By now you know the employment report printed a normal number this morning and that the last two months were revised up a lot, wiping away the 4000 job contraction reported last month.
When the negative number printed I offered the possibility that it could be subject to revision and obviously that was the case. The point to bringing it up now is this required no keen insight. The nature of certain data series is that they are volatile, employment reports go to the front of the line on this.
Big moves outside the trend are often revised. While the stock market's reaction makes for a nice day the revision should not be such a huge shock. On the day of that last report I had another post saying that if the negative number caused a panic it would snap back. Really that number was more of a bottom than anything else and we have had a good month in between.
The thing to take away is that this will repeat often. A scary number knocks the market down, the market recovers some amount, and then the number gets revised.
Wikinvest Wire
9 comments:
Yes it looks like that jobs number has been interpreted very positively today.
I have closed some options calls today to profit from the up move and was looking at some way to protect against a down day on Monday, if perhaps things get revised or interpretations turned less rosy.
On a broader more index based level, I had looked at buying some VIX calls because a pop back up seemed possible in light of the recent steep decline, but was turned off by the high premiums and spread on VIX itself. So instead I looked at IBD's Bottom 200 composite stocks and scanned for puts that I thought my appreciate if the market vents some next week, after today's broad up move.
I scanned specifically for puts on weak companies, or with recent selling pressure. I got WMG, NLS, RAD, ALU, QLTI, PALM, FBR, and USU, and bought some puts on those. It seemed a good alternative to going long VIX here. And to prepare for possible "bad" news next week.
So Rog, you preach not to get scared?
Why did you panic and buy the double short fund in August, at the absolute worst time?
It must be down another 2% just today!
You are the man, Rog......maybe some day you will practice what you preach.
Give it up Heckler. You are a moron that no one pays any attention to on this site.
Unless you would like to give us your stellar predictions on the market so we can see if you are the genius that you think you are.
And we are still waiting...
Roger,
These numbers are ALWAYS revised. Employment stats are created through statistical models, and are always adjusted.
This is nothing new.
You say you offered this possibility, as though you were some sort of visionary....what a joke.
the entire point of the post is that they are always revised. I say there was no insight.
the market acted like it was new and I am pointing out that this will happen again so don't be surprised when it does.
my point is exactly the opposite of being visionary
For the life of me, I don't know why the market listens to economists. Reality is never what it seems and their predictions are even worse. In the long run, company earnings drive stock prices.
but in the short run it is noise, aka fear and greed, that drive stock prices. rightly or wrongly there is a lot of attention paid to the very short run.
Wonderful website, Roger.
Love you're even keeled perspective, especially for a market that behaves like a manic-depressive on steroids.
however, are we forgetting that while there are net new jobs in absolute numbers, as a percentage of the population the absolute number of new jobs is not keeping pace with the population increase. Put another way, Will Rahal estimates that to keep pace with population growth, we need 170,000 new jobs! So for the last few months have all been 80-110,000 new jobs--not good trend.
According to his Oct 4 post, (http://www.wrahal.blogspot.com/), there is a net loss of jobs for the year! Also Oct 6 and July 8 are interesting charts.
Perhaps the market rally on Friday reflects a loss of perspective?
E, I agree with that. The monthly numbers have been weak by historical standards the entire bush admin. I thought the number to run in place was 150k but either way.
clearly though 110k along with the revision is better than a negative number.
i have heard some economists spin the jobs issue but don't recall the argument.
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