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Freaky Friday Potpourri: The Take on Payrolls

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There's nothing going on except the rent.

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The new phone books are here and the non-farm payrolls are out. Aside from some obvious questions-such as why farmers are excluded from this data-the release offered a few answers. In particular, we now know the most recent fate of stated employment.

We opined yesterday that whisper numbers were north of +100,000 (vs. expectations of –35,000). Indeed, following the recent breakout through S&P 1120-the downtrend from the 2007 top and a 50% retracement of that decline-the bulls have been large, in charge, optimistic and seemingly impenetrable.

As it turns out, we lost 85,000 jobs (sans farmers) and the unemployment rate remained constant at 10%. That's a downtick vs. the whisper, which is a double-edged sword for traders. Why? Rally phases typically end (pause) on good news not bad and second, a robust report would have jacked the US Dollar, which would have derivative implications for the carry trade.

To that end, there was a joint advisory press release issued late yesterday by the Federal Reserve, FDIC and other agencies urging institutions to "stress test" their risk profiles against higher interest rates. Given the sheer size and correlation of the "carry trade," this should be considered fair warning for those involved.

Watch the dollar, monitor internals and understand we'll likely see at least one fade (in the opposite direction) in the early going. From there, we've got six hours before a weekend full of football and some down time from the tape. Make it count, Minyans, and hit it hard.

Random Thoughts
:

  • Bonus tax? Pishaw! London investment banks are doubling pay to lure back analysts and traders. You can agree or disagree with this step but either way, it's further fodder for the emerging class war that is one of our central themes for 2010.

  • Many I speak with are going through a tough time and I always tell them to "invert the upside-down V." Instead of looking at what you've done, how much you made or whom you've been with, look forward and think positive. No matter who you are, if you're reading this you've got it better than most.

  • Case in point? My buddy is having marriage trouble and said to me, "I can't decide whether I'm more miserable with her or more miserable without her." I told him he had it backwards; that through his lens, he was miserable either way. "Are you happier with her or happier without her?" I asked, "That way you win either way."

  • History doesn't always repeat but it often rhymes.

  • Minyan Joey shares this chart pointing to "multiple vibrations" in the January 15-18th time horizon.

  • The high beta complex -- Google (GOOG), Amazon (AMZN), Research in Motion (RIMM), Baidu (BIDU) -- has been shouldering supply of late. THE question is quite simple: is this a precursor to a downside reversal or a simple rotation out of year-end bang-for-the-buck ketchup plays into laggards such as the financials?

  • Those piggies acted fabu' yesterday, lending credence to the potential for a bullish cup-and-handle formation in the BKX.

  • Have you seen the new Hoofy and Boo shwag on Main Street?

  • Chatter about a "short sale curb" is making its way throughout the market. It's like Vu'ja De all over again!

  • See American Express (AXP) $42.25 please.

  • I wonder what Bennet would say about what's going on these days?

  • This likely won't help the mood in the Middle East.

  • Congrats to the Crimson Tide on the National Championship. It's too bad the teams couldn't play at full strength but snaps to Texas for keeping it close until the last few minutes.

  • I've gotta keep it short and sweet this morning as I've got more meetings than J-Date today. Good luck, think positive and remember -- you're a Minyan!

R.P.

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