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Non-Farm Payrolls

Non-Farm Payrolls

The number we’re looking for is 212,000…

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Friday, April 5. The Bottom Line segment of today’s podcast starts at (3:07) for listeners who want to skip ahead.

State of Play

Stocks dropped yesterday, Dow Industrials saw the worst of it, putting in their worst day in more than a year. Which is kind of impressive seeing how it was just a 1.4% drop. As we look at our board of indicators at 06 :

  • Stock index futures are pointed to gains led by tech. The Nasdaq is up 0.4%, with the S&P 500 up 0.3%;

  • Bonds are seeing a tiny bit of selling in anticipation of non-farm payrolls at 0830. The yield on the 2-year is up 2 basis points to 4.66% whilst the 10-year yield is up 3bps to 4.34% (yields move inversely to prices);

  • Commodities aren’t doing much. WTI crude oil is unchanged at $86.60/barrel. Copper is down 0.7%. Silver is retreating a bit from its recent rally, down 1%;

  • Cryptos aren’t doing anything either. Bitcoin is unchanged at $66,850.

Today’s Known Events

It’s all about non-farm payrolls today. The Bureau of Labor Statistics publishes this report at 0830, the same way it does (almost) every first Friday of the month. Economists who were surveyed expect 212,000 new jobs, down from the 275,000 seen last month. This would keep the unemployment rate at 3.9%. Average hourly earnings are expected to increase by 4.1%, a little less than the 4.3% recorded last month.

The Bottom Line©️

Friendly reminder that NFPs can produce outliers. There is always an immediate market reaction to these until investors remember this and scale back their trades. At this point we’re firmly back to hoping for a low number so it improves chances for a Fed rate cut. Seeing how this week’s selloff has (ostensibly) been about these very prospects, it stands to reason that a hotter than expected number could lead to selling.

If the number shows dwindling job growth then we could get a rally. But again, watch for outliers. If the number is too good (meaning bad) the market will likely get wise to it after a few hours. That’s been the pattern in the past, at least.

We sure could use a catalyst for a move higher. This week (quarter) has been pretty bad. A few more days of this and maybe there will start to be talk about a correction. That may be a buying opportunity, if it happens…


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The daily podcast discusses the major market activity and economic data release schedule for the day ahead, with a contrarian bent. Also includes regular podcast episodes a day (or more) early and without ads or announcements.