March ADP at 158,000 was a huge miss over the consensus of 194,000; that is not a good sign for the nonfarm payroll report on Friday. Since ADP revised its methodology late last year, it has been much more accurate in its relation to the jobs report.
This is likely one of the main reasons we have seen a stock market at new highs, but with a very strange feature: consumers rule, cyclicals lag. Consumer index up 3.1 percent last two weeks, Cyclical index down 2.2 percent.
Why is this happening? There is good evidence that European investors are putting money into the U.S. markets; indeed, there is good evidence that the U.S. is where most international investors want to be. So why are consumer names in the U.S. outperforming cyclicals?