ECONOMICS TRUMPS TODAY

The widely watched and anticipated jobs report was released this morning and showed a disappointing 115,000 in job gains.  Though the unemployment rate dropped to 8.1% (from 8.2% previously), that figure is dropping more from workers leaving the work force or abandoning their job search than an actual reduction in unemployment.  All in all there is very little to like about the numbers and Wall Street punished stocks with one of the worst days in the last 6 months.  The NASDAQ led the fall as it shed 2.25%, the S&P lost 1.61% and the Dow rounded out the major indices by finishing 1.28% lower. 

After approaching the top of the trading range formed over the last month, the market is now trading near the lower part of the range.  Mondays after the job report often reverse some or all of the initial reaction so we will have to see if that holds true here.  Until such time as the market breaks through on the upper or lower end of the range, much of the day to day movements are just noise.  Today was a little louder however and the continued hint of a slowing economy puts the bears firmly in control heading into next week.  We'll see if the generally very good earnings continues next week and if it can shift the balance once again.  Spain and the rest of the European issues continue to smolder so there is reason for caution.  Will "sell in May and go away" prove prescient again this year?  It has for 8 of the last 11 years so we shall see. 

Our portfolios have held up extremely well and should again today with high yield and municipal bonds generally up a little or down a little today.  As always, please call us to discuss your individual accounts or if you would like additional information about Bills Asset Management.