Payrolls Disaster Proves the Ponzi Isn't Working, Fed Stuck
We had a very interesting day of PA on Thursday after jobless claims rose by 498k vs the 530k expected. Continuing claims sit at 3.69MM, rising by approx. 400k vs last week's print. According to ZeroHedge, we still have over 16MM Americans on some form of income benefits, so of course, take any jobless claims print with a pinch of salt. Remember, the government is essentially subsidizing labour costs for businesses, while stimulating demand, and when this eventually ends, all of those zombie companies that are contributing to this fake rebound, will perish.
Looking at the day ahead, we just saw the much anticipated April Payrolls report which was whispered to be in the range of a whopping 2MM. However, the report was a complete shock to Wall Street with a measly 266k jobs being added to Nonfarm Payrolls, and 218k added to Nonfarm Private Payrolls.
The Unemployment rate rose to 6.1% from 5.8%, showing a deterioration in the labour market in April. The average work week rose from to 35 hours, from 34.9. Someone call the Fed, we're gonna need more free money!
US Futures rose broadly overnight after a rollercoaster ride yesterday saw every sell program be met with a relentless short squeeze. According to Goldman Sachs, Hedge Funds have been shorting the Nasdaq for the past couple weeks, and so, what we saw yesterday, is potentially profit taking flows from these funds. However, after the ugly payrolls miss moments ago, global markets are experiencing some volatility, with the Dow down 0.06% to 34,422, the S&P up 0.37% to 4,209.62, the Nasdaq up 1.4% to 13,780.38, and the Russell down 0.11% to 2,236.35. In Europe, the Dax is up by 0.58% to 15,345.50, the FTSE 100 is up 0.20% to 7,085, and the SMI is down 0.15% to 11,115. In Asia, The Nikkei 225 is down 0.06% to 29,328, the Hang Seng is up 0.66% to 28,596, the CSI 300 is down by 1.24% to 4,992.60, and the Nifty 50 is up 1% to 14,930.
The rotation into growth is now back, with the Nasdaq being heavily bid, while small caps puke. Clearly the talk of tapering has simmered notably after the obvious weakness in the labour market. It's another win for the speculators, as they assume the Fed now has no choice but to continue to support their risk appetite.
The Vix is sitting at 18.1, showing resilience after yesterday's short squeeze into the close. We're still channeling up, and are sitting just below daily resistance at 18.80. We'll be looking for a breakout above 21, for confirmation of a larger move ahead, and are positioned for bearish PA into the close, and next week. The US10Y yield is puking, and is back to 1.51% after losing the 50DMA earlier on in the week. We have downside to 1.35% where the 100DMA is sitting. Needless to say, the knee jerk reaction to flock into bonds is warranted after the ugly payrolls report, and interestingly the dollar is puking after the report to 90.45, which could lead us to believe that the Fed's debasement scheme has spooked dollar bulls. Should be a doozy of an open, so stay tuned.
* I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
Looking at the day ahead, we just saw the much anticipated April Payrolls report which was whispered to be in the range of a whopping 2MM. However, the report was a complete shock to Wall Street with a measly 266k jobs being added to Nonfarm Payrolls, and 218k added to Nonfarm Private Payrolls.
The Unemployment rate rose to 6.1% from 5.8%, showing a deterioration in the labour market in April. The average work week rose from to 35 hours, from 34.9. Someone call the Fed, we're gonna need more free money!
US Futures rose broadly overnight after a rollercoaster ride yesterday saw every sell program be met with a relentless short squeeze. According to Goldman Sachs, Hedge Funds have been shorting the Nasdaq for the past couple weeks, and so, what we saw yesterday, is potentially profit taking flows from these funds. However, after the ugly payrolls miss moments ago, global markets are experiencing some volatility, with the Dow down 0.06% to 34,422, the S&P up 0.37% to 4,209.62, the Nasdaq up 1.4% to 13,780.38, and the Russell down 0.11% to 2,236.35. In Europe, the Dax is up by 0.58% to 15,345.50, the FTSE 100 is up 0.20% to 7,085, and the SMI is down 0.15% to 11,115. In Asia, The Nikkei 225 is down 0.06% to 29,328, the Hang Seng is up 0.66% to 28,596, the CSI 300 is down by 1.24% to 4,992.60, and the Nifty 50 is up 1% to 14,930.
The rotation into growth is now back, with the Nasdaq being heavily bid, while small caps puke. Clearly the talk of tapering has simmered notably after the obvious weakness in the labour market. It's another win for the speculators, as they assume the Fed now has no choice but to continue to support their risk appetite.
The Vix is sitting at 18.1, showing resilience after yesterday's short squeeze into the close. We're still channeling up, and are sitting just below daily resistance at 18.80. We'll be looking for a breakout above 21, for confirmation of a larger move ahead, and are positioned for bearish PA into the close, and next week. The US10Y yield is puking, and is back to 1.51% after losing the 50DMA earlier on in the week. We have downside to 1.35% where the 100DMA is sitting. Needless to say, the knee jerk reaction to flock into bonds is warranted after the ugly payrolls report, and interestingly the dollar is puking after the report to 90.45, which could lead us to believe that the Fed's debasement scheme has spooked dollar bulls. Should be a doozy of an open, so stay tuned.
* I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
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