Let me see, where were we? Ah, yes, I was explaining how a nation’s I Q could be inferred by looking at how markets perform. And since the US decline was greater than others we reviewed on Thursday morning, we’ll have to take this as a sure-fire indicator that all this “least common denominator crap” on television and other media is certainly paying off for the PTB.
The biggest loser though, was Argentina. Their Merval index sank 8.4% Thursday and the great I Q lesson here is that you can’t stiff the hedgies and not expect some payback. The flip side, though, is that the Merval was up almost 7% the day before, so in a lot of ways it’s like going to Vegas: Some days you win big, other times you lose big.
Asia dropped somewhat overnight. Not that they think the world is ending, but if the US gets the flu, China and Japan will at least get the sniffles. 0.9% and 0.63% respectively ands that’s a rational response when the Worlds Biggest Consumer drops 2%, which we did.
In Europe this morning this morning, the Brits were down a further 1.22%, Germany down 1.71% an d the French down 0.92% when I looked earlier.
Is it ALL the fault of Argentina? Of course not. We live on a multivariate financial/drug planet.
Another factor, not to be missed, is that the Fed this week didn’t talk up the rate increase (likely in 2015) enough. That’s something to consider deeply.
If the Fed signals that it will raise rates, it sets a market expectation that the recovery is healthy and demand is coming along much as would be expected in a recovery. But if the Fed doesn’t at least talk a good line, the market people get all jittery-like and they start responding as though deflation is still here.
As to what an Elliott wave perspective reveals, my friend Robin Landry expects this to hold around/above 1,900 on the S&P, but he figures the real line in the sand is down around 1,740. Once that is taken out, then yes, the world will be ending, the Crash of a Lifetime is likely on, and make room under the bed because I’ll be joining you. But in the meantime…
A check of commodity prices (over here) suggests that they aren’t wrong in thinking that things could hold up another year…maybe…before Long Wave reality slaps us silly: Crude oil is down almost $3-bucks (and 3%) in the past week. And the majority of other commodities are down, too.
But if you look at a three-month chart of the CBOE10-year Treasury trade, you’ll see that the Treasury traders are not at all in a panic, and since the bond market is many times the size of equities, my outlook for a “turnaround Tuesday” next week seems just as reasonable now as it did yesterday.
Bonds rates are not collapsing, the GDP is increasing at 4% (with the asterisk about who’s numbers you believe, of course) and that gets us to this morning’s employment report.
Gee, are we having fun now, or what? (Nose plugs at the ready?)
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, retail trade, and construction.
| | | Changes to the Establishment Survey | | | | Effective with the release of July 2014 data in this news release, the | | establishment survey began implementing new sample units into production on | | a quarterly basis, replacing the practice of implementing new sample units | | annually. There was no change to the establishment survey sample design. | | More information about the quarterly sample implementation is available at | | www.bls.gov/ces/cesqsi.htm . | | | |
Household Survey Data Both the unemployment rate (6.2 percent) and the number of unemployed persons (9.7 million) changed little in July. Over the past 12 months, the unemployment rate and the number of unemployed persons have declined by 1.1 percentage points and 1.7 million, respectively. (See table A-1.)
Among the major worker groups, the unemployment rate for adult women increased to 5.7 percent and the rate for blacks edged up to 11.4 percent in July, following declines for both groups in the prior month.
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