It's like whiplash trying to figure out market reaction and what the market is thinking. What we do know is that after seeing the job numbers from the Labor Department, the market rallied big.
The U.S. added 175,000 jobs in May, according to the Labor Department, indicating the economy was expanding modestly, but not enough to convince the Federal Reserve to pare back its bond-buying program. The unemployment rate edged up to 7.6 percent. Economists surveyed by Reuters expected a gain of 170,000 jobs with the rate holding steady at 7.5%."
http://www.cnbc.com/id/100798036
This seems to be the rub: the market is rallying-and now again over 15,000 on hte Dow-not because they think these were great numbers-they were very mildly above expectations but rather because they aren't so great, the Fed won't be pulling back on QE:
"I'm disappointed. This number was not that impressive and I don't see a lift off that we should have seen by now if QE was working—we were barely above the consensus, but for it to be a really good number, it had to be above 200,000," said Doug Cote, chief market strategist at ING U.S. Investment Management. "And judging by this number, it's clear that QE3 is not creating sustainable growth."
At the end of the day, today's numbers seem not to have proven anything-whatever you believed coming in you can still believe now.
"The US employment report was close enough to consensus to not shed fresh light on the Fed's tapering debate. The unwinding of positions that characterized yesterday's high volatile session is continuing jobs data release. Whatever one's view was on the timing of Fed tapering, it's unlikely to change based on today's jobs report."
http://www.investing.com/analysis/jobs-data-not-sufficient-to-impact-tapering-debate-170247
The dollar has risen big against the Yen today-though I notice the pound has also done so against the Yen. One theory is that better U.S. data means the Fed can tighten which will increase the value of the dollar. Yet how much of it is a dollar strong story and how much a yen weak?
It seems that those long the dollar want good data as this-the theory goes-will raise the dollar. On the other hand those long equities think the data should not be too good as this will allow the Fed to stay in longer.
So if both the market and the dollar is up this must be because each market is reading the data differently .
P.S. Allen Greenspan hits a new nadir for a tight market argument. He says rollback QE whether it hurts the economy or not:
"Meanwhile, former Federal Reserve Chairman Alan Greenspan told CNBC that thecentral bank should start to taper its $85 billion a month bond-buying program even if the economy is not ready for it, saying that the near-zero interest rate policy has helped stock prices, but the markets need to be prepared for faster-than-expected rise in rates."
The U.S. added 175,000 jobs in May, according to the Labor Department, indicating the economy was expanding modestly, but not enough to convince the Federal Reserve to pare back its bond-buying program. The unemployment rate edged up to 7.6 percent. Economists surveyed by Reuters expected a gain of 170,000 jobs with the rate holding steady at 7.5%."
http://www.cnbc.com/id/100798036
This seems to be the rub: the market is rallying-and now again over 15,000 on hte Dow-not because they think these were great numbers-they were very mildly above expectations but rather because they aren't so great, the Fed won't be pulling back on QE:
"I'm disappointed. This number was not that impressive and I don't see a lift off that we should have seen by now if QE was working—we were barely above the consensus, but for it to be a really good number, it had to be above 200,000," said Doug Cote, chief market strategist at ING U.S. Investment Management. "And judging by this number, it's clear that QE3 is not creating sustainable growth."
At the end of the day, today's numbers seem not to have proven anything-whatever you believed coming in you can still believe now.
"The US employment report was close enough to consensus to not shed fresh light on the Fed's tapering debate. The unwinding of positions that characterized yesterday's high volatile session is continuing jobs data release. Whatever one's view was on the timing of Fed tapering, it's unlikely to change based on today's jobs report."
http://www.investing.com/analysis/jobs-data-not-sufficient-to-impact-tapering-debate-170247
The dollar has risen big against the Yen today-though I notice the pound has also done so against the Yen. One theory is that better U.S. data means the Fed can tighten which will increase the value of the dollar. Yet how much of it is a dollar strong story and how much a yen weak?
It seems that those long the dollar want good data as this-the theory goes-will raise the dollar. On the other hand those long equities think the data should not be too good as this will allow the Fed to stay in longer.
So if both the market and the dollar is up this must be because each market is reading the data differently .
P.S. Allen Greenspan hits a new nadir for a tight market argument. He says rollback QE whether it hurts the economy or not:
"Meanwhile, former Federal Reserve Chairman Alan Greenspan told CNBC that thecentral bank should start to taper its $85 billion a month bond-buying program even if the economy is not ready for it, saying that the near-zero interest rate policy has helped stock prices, but the markets need to be prepared for faster-than-expected rise in rates."
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