Jobs Report Kinda Doesn’t Matter

Posted: October 6, 2011 in Business, Technology and Business
Tags: , , , , , , , ,

Tomorrow is a hugely anticipated jobs report.

From a stock market perspective — NOT the perspective of someone out of work and desperate to provide for loved ones, which is certainly a tragic situation — the jobs report really doesn’t matter.

Our economy is now highly tuned for about 10% unemployment… meaning, corporations are doing just fine selling to the 90 out of 95 people who are employed (remember that the definition of “full employment” is 5% unemployed).

But are these employed people spending?

Check the price of oil… as long as oil is behaving itself — and it has — then the employed people will have more money in there pockets to save and spend… which means that what drives the market — earnings and outlook — should be ok.

Regarding tomorrow, after the last few weeks of carnage, investors are expecting a mediocre or poor jobs report.  So that’s already factored in.

If the jobs report surprises to the upside, then we should see a big, opening market spike, followed by a sell-off given the run-up over the last few days.  Buy the rumor, sell the news kinda stuff.

In both cases, once the dust settles, we’ll meander higher in anticipation of good earnings and outlook… all contingent on, of course, nothing falling down and breaking in Europe for at least a couple of weeks…

… which, in a couple of weeks, you just know something will fall down and break in Europe.

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