Non-farm payrolls declined only 20k in April versus expectations for about 75k, and the unemployment rate ticked DOWN to 5.0% versus expectations of an up tick to 5.3%. Needless to say, this news is causing the futures to spike aggressively upward this morning and may be responsible for a breakout from the 1400 level that has served as the S&P 500’s fulcrum point for most of the past twelve months.
Folks are asking, does this news mean we’re out of the woods? From our point of view, yes. But I’d also argue that little Miss Market has been marching over the river and through the woods for awhile now. The S&P 500 actually bottomed nearly two months ago and has been on a silent journey from 1270 to 1400 — a largely unnoticed, 10% move.
Of course, CNBC and Fed Futures are already discounting the potential for Fed rate HIKES this fall. My guess is that it is a bit premature to be thinking this already, but even so, the fact that the market can rally even in the face of such thoughts is a testament to a severe shift in investor psychology in recent days. Sometimes, it’s just nutty. On second thought, most times it’s just nutty.
Earlier this week, I blogged about why I Hated The Consumer Sentiment Survey as an economic indicator and how uncanny it seemed at marking stock market bottoms. Well, I repeat, it’s just uncanny.
Little Miss Market has been on a long and arduous journey. Be sure to give her a hug when she comes around that corner.
Cuz I’m sure she’s been lonely.
