Friday, November 8, 2013

Green Arrows for Stocks as Non-Farm Payrolls Surprise

As the work-week ended, everything was up, except, of course, gold and silver, because we just can't have those ancient relics of real money ruining the fiat-fest currently underway.

After the government reported October non-farm payrolls up a shocking 204,000 in October and revised August and September reports upward as well, futures slid, in sympathy with the idea that the Fed would - due to the "strong" jobs figure - reconsider its $85 billion-a-month bond-buying binge and begin to taper such efforts.

However, once the markets opened, good news was once again good news, and stocks staged a massive rally, erasing all of the prior day's losses on the major indices, sending the Dow Industrials to another record close.

Mortgage rates rocketed higher on the news, as did treasuries, the 10-year note ripping upward by 13 bips.

The logic may be a bit twisted - then again, what, concerning Wall Street and our current "crisis management" economy isn't? - but here's the take: Sure, the effects of the government shutdown the first two weeks of October were minimized, and the economy was creating jobs, but the unemployment rate actually rose - from 7.2 to 7.3% - due to a decline in the labor force participation rate, which has steadily trended downward for the past decade, making what looked, on the surface, as good news, actually bad news for the economy, which is good news for stocks because the Fed will just keep buying up treasuries and MBS, sloshing even more cheap money into the already liquidity-bloated system.

As usual, bankers and their kindred traders, hedgies and speculators were the main beneficiaries, after selling yesterday on a move that suggests the payroll data was privately leaked, were able to buy on the cheap Friday morning.

That's about the only analysis that makes any sense, though rational, logical arguments aren't always adequate predictors of market economics and trading patterns.

The guys with the inside scoop always do better than Mr. and Mrs. Average Joe and Jane. And they do it every day, whether the market is up or down, because they own the data.

Dow 15,761.78, +167.80 (1.08%)
Nasdaq 3,919.23, +61.90 (1.60%)
S&P 500 1,770.61, +23.46 (1.34%)
10-Yr Bond 2.75%, +0.13
NYSE Volume 3,770,251,500
Nasdaq Volume 1,934,757,875
Combined NYSE & NASDAQ Advance - Decline: 3706-1971
Combined NYSE & NASDAQ New highs - New lows: 231-99
WTI crude oil: 94.60, +0.40
Gold: 1,284.60, -23.90
Silver: 21.32, -0.34
Corn: 426.75, +6.25

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