Let's suppose President Obama's leakage of a superior jobs report was correct. Would you have been prepared?
This is what we should take away from this morning's underwhelming number.
Well, the most overcrowded trade right now remains intact. Fund managers are still betting against a rise in interest rates.
Whether it be the people I talked to at the SALT Conference in Las Vegas last month, or the participants at the TMANY (Treasury Management Association of New York) Cash Exchange Conference my colleague, Kate Kelly, talked to yesterday, nobody is factoring in the possibility of higher rates for the remainder of 2010.
If the number had been strong (and according to the president, it was very close to being so), coupled with the comments out of the Fed this week, the end of the easy money cycle would be closer than we thought.
My call-to-action: position your portfolio for higher rates, and here's why:
While a strong employment numberwould have been promising for a healthy equity market, it would most likely have signaled a snapback in the bond market. And that snapback will likely still come.
And that would make for some serious headwinds for income-bearing stocks, which tend to be less attractive in a rising-rate environment.
CNBC's: The Strategy Session
- Help Wanted: Job Listings Offer an Encouraging Sign
- Private Employment Grows Slowly; Weekly Claims Drop
Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, begins Monday, June 7 at Noon ET on CNBC.
Gary Kaminsky does not hold any equity positions.
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