The poor Non-Farm Employment Change number will serve as a case study in psychology years from now. A bad report (aside from an Unemployment Rate which actually improved) showing less gains than expected actually brought upon a jump on Wall Street. Why? Because investors see the numbers and believe it is a sign that cheap money via the Central Banks is going to keep on coming in a steady stream.
In other words, bad numbers mean that there will be fewer options to profit from other than stocks – as long as a bull market sentiment exists and Central Banks such as the Fed and ECB are forced to continue to keep interest rates near zero percent. And how long will it all last? Until it doesn’t. We do not intend on being smart asses, but the facts on the ground point towards a continued ‘fools run’ toward equities until the ship runs into an iceberg. It is as if everyone is a passenger on the Titanic.
The U.S. jobs numbers are a sure indication that while the Official Unemployment Rate improves and the government tells us everything is fine that we are all supposed to be ‘happy idiots’ and listen to their dribbling as we watch in bemusement that no actual jobs are being added in significant numbers. In other words, look but don’t ask.
Gold has interestingly ‘creeped’ up to 1266.00 as the weekend approaches. Safe haven seekers or merely speculation? Stayed tuned because next week is sure to be quite entertaining. Global investors are being treated like passengers on a ship that are pointing towards danger and are being told everything is fine and have no fears. This is why insurance exists and this is why other markets besides equities are going to see plenty of action including FX, commodities, and bonds as market participants diversify. Simply put the crisis that the international economy has suffered from the past six years is not over. We continue to skate on thin ice.