This morning’s NFP jobs report saw the economy gain 126,000 jobs in March. But this number was significantly lower than economists consensus estimate of 245,000 jobs. Note that this isn’t the first time (nor the last time) that economists have been wrong.
That said, the timing for a ‘bad’ jobs report couldn’t be better. Literally and figuratively. Here are a few random thoughts from yours truly, with some help from the twittersphere:
1.  The U.S. Dollar Index has been overheated for a while. Although the Dollar was starting to show some backing and filling action already, the poor jobs report appears to be a catalyst for a deeper pullback.
2. Investors have been getting complacent. Despite the market “chop”, the S&P 500 has been rangebound and near all-time highs for some time. We could be working through a broader correction in time rather than price, but a nice selloff this spring would be a good thing, in my opinion.
Here’s Fil Zucchi’s insights on the near-term complacency heading into Friday’s jobs report:
Going into job #’s w/ 3m $VIX curve a complacent +3.8. Last 2 NFP days $SPX dropped 10 & 29 pts. No worries out there. $SPY — FZucchi (@FZucchi) April 2, 2015
And here’s Urban Carmel on the need for a more complete selloff:
What’s needed is a more complete sell off to set up a rally that has some upside. Incomplete sell offs lead to weak rallies — Urban Carmel (@ukarlewitz) April 2, 2015
After months of sideways chop, it would be nice to see price retest the 1975 to 2000 range bottom (or perhaps even break that). Not a call, just an observation that prolonged sideways action usually requires a selling “refresh” (and retest of lower price boundary).
3. Bad news deserves a tombstone at the cemetery. It’s often released on weekends or holidays, and often not as bad as many make it:
Breaking: Holidays and weekends love to bury bad news. The usual fun & games. #NFP
— Andy Nyquist (@andrewnyquist) April 3, 2015
Urban points out that some jobs variance is to be expected during a bull market:
It’s a regular feature of NFP to vary from less than 100k to 400k during every bull market. pic.twitter.com/c7z2deKtWt — Urban Carmel (@ukarlewitz) April 3, 2015
4. And you’re surprised by the jobs report? The U.S. economy has lacked the steam of a robust recovery all along. Just look at the bond market. And, if we get even more granular, yields have been falling for a few weeks.
Here’s Ken Shreve on this dynamic:
Hmmm…maybe the bond market is right. #NFP +126K in March, well below consensus est. of 247K. Jan/Feb growth revised lower
— Ken Shreve (@IBD_KShreve) April 3, 2015
Clearly, a slowing economy has kept the bond market elevated. And nobody has understood this better than fellow SIM contributor Jeff Voudrie. But, at the same time, the slowing economy narrative hasn’t been relevant to stocks for a while. And that may be the new normal for a global economy beset by currency wars.
Have a great weekend.
   Follow Andy on Twitter:  @andrewnyquist
No position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
