Many market observers and economists had high hopes for this month’s Non-farm payroll, guesstimating a number north of 300,000. Consensus range for the number was coming in at 325,000, the thought being a big jump from the previous -33,00 (revised this month to 18,000) would occur in a post hurricane, back to the norm month. In a rare occurrence my projection of under 300,000 turned out to be right. 261,100 jobs were added in October, less than bounce many were looking for. But the two prior month’s revisions accounted for a 90,000 increase. The greater concern is for Average Hourly Earnings, coming in at 0.0%, unchanged which translates to a decrease. In usual fashion, the index markets didn’t seem to mind.
It has been a busy week for news and data. The jobs data was preceded by a new Federal Reserve Chair nominee and the release of the new proposed tax plan. The nomination of Jeremy Powell did little to spook the markets, he is perceived by many to be very similar to current Fed Chair Yellen. His selection does not give the market much of a concern that the fed will change its current course. Consensus opinion, not more hawkish, not more dovish, steady ahead.
AS the S&P 500 , and Dow Futures put in highs this week, in was another reminder that this market seems unstoppable. Nothing seems to knock it down, just occasional speed bumps here and there. Personally this gives me concern for what a correction will look like when it does show up. I have the feeling the longer we go without some significant pullbacks, when the time comes we will be having a big, big move to the downside.
Feel free to contact my to talk about some downside protection using puts and put strategies in the equity index futures.
Sincerely,
John Weyer
John Weyer
Director Commercial Hedging
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