Today’s miss for payrolls, drop in unemployment, weaker wage growth, and drop in participation rate was proclaimed by Bob Pisani and his like as “goldilocks”… David Rosenberg disagreed:
My grade for today’s payroll report is a big fat C-. Harsh, yes, given the apparent good news in the 3.9% u-rate, but this does not reflect job market strength as much as the symptom of an ever-depleted pool of labor (11-year low).
— David Rosenberg (@EconguyRosie) May 4, 2018
But for now, stocks ended the week unchanged thanks to the biggest short squeeze since Brexit to reassure everyone that…
On the week, stocks mixed (Nasdaq up, Dow down); Dollar, Oil, and Bitcoin up; Gold down, bonds unch…
Friday saw Thursday’s momo reversal extend with Nasdaq and Small Caps squeezed into the green for the week and then S&P and The Dow pumped to green for the week after Fed’s Williams comments that he’s ok overshooting 2% inflation for a while… but by the close only Nasdaq and Small Caps held gains on the week…
Futures show this was not related to payrolls – this was pure cash market squeeze…
Of course the yuuge bounce is all technical – Dow and S&P bouncing off their 200DMA
Today was a huge 3.3% “Most Shorted Stock” short-squeeze day…
The biggest single short-squeeze day sine 6/29/16 (the post-Brexit buying panic bounce)
VIX flash-crashed to a 10-handle as payrolls printed…
and closed with a 14-handle for the first time since March 9th (payrolls day!)… and look what happened right before that low?!
Big Bank stocks ended the week red despite today’s effort to ramp… (SocGen, BNP, and HSBC all missed this week)
AAPL shares ripped to a new record high (after Buffett was buying in Q1)…
And FANG Stocks surged…
Elon had a tough week but through the magic of machines, his stocks managed to get back to even (after his short-squeeze threat)… despite TSLA bond’s collapse…
Tech strength and financial weakness sent the S&P Tech/Banks ratio to its highest since the peak of the dotcom debacle…
Stocks and Bonds decoupled this afternoon as the machines pushed the former up to unch on the week…
Mixed picture in Treasuries this week with the belly outperforming (7Y -2bps) while the tails lagged (2Y +1bp or so and 30Y lagged until the last hour or so)…
It has now been six days since the 10Y Yield traded above 3.00%…
The yield curve flattened once again
The Dollar Index rallied for the 3rd week in a row – the biggest jump since 11/25/16…
Argentine Peso was the week’s worst currency – plunging over 6%…despite a 1275bps rate-hike!!
Cable broke below its 200DMA
Cryptocurrencies surged this week with Bitcoin testing up towards $10,000 and Ethereum over $800…
WTI dominated the commodity space this week… with PMs in the red…
WTI traded within 3c of $70 today at its highest since Nov 2014…
Finally we offer this from Fed’s Kaplan: “My guess is we will eventually start to see wage pressures “
But he added “The flatness in the yield curve tells me we’re late in the cycle.. the yield curve is telling us that outyear growth looks sluggish.”
Are you reassured now?
SMART Money remains a big seller…
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