(For those who say I just don’t get it …get this!)
Near moments ago the much anticipated announcement of the Unemployment numbers delayed report was released. Usually this report is due on the last Friday of the month but, with the shutdown which just ended, it was delayed until today.
This report is what is know in the industry as “market moving data.” If it was bad (meaning showing job job losses rather than increases) the markets would act reflexively negative in a proportionate decline and vice versa. Which for decades made sense to anyone or everyone. Yet, not in today’s world.
The report released was “dismal” in many eyes. First: It was well below the estimates of the economy adding 180K jobs in the prior month. The actual number? 148K. (As always the economists just nailed it! But, I digress) However, the UE rate fell to: ( wait for it….) 7.2 good news right? Well…as always – not really. It fell because more people have stopped looking. (you can read a popular explanation I’ve written here.)
And how was all this bad news viewed in today’s financial markets? Below is a chart to show you. The red arrows show you where the market was moments prior to the announcement, and immediately after.
So how does all this bad not only not cause the markets to not even flinch lower but (and it’s a very big but) propel it once again not only higher but – to a level never before seen in the history of the financial markets? Easy.
The markets no longer care about anything else, other than, if the data will be so bad as to make sure the Federal Reserve will continue pumping the markets with “free money” aka QE. That’s all, nothing more.
If one were to try and continue with the fallacy that the markets are anything more than a casino, I just want to remind you I still have some ocean front property here in Ohio for sale. Although, the bridge in Brooklyn is already under contract. Sorry.
© 2013 Mark St.Cyr
Addendum: I was just sent the following article recently posted at the financial website ZeroHedge.com that shows in charts pretty much what I’ve been saying for quite a while. I’ll attach the link here.