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The Keep-You-Up-At-Night Number of the Week, Non-Farm Payrolls, Comes Out Friday

By

The Wall of Worry is mostly focused around Friday's announcement, and then we will return to a sleepy news period -- or so we hope.

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Well, we survived it. The Dow (INDEXDJX:.DJI), S&P (INDEXSP:.INX) , Nasdaq (INDEXNASDAQ:.IXIC), and Nikkei (INDEXNIKKEI:NI225) all had their first down month of 2013. Not to worry, probably, as history is on the side of more gains during the second half of the year. Double-digit first-half gains most often beget more of the same. Now back to the latest issue at hand.

Frailty thy name is... non-farm payrolls. You just know Shakespeare would be all about the stock market if he (or she or they – a nod to the conspiracy crowd) were alive today. This week's play would center on a countdown to Friday's big job number and how it would affect the behavior of the town's governing body a.k.a. the FOMC. And let me tell you, fine market theater patrons, this drama will be played out over many months and many jobs reports.

Once this July 5th fireworks show is over, we go back into a brief, slow news, pre-earnings period. Yes, it is time for public companies to show us their profitability once again. Pre-announcement season wasn't too bad so we might come away with a clear shot at a leisurely August break. Of course, the markets will focus on corporate projections and match them up versus current expectations so a blissfully uninterrupted frolic at the beach is not in the bag just yet.

This earnings season, remember: "All the market's a stage, and all the companies merely players..."

Click on the image below for an interactive version of this week's Wall of Worry, or scroll down for the text-only version and an explanation of how the Wall works.



QE: "This is the fourth and last time I'm going to tell you that I'm going to take away your candy! Unless of course you're bad and then I will give it right back and then some."

UNEMPLOYMENT: The keeps-you-on-your-toes, prevents-you-from-sleeping-well number of the week. Need it to be not too good, not too bad, but just right... which is anyone's guess.

US ECONOMY: Doing a lot of bragging and promising for a sub-2% grower.

INVESTOR SENTIMENT: See you in September.

HOUSING CRISIS: Will the rising mortgage rates be the Grinch that stole the housing recovery?

EUROPEAN ECONOMY: Iceland opts out of joining the EU. Hey, weren't they the ones who started this mess a few years ago?

US EXECUTIVE BRANCH: Forget calling the plumber to fix the leaks; this may be a job for an engineering construction dam repair team.

SPAIN: Feeling good about already selling 65% of the debt it needs to move in the markets. Uh, it's the rest of it we're worried about.

VOLATILITY: "Gimme a "V." "V!" "Gimme an "O." "O!..."

HIGH-FREQUENCY TRADING:
Lloyd: You are the most destabilizing thing I have ever seen hit the markets.
HAL: (blushing) Oh, I bet you say that to all the algos.

CHINA: We can deal with the carrot-and-stick disciplining, but for goodness sake, don't use liquidity!

GLOBAL ECONOMY: Hard to know who's driving this thing when there appears to be four different steering wheels.

JAPAN: The yen is down, and business confidence is up. Happy sixth-month birthday, Abenomics!

DRAGHI: What do you mean, Ben Bernanke gets to retire!?!

SEQUESTRATION: Let's hope this successful failure does not prompt another such piece of legislation to deal with the debt ceiling.

BONDS: Warning: The Surgeon General has determined that opening your June 2013 Bond Portfolio Statement could be hazardous to your health.

SYRIA: Hell in a hand basket. A really big, centrally-located hand basket.

CENTRAL BANKS: "Dont stop me now, I'm having such a good time, I'm having a ball!"

TURKEY: Learning that running a democracy is a lot more fun when things are good than when they are difficult.

THE NIKKEI: Bull market game back on!

SHIBOR: Back down below 5%. So out of sight for now, but for sure, not out of mind for market players.

BRAZIL: One million people protesting for humane mass transit and what do they get? A billion dollar futbol stadium. Goooooal... not.

ETFs: Investors taking a closer look to make sure the product resembles the pretty picture on the box.

DEBT MARKETS: Confused, but still open.

COMMODITIES: Time to make an appointment for a check-up with Dr. Copper to see if the commodity sell-off is economically systemic or just a short-term bout of market indigestion.


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.
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LK/KCLP Ownership Disclosure: SPY, DIA, GLD.
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