Market Soapbox - March Non Farms Report
A very needed bounce for the market today. The recent sell off can be attributed to the Boys from Bermuda having elephantine memories. (In the past, I have referred to them as hedge funds or the Hedgsters) The Boys from Bermuda have been evacuating their market positions prior to Fridays release of the non farms payroll report.
Flashback: April 2nd, 2004 the March report whisper number was 150,000. The report released showed 308,000 jobs, the largest gain since April 2000. In early May, the April number showed another increase of 337,000, these two reports tanked the bond market, which finally bottomed on May 13th, after 6 weeks and an 11.5% drop.
Todays little head fake can be attributed to intermediate oversold conditions, end of the month & quarter window dressing, as money managers adjust their portfolio holdings today and tomorrow. The dollar is holding position, oil is stable, stocks & bonds are bouncing. Regarding duration & degree of this bounce, Friday's March non farm payroll report holds the key.
Back to the Future: A strong report >=250,000 will slam both the stock & bond markets. A benign report <=225,000 will allow the current bounce to continue through April 6th, when the Boys from Bermuda will start to unwind their monthly positions again. April 13-15th the unwind continues, leading to April 18 when 05 Q1 reporting starts in earnest. Reports and forward guidance will not be pleasant for interest rate sensitive & semiconductor issues. The markets should be completing an intermediate bottoming process by the end of April.
Considering the calculation methods used for the non farms payroll report, it is very apropos that the report is being issue on April Fools Day.
February Non Farm Payroll Report
Flashback: April 2nd, 2004 the March report whisper number was 150,000. The report released showed 308,000 jobs, the largest gain since April 2000. In early May, the April number showed another increase of 337,000, these two reports tanked the bond market, which finally bottomed on May 13th, after 6 weeks and an 11.5% drop.
Todays little head fake can be attributed to intermediate oversold conditions, end of the month & quarter window dressing, as money managers adjust their portfolio holdings today and tomorrow. The dollar is holding position, oil is stable, stocks & bonds are bouncing. Regarding duration & degree of this bounce, Friday's March non farm payroll report holds the key.
Back to the Future: A strong report >=250,000 will slam both the stock & bond markets. A benign report <=225,000 will allow the current bounce to continue through April 6th, when the Boys from Bermuda will start to unwind their monthly positions again. April 13-15th the unwind continues, leading to April 18 when 05 Q1 reporting starts in earnest. Reports and forward guidance will not be pleasant for interest rate sensitive & semiconductor issues. The markets should be completing an intermediate bottoming process by the end of April.
Considering the calculation methods used for the non farms payroll report, it is very apropos that the report is being issue on April Fools Day.
February Non Farm Payroll Report
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