Friday, July 8, 2011

The sky will fall on Tuesday (or, if not on Tuesday, maybe on Wednesday?, or maybe on Thursday?)

After watching the stock market go up yesterday, then down this morning – and both yesterday’s gain and today’s decline were attributable to news about jobs Thursday’s news was positive, Friday’s news was negative. – I’ve again come to the conclusion that no one knows “shit from shinola” when it comes to predicting ups or downs in the economy or ups or downs in the stock market.

NEW YORK (Dow Jones)--U.S. stock futures plunged Friday morning after the government's latest reading on the labor market showed the U.S. economy barely added jobs for a second straight month.

About an hour before the open, Dow Jones Industrial Average futures plunged 109 points, or 0.9% to 12571. Prior to the data, Dow futures had been up 30 points.

Standard & Poor's 500 stock index futures fell 14 points to 1338, while Nasdaq 100 futures dropped 19 points to 2396. Changes in stock futures do not always accurately predict stock moves after the opening bell.

Nonfarm payrolls rose 18,000 last month, far less than expected, as small gains in the private sector were just enough to outweigh continued government job losses, the Labor Department said Friday in its survey of employers. The jobless rate, which is obtained from a separate household survey, increased for a third straight month to 9.2% in June, the highest level since December 2010.

Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 125,000 and the jobless rate would remain steady at 9.1%.

The disappointing report comes as investor optimism had been increasing over the last few weeks. The Dow rose Thursday for a seventh time in eight sessions, climbing 6.6% throughout the streak and bringing the blue-chip index within 100 points of its three-year closing high reached in April.

Joel’s further comment:

Well, let me repeat this sentence that appeared in the article above:

“Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 125,000 and the jobless rate would remain steady at 9.1%”.

Who are the “economists” that Dow Jones Newswires is polling? “They” estimated non-farm payroll (employment) would rise by 125,000, but that didn’t happen, non-farm payroll (employment) rose by only 18,000. Not even close. What is the point of guessing when it is, I think, absolutely perfectly clear that everyone is just “guessing” at the monthly numbers. As Lewis Black would likely put it, “no one knows shit; everyone is just making the shit up as they go. And, if we are paying attention to what “they” are saying, than we are the real morons, not them.”

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