Zero Jobs, Terribly Bearish, or Surprisingly Bullish?
On Friday bulls and bears were completely at odds over what was next for stocks after jobs growth clocked in at a big fat zero.
According to the latest jobs report, the economy added no new jobs last month – it was the first time that’s happened since WWII.
Although that’s certainly better than a decline, economists had been expecting about 75,000 new jobs.
Bearish sentiment prevailed in the near-term with the Dow plunging by triple digits, however bulls are not without optimism.
They say, this is exactly the kind of jobs report that will compel the Fed to take new action and further stimulate the economy.
What should you make of it? How should you position?
Instant Insights with the Fast Money traders
Trader Stephen Weiss falls into the bear camp. “I think the jobs report presages something far more terrible,” he says.
Weiss is not only expecting a US recession he thinks the entire globe is going into recession. “I know that’s controversial but every economy except for China is contracting and that’s going to come home to roost.”
Trader Brian Kelly sees it the same way. He thinks the bond market is telling the story. “The 30 year bond is screaming. It’s saying the economy is getting weaker.”
And if you’re looking for trading ideas, Kelly suggests a long position in the TLT or selling short Germany via the EWG.
Trader JJ Kinahan is also looking for a down move, however he’s not quite so skeptical. “I think the S&P re-tests 1160,” he says. In the near-term “I think we have to go a little bit further down.”
Trader Patty Edwards is in wait and see mode, however, she still sees opportunities. Edwards continues to think Nordstrom is a buy. “Their customer is more about their personal balance sheet and not the jobs number.” However, she concedes the situation isn't good for middle market retailers. “Kohl’s and JC Penney , I think there are issues, there.”
OptionMonster Jon Najarian, however, has been a voice of optimism. Earlier in the week, he told us that a weak jobs report could generate a policy response such as QE3. Andrew Tilton of Goldman Sachs concurs. "A weaker report increases the odds of more Fed action."
In addition, Najarian thinks the jobs number, as well as consumer sentiment data may not be telling the whole story. "Consumers have remained very resilient despite high unemployment and higher prices at the pump," he says. "That's amazing. Don't underestimate the strength."
And bulls have other ammo, Najarian says. He believes there are plenty of catalysts during the month that could "surprise to the upside" including the President’s speech about jobs scheduled for September 8th or the regularly scheduled September Fed meeting. "We may go lower early in the month, but I see every reason for the rally to resume after that."
What do you think? We want to know!
UNUSUAL ACTIVITY: FINANCIAL ETF
JJ Kinahan has spotted unusual options action in the Financial ETF.
A larger than usual volume of the Oct 13 puts and Oct 11 puts suggests to him weakness in the sector “could go on for 6 to 8 weeks or maybe even longer.”
MONEY IN MOTION - IS EUROPE’S CRISIS WORST?
The euro again landed in the spotlight ahead of expected developments overseas next week. What must you know?
Find out from Willie Williams of Societe Generale? Watch the video now!
BUY DEFENSIVE STOCKS LIKE COCA-COLA?
Shares of Coke hit a new 12-year high this week as investors jump into perceived safer defensive plays.
Should you re-position your portfolio?
Defensive stocks, especially those with dividends have done well this year, says Patty Edwards. In addition to Coke, look at Philip Morris, Johnson & Johnson, Bristol Myers, and Kimberly Clark.
BULL MARKET LEADER NETFLIX CRUSHED
Shares of Netflix dropped sharply on Friday after Starz said it would not renew contracts with the company.
As Netflix loses this valuable source of movies where does the stock go?
Find out from Janney Montgomery analyst Tony Wible. Watch the video now!
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Trader disclosure: On September 2, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Weiss owns (KO); Weiss owns (MDRX); Weiss owns (JPM); Weiss is short (X); Edwards is long the Canadian Dollar; Edwards is long (PM); Edwards is long (RWS); Kinahan is long (BAC); Kinahan is long (C); Kinahan is long (WFC) puts
For Brian Kelly
Accounts managed by Brian Kelly Capital own (FXE) puts
Accounts managed by Brian Kelly Capital own (TLT)
Accounts managed by Brian Kelly Capital own (JJG)
Accounts managed by Brian Kelly Capital are short (EWG)
Accounts managed by Brian Kelly Capital are short (FXF) options
Accounts managed by Brian Kelly Capital are short (SLV) options
Accounts managed by Brian Kelly Capital are short (JJC) options
For Patty Edwards
Trutina is long (SDS)
Trutina is long (AMZN)
Trutina is long (AAPL)
Trutina is long (C)
Trutina is long (KO)
Trutina is long (GOOG)
Trutina is long (GDX)
Trutina is long (PEP)
Trutina is long (GLD)
Trutina is long (VZ)
Trutina is long (SLV)
Trutina is long (PGM)
Trutina is long (JNJ)
Trutina is long (BMY)
Trutina is long (KMB)
** No Disclosures
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