Posts Tagged ‘ADP report’

Taking the Market’s Temperature

Taking the Market’s Temperature

Courtesy of Joshua M Brown, The Reformed Broker 

Just some random market thoughts and observations as we head into the holiday weekend doldrums…

* The S&P 500 looks to finish the 2nd quarter 2010 down 11%.  An absolute slaughterhouse from the end of April on. 

* You know the bulls are spent when we couldn’t even get the traditional End Of Quarter Markups.  Brian Shannon (Alpha Trends) called it "end of quarter window-smashing" yesterday with the indexes down close to 4% apiece.

* I’m hearing chatter about the possibility of a short squeeze but I’m not sure I see one brewing.  You would need something on the horizon that adds a little fear for the shorts.  You’re going to tell me that they’re afraid of tomorrow’s ADP report?  Or the employment numbers due out Friday? 

* (Supposedly) positive news from Europe’s banking wreck yielded little or no reaction here in the States this morning.  But we all know how negative news is reacted to lately.  A sentiment indicator if ever there was one:  Good News = Blah, Bad News = Death & Dismemberment.

* Apple finishes down more than ten bucks on news of a Verizon iPhone launch in 6 months.  So apparently, 10 million plus new iPhone users is an underwhelming possibility.  Another sentiment touchstone for sure.  Verizon was down, too.  Oh boy.

* No one running big money is looking to do anything heroic this week, regardless of stocks having gotten, shall we say, a bit cheaper.  Other than BP (because of Exxon rumors) and the Tesla IPO (hyped beyond belief), I saw little appetite for anything this week.  The selling has stopped in many stocks as of this writing, but now what?

***

Anyway, these are just some random observations as I take the market’s temperature.  I realize that taken together they are incredibly negative, but that’s the mood. 

We’ll see how she finishes the week. 

 


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December 2009 Non-Farm Payrolls Report Preview and Forecast

December 2009 Non-Farm Payrolls Report Preview and Forecast

Courtesy of Jesse’s Café Américain

As you may know, and as we suggested the other day, the ADP report, based on payroll data from American business, showed a loss of 84,000 jobs in December, versus expectations of a loss of only 75,000 jobs.

We also suggested that this Friday’s US Non-Farm Payroll Report will be a positive surprise, at least 10,000 or so jobs to the good. Here are the details.

The Imaginary Jobs component, also known as the Bureau of Labor Statistics Birth-Death Model, will contribute approximately 72,000 jobs allegedly created by small businesses with less credible evidence than a Bigfoot or an Elvis sighting.

Not that they are always positive. Each January there is an enormous job loss shown here, in the neighborhood of about 350,000 jobs. The reason they do this is because the seasonal adjustment factor is so huge in January that this imaginary jobs number does not matter, since it is subtracted (and added) from the numbers prior to the seasonal adjustment.

We can expect this model to continue to show positive annual jobs growth until the End of Days, and perhaps longer than that if there is fireproof paper in the afterlife. [click on tables and charts to enlarge]

The ‘headline jobs number’ which is the Seasonally Adjusted Number will be a positive 58,000 jobs, and provide much joy and exultation in Washington and on Wall Street. Pundits like Paul Krugman will caution that the economy is still fragile and a second stimulus bill will be required to insure these positive gains.

What is the basis for these projected numbers? The same basis used by the BLS – nothing. At least nothing connected with the real world. These are the numbers that bureaucrats might mindlessly crank out in response to the desire of their bosses for certain targets, a phenomenon well understood by most corporate financial staffs.

We drew the trendline on that chart earlier this year, assuming that the government would wish to show a steady job increase with a positive number by December, or at least January. So far we have not been disappointed, although there have been quite a few revisions along the way.

There will also be revisions this time again, with some jobs added and borrowed from prior months to help


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Which Way Wednesday – A Brand New Q!

Well we sure ended Q2 with a bang.

Just because we're in cash doesn't mean we don't have some fun and our final index play of the quarter was a nice 70% gainer on the DIA $86 puts.  Other than a TNK spread and some quick GS puts (up a quick 20% and out), that was our only play of the week so far so we're really picking our spots for that sidelined cash.  Now that Q2 is finally fading into the sunset, it is time to see what's real and what isn't and we're really looking forward to earnings season, where we hope to separate the haves from the have-nots.

Market ManipulationAs David Fry pointed out regarding yesterday's action: "Stock price declines today were milder than expected given the news. But, silly me, I forget that this is the quarter and mid-year end—there are bonuses to be had and bullish headlines to be written. Why did the market rise this quarter? An overwhelming amount of liquidity plus an equal amount of BS."  It has indeed been a very frustrating quarter to be a bear, mainly because you have an administration that turns a blind eye towards bullish market manipulation because it's "good" for the economy.   Unfortunately, it's only good for the economy the same way rigging baseball so the Yankees would play the Mets in a subway series would be "good" for New York sports – it may be good in the short run but, if people begin to distrust the validity of the games, then they may lose interest altogether…

Professional traders like the market to make some sense.  We like to see X data have Y effect in a fairly reliable curve.  Consumer confidence fell 10% yesterday and consumer spending is 70% of the GDP so you would think it would affect the market by more than 1% right?  Not this market – nothing seems to matter and that's OK, we're getting used to the scam but we're now playing the scam – not the market itself and that's never a good thing and it's certainly no reason for us to commit our long-term capital and that's the only way this market will ever get healthy again. 

Jobs overseasMeanwhile, over in reality, steel prices in the US fell 3.1% in June – the
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ADP: Department of Records Revision

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ADP: Department of Records Revision

Courtesy of Jesse’s Café Américain

"April’s reading was revised to show a reduction of 545,000 workers, up from a previous estimate of 491,000."

Is an 11% month over month change in an employment number a revision or a rewrite?

The ADP report is supposed to be based on actual reports from private industry.

This pervasive pattern of ‘good numbers’ that result in stock market rallies and the massaging of public opinion, only to be replaced by downward revisions thirty days later, with little notice or quote, is cynical manipulation of the media at best, and a dangerous slide into social engineering by an increasing distortion of ‘reality’ at worst.

If you have not read the novel or seen the movie lately, 1984 is worth a look.

Bloomberg
ADP Estimates U.S. Companies Cut Payrolls by 532,000
By Courtney Schlisserman

June 3 (Bloomberg) — Companies in the U.S. cut an estimated 532,000 workers from payrolls in May as the labor market showed little sign of improving even as the recession abated, a private report showed today.

The drop in the ADP Employer Services gauge was bigger than economists forecast. April’s reading was revised to show a reduction of 545,000 workers, up from a previous estimate of 491,000.

Companies from General Motors Corp. and Chrysler LLC to American Express Co. continue to cut jobs to control costs even as the economy shows signs of stabilizing. Mounting unemployment will restrain consumer spending, muting any recovery.

“Still losing over half a million jobs a month is hard to get excited about,” Derek Holt, an economist at Scotia Capital Inc. in Toronto, said in a note to clients. “Steep job losses still signal a deeply troubled economy.”

…Economists forecast the ADP report would show a decline of 525,000 jobs, according to the median of 28 estimates in a Bloomberg News survey. Projections ranged from decreases of 425,000 to 580,000.

Economists’ Forecasts

A government report on June 5 may show payrolls at companies and government agencies shrank by 520,000 in May and unemployment rose to a 25-year high of 9.2 percent, according to a Bloomberg survey of economists.

Job-cut announcements last month showed the smallest increase in more than a year, Chicago-based placement firm Challenger,


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The Technical Traders

Massive Price Reversion May Be Days or Weeks Away

Courtesy of Technical Traders

Our researcher team believes a massive global market price reversion/correction may be setting up and may only be a
few days or weeks away from initiating. 
Our team of dedicated researchers and market analysts have been studying the markets, precious metals, and most recently the topping formation in the ES (S&P 500 Index).  We believe the current price pattern formation is leading into a price correction/reversion event that could push the US major indexed lower by at least 12 to 15%.

Historically, these types of price reversion events are typically considered “price exploration”.  Over time, investors push a pricing/valuation bias into the ma...



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Zero Hedge

Jeffrey Epstein Paid Doctors To Drug 'Sex Slaves': Report

Courtesy of ZeroHedge View original post here.

Victims of dead pedophile Jeffrey Epstein say he paid doctors and psychiatrists to dope them up with anti-anxiety and antidepressant medications, according to a new report in the Miami Herald

"There were doctors and psychiatrists and gynecologist visits. There were dentists who whitened our teeth. There was a docto...



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Insider Scoop

Notable Insider Buys In The Past Week: AbbVie, Kraft Heinz And More

Courtesy of Benzinga

Insider buying can be an encouraging signal for potential investors.

A packaged food giant and two drugmakers saw notable insider buying activity this past week.

Some of this insider buying occurred alongside insider sales.

Conventional wisdom says that insiders and 10% owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit. So insider...



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Phil's Favorites

Peloton IPO Guide... And Why It Makes No Sense

Courtesy of ZeroHedge

By Scott Willis via Grizzle.com

BOTTOM LINE

At the end of the day, Peloton is a gym membership pretending to be a tech company.

We fully admit the product is exciting and unique in the market, but Peloton still faces the same problem...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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