Jobs Number Bad But Financials Still Key For Traders

The March jobs report (and the downward revisions in February) was a bit worse than expected, which is a disappointment for stock traders.

Let's be clear: stock traders want signs of stability and bottoming in economic statistics. They DO NOT want weak numbers on the theory that the Fed will continue to cut rates. They will gladly trade less rate cuts for an improving economy.

The dollar was down on the jobs report, dashing hopes for a dollar rally this week.

The real disappointment today is among those looking for a bottom in financials. This week is the best opportunity we have had to break long-term downtrends in stocks like Goldman Sachs , Lehman ,Citigroup , Wachovia , and many others. Traders have been itching to buy them recently; if they close on the upside despite this news it will be a significant victory for bulls.


1) British Air said there has been a 5 percent fall in business class passengers in March, acknowledging that slower economic conditions is beginning to affect their core business passenger business (first and business class passengers are about 60 percent of their profits).

2) Fertilizer company Mosaic reported earnings well above expectations. Strong demand for food and ethanol have driven prices for Mosaic's phosphate business up dramatically; despite the price increases, net sales in the phosphate business were up 82 percent on big increases in selling prices. They're also expanding their potash business. Raw material costs (sulfur and ammonia) were up significantly. Most important of all: two-thirds of their business is outside the U.S. (Note: Cargill owns the majority of the company).

Questions? Comments?