Friday, December 05, 2008

The Employment Number

This morning the employment number showed a drop of 533k. This was much bigger than the 350K drop anticipated by the consensus forecast. Moreover the previous two months' reports were revised downward. This is widely regarded as terrible economic news.

Yet the S&P 500 futures are now actually trading higher than they were just before this morning's number came out. The market seems to have absorbed worse-than-expected economic news very well. This is evidence that a pretty bad recession has already been discounted in the current levels of the market averages. This is one reason why I think the next big move from current levels will be upward.

1 comment:

JOSE said...

I think that the employment number had already been discounted yesterday, and today, was an attempt to push lower. What I'm concerned about now is the potential bankruptcy of the automakers. It looks like Chrysler is beginning to play hardball by threatening a bankruptcy, since they have already hired a firm to manage the potential action. When you look at the situation, i am disgusted at Chrysler's hardball attempt to trigger another market calamity. The circumstances by which they went private, and the amount of debt they put out for that takeover would be worthless(coincidentally Lehman Brothers was holding on to 22 billion of that debt which they could not unload). The Ponzi scheme continues to collapse, and Chrysler/Cerberus want taxpayer money to save their sorry butts. Question becomes do we do it...or tell them to bugger off. I wonder if congress has the guts to say yes to Ford, and GM and no to corporate greed Chrysler/Cerberus. The hound of hells gate should be put down. Those fatcats should not be bailed out with our money...And the company that makes the Mustang and the company that makes the corvette should go a little longer. All my own opinion.