Traders: Expect a 'Blowout' Jobs Report?
The jobs report has been weighing on the minds of traders all week as numbers come out on Friday, a day when the market is closed. Can traders expect a game-changing report, fueled by government jobs and a strengthening private sector?
Joe Lavorgnia, Chief Economist at Deutsche Bank, gives the three reasons why he thinks the report will be strong. First, he says, temp hiring will be 'off the charts' with so many companies filling in the need for extra help with temporary workers. Historically temp hiring has had a really great track record in calling turning points in the labor market, he points out.
Second, you can expect the ISM employment data to be strong, and continue to accelerate. With a 'massive inventory correction,' manufacturing jobs should be coming back following strong manufacturing numbers from key economic players on Thursday.
Lastly, Lavorgnia expects to see a change from "weather workers," as he points out about 1 million jobs were distorted by the northeast's inclement weather, which he expects to combine with the first two reasons to propel the jobs number higher on Friday.
Lavorgnia expects to see 350,000 jobs to be added in the report, which is far above the consensus of 182,000, but does this set us up for higher interest rates? He doesn't think that a high jobs number will hurt stocks, instead he believes that the higher the number, the more bullish the market will be. He sees benefits of a good number affecting financials, consumer discretionaries and equities in general.
For Lavorgnia's full analysis and the reaction of the traders, check out the video!
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