Job Numbers: Market Bulls Like The Count
The bulls got what they wanted--nonfarm payroll TWICE the estimate at 160,000. Remember the game now: good news is good news, that is, we need strong economic data now to dampen down recession and larger slowdown fears. S&P futures up 10 points. Strength was in professional and business services, leisure and hospitality strong.
August revised upward by 4,000, September revised downward by 14,000. Dollar rallies and recession fear fade some. The tendency is to blame it all on the financials, and indeed the declines here have been stunning: the S&P Financials Sector is down 10% in three weeks.
But the bigger--and equally important story--is the slow erosion of leadership ex-financials. The S&P Retail Index is also down nearly 11% in the same three weeks and is now at 52-week low.
More worrisome is energy stocks; the S&P Energy Sector topped out three weeks ago and is now down 5%. Energy stocks, as Chevron and Exxon illustrate, are not just having problems with refining margins; their overall oil production is down.
This leaves our two market leaders: techs and materials. Both sectors hit historic highs this week. One trader joked to me, "If this keeps up, one day the tape will be Google and Baidu up, everything else down."
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