightening in Fed funds sooner rather than later. Oil would probably spike up.
ReplyDeleteThere were 3 retail sales numbers reported recently that were a surprise to the upside. I tend to be a pessimist for 2010, but I'll be happy to be wrong.
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