As we stated in an earlier post, with earnings season (90 day treadmill) mostly finished, the clues for our progress lie in the economic numbers, with extra focus on the employment situation.
This morning the Labor Department released the Unemployment report which held steady at 9.7%. In a unique win-win situation, many economists had varied expectations, leaning mostly negative, due to the terrible weather experienced across the country during the last reporting period. With such wide expectations, a negative report may have been written off as a one time event and a “right in line” (the report we received today) report might be greeted positively.
Our view, again formulated from company conference calls, and press releases, are that companies are tentatively hiring, which bodes well for the capital markets, our economy, and our country. Again, our thoughts are that the eventual unemployment rate will not go down to the 4% zone where it hovered for many recent years, but decline from 9.7% to a 5-7% number, which might be greeted with positive feelings by the capital markets.
Remember this usually does not happen in a straight line!
There will be events that shake confidence, again leading to our choppy market theme.
Have a Good Weekend !