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Physics, Meet Mr. Market

By Matthew Kerkhoff

 

Good Friday came with a not-so-good monthly employment report, but the market is taking it in stride. With equity markets closed Friday, today is the first opportunity for investors to adjust their holdings, and they are buying.

 

The Labor Department’s report showed a continued deceleration in hiring during March; only 126,000 jobs were created. I should remind you that this report is volatile, heavily dependent on the seasonal factor that is applied, and often sees large revisions in future months (last month’s report was revised down by 69,000 jobs). But regardless, it is one of the most important data points analysts and investors have, and it’s now supporting the deteriorating economic trend that we are seeing elsewhere.

 

The chart below shows the recent but significant decline in job creation. Last month’s (February’s) report handily beat expectations, and the market sold off that day. March’s report came in dramatically lower than anticipated ... Log in or subscribe to continue reading.


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