Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Employment Numbers in the Headlights


It's getting harder and harder for market watchers to find true north in this environment, and the wall of worry is rising.

Has it been a month already? Oh yeah. While the S&P (SPY), Dow (^DJI), Nasdaq (^IXIC),and DAX (^GDAXI) all rallied off the bottom last Monday to finish in the black for the week, this Friday, May 4 gives us a tally of April's nonfarm payroll number and sundry other employment-number revisions to delight and disturb. It was quite the big-bang last month, so of course the pattern-loving markets are preparing for more of the same. So I guess, for now, sideways it is.

This week, my Wall of Worry lands at 27 blocks, meaning the level of anxiety in the marketplace is still uncomfortably high. Click on the graphic below for a short comment about each of the issues facing investors, or scroll down for a text-only version of this column and an explanation of how it works.

Wall of Worry (Text-only version)

QE: Reading between the lines of Fed Ben's last statement and Q&A session, "I've got a brand new pair of roller skates, you've got a brand new Q-E. I think that we should get together and pump up the liquid-ity…."

And, action! "All ready and willing to take over as the core driver of world economic growth while China slows, please raise your hand." (America sits silently, eyes down, hands in pockets….)

UNEMPLOYMENT: Magnetic-field-shifting potential as the markets prepare for Friday, May 4 employment numbers. Turn off all powered devices before 8:30 a.m.

INVESTOR SENTIMENT: Bruised, snoozed, and confused.

Housing market tremors hitting the Canadian and Australian metropolis markets. Good time to check out that mortgage paperwork, eh mate?

CENTRAL BANKS: With the world's central banks firmly in the driver's seat of the globe's economies and financial markets, that bike of mine is looking more and more attractive.

EUROPEAN ECONOMY: There's no need to fear, the German economy is here! Or was, as it slips closer and closer to dropping below a "50 PMI" (Purchasing Manager's Index).

THE EUROPEAN UNION: Maybe the healthy countries -- like Germany and...uh, like, well…others -- leave, and the sick countries stay, devalue the euro, thereby reducing their debt load and making themselves more globally competitive. Won't that be a fun couple of days.

SOVEREIGN DEBT: It's all about supply and demand. My guess is supply wins.

SPAIN: Olé! Another successful bond offering. Keep the red cape handy though, as this debtors' bull fight is far from over.

10-YEAR TREASURY YIELDS: Back below 2.00% and drawing more investors than ever. Man, you just can't make this stuff up…unless you are the Federal Reserve, that is.

FINANCIAL INSTITUTIONS: "Ch-ch-ch-ch-changes, turn and face the strain…"

VOLATILITY: Spring has sprung, the volatility has ris', I wonder where the volume is?

Lloyd: You know, you never talk about your family.
HAL: Nothing special. Typical childhood.
Lloyd: Yeah, what about your parents?
HAL: Mother was an incubator, Father was the contents…
Lloyd: Walked right into that one.

CHINA: What will its 2012 GDP be? "Pick a number, any number…."

STOCK MARKET TECHNICALS: Ruled the roost for three weeks but now looking like Old Man Fundamental is cock of the farm once again.

IRAN: Like a baby with a nuke-erector set. Backing down for the moment and crying foul -- Waaah! -- because no one wants to insure oil tankers carrying their "crude."

OIL PRICES: Shimmying this way, bobbing that way, but basically staying comfortably and stubbornly above $100/bbl.

INDIA: Got a new slingshot called Agni V that can launch a missile all the way to Beijing. May be time for the US to restart its slingshot mission to Mars in case things ever get out of hand over in Asia-Pac.

EARNINGS SEASON: Almost done. But just as the last few flips and turns on the roller coaster are the ones that get to you, it's likely the final fear-for-our-lives screams are still to come.

US PRESIDENTIAL ELECTION: Let the hate, blame, and humiliation begin!

Getting a little bit antsy about the Koreas acting out a modern-day Hatfields v. McCoys just across the stream.

NORTH KOREA: Just across the fence Mr. South Korea calls out to his wife, "Honey, our crazy neighbor is threatening to cut down our tree again!"

FRENCH ELECTIONS: Promises, promises, promises…give 'em if you got 'em because the critical May 6 election is gonna be all about them and not about reality, reality, reality.

THE CLIFF: Looking more and more like the US deadline headline story of the year. Dr. Frankenstein, I command you to reanimate the Wall of Worry countdown clock!

NETHERLANDS: Netherlands literally means "low countries." Appropriately named as it joins the group of southern budget busters -- Spain, Italy, Greece, and Portugal -- which are all feeling low right now.

Not dropping, not popping, just hopping about. Could be doing a double Dutch with oil prices. Lemme check the playground tomorrow at recess and get back to you.

What Is Lloyd's Wall of Worry?
by Lloyd Khaner

Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.

Typically the term "wall of worry," refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.

This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."

In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
Positions in SPY
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos