Home > Uncategorized > 2012/01/06: Quick Post: Underwhelming Equities Response to Strong US Jobs Number

2012/01/06: Quick Post: Underwhelming Equities Response to Strong US Jobs Number

© 2012 ROHR International, Inc. All International rights reserved.

And now we get today’s equity market response to the Strong US Jobs Number. There’s quite a bit that could be affecting that, but mostly it seems a major case of “buy the rumor, sell the fact.” The lack of any March S&P500 future push above the 1,281 area is telling.

So what’s going on here? Quite simply, the markets are acting like the better than expected December economic data may be a brief ray of light prior to the darker influences from Europe and the major new US regulatory and tax burdens weigh on economies in the New Year. It is still our contention that US Taxulationism (which includes a bit of protectionism already apparent in recent challenges with China, along with tax and regulatory burdens) will still be a problem in the US.

And along with the very selective state of mind exhibited by the normally ‘conspicuous’ US consumer in the December retail store results this week, that’s a problem for the rest of the global economy as well. While that might be the case in any event, it will be especially telling when the rest of the world is looking for the US to lead the way up while many of the other economies are struggling. We shall see.

General Market Observations

It is certainly possible in the equities might improve further as the session proceeds. That will require reserving judgment until later in trading session. However the other key near-term factor is that some of our very short-term momentum indications will probably not return to the potential UPside ‘runaway’ condition that fizzled after the gap higher at the top of the week. And it will be interesting to see if the March S&P500 future might actually sag back below the key near term 1,264 support for the weekly Close as well.


Of course, this also has implications for the other asset classes. While govvies dipped initially off the strong Employment number, they are right back up to their pre-report levels, and the US dollar was not really phased to any great degree. It also seems that the Gold market has not liked the underperformance of the equities on the number, as the February Gold future sagged back toward the top of the key 1,615-30 resistance (which will be very important for the weekly Close.) Of course, Gold might choose to return to a ‘haven’ bid even if the equities weaken. We shall see on that problematic potential. Yet, energy markets have not recovered much from yesterday’s selloff either, as February Crude Oil future weakens further from the 102.00-103.39 area resistance.

We hope you find this useful.

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