WASHINGTON (MarketWatch) — “The U.S. created 114,000 new jobs in September and, in a potential jolt to the election, the unemployment rate fell below 8% for the first time since President Barack Obama took office….Economists surveyed by MarketWatch expected a 110,000 increase in jobs last month…
…Even with improved hiring in late summer, companies are not adding workers as fast as they did earlier in the year. Monthly job growth averaged 146,000 in the third quarter, down from 226,000 in the first three months of 2012.” Full story at…
http://www.marketwatch.com/story/jobless-rate-falls-to-78-lowest-since-2009-2012-10-05?dist=lcountdown
REACTIONS TO THE
UNEMPLOYMENT RATE:
“What helps explain the big decline in the unemployment rate? Not a
conspiracy—big rise of 600,000 in part-time workers. Self-employed up 118,000.”
— John Silvia, Wells Fargo. More
reactions at…http://www.marketwatch.com/story/treat-this-as-a-good-number-and-more-reactions-2012-10-05
RECESSION
Many will see the
employment numbers and discount the chances for recession. I am not a big believer that employment is a
good indicator for future recession; but when I look at the stock market, investors
are not expecting a recession either.
The Morgan Stanley Cyclical Index has been outperforming the S&P 500
for at least the last month or so. The
cyclical stocks are recession sensitive; since investors are buying them faster
than the S&P 500, the consensus, investor-view remains, “no recession”. There are many who disagree…
From Bloomberg
Surveillance (video)…Economic Cycle Research Institute (ECRI), Sep 13, 2012
“Nine months ago we knew
that, sitting here today, most people probably would not realize that we are in
recession – and we do believe we are in recession…Very often the beginning of a
recession sees the first quarter with positive GDP growth.” – Lakshman
Atchuthan
Be vigilant.
EARNINGS
Many are suggesting that
the upcoming earnings season will be bad, mostly because earnings growth is
expected to have slowed. That’s probably
a given since as the recovery advances, comparisons to prior year data get
tougher. That's particularly true if growth is very slow, as it has been in this recovery. It will be interesting to
see what happens next week as Alcoa kicks off the earning season.
MARKET
RECAP
Friday the S&P 500
finished unchanged at 1461 (rounded).
VIX fell about 1-1/2% to 14.33. NTSM
The NTSM analysis remained HOLD Friday in a solidly neutral position.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352.
I currently have a 50%
stock allocation overall. For my age,
that is what many advisors recommend as a fully invested position, however, I
am normally much more aggressive. I have
less invested in stocks now because there’s a lot of risk.
