NOT TOO HOT, NOT TOO COLD BUT JUST RIGHT

Today's delayed release (due to the government shutdown) of the monthly payroll report came in weak but not too weak.  The market appears to like the number as the S&P is tacking on an additional 12 points at the time of this post.  We are in the very strange time where the markets are actually wanting benign numbers.  Economic reports that come in too strong could lead the Federal Reserve to accelerate their tapering of quantitative easing and easy money.  Economic reports that come in too weak could lead to a recession and the failure of the Fed's monetary strategies.  So, the report today was just right.  Weak but not too weak.

Earnings season is in full swing and have largely been in lockstep with expectations to this point.  Corporate profits continue to hold steady while, generally, revenue numbers disappoint.  If there is a greater slowdown, corporate profits could really suffer as most companies have already done all the cost cutting they can. 

The government shutdown will certainly have an effect on the economy and the employment situation.  We will have to see if it is just a one month blip or something more persistent.  If the latter, then the market will have to determine how weak the numbers can be before getting too nervous.  Time will tell.  For now, the markets remain in a state of bliss (ignorant or not is open to question) and higher prices look to be coming despite many negative technical warnings and an anemic economy.

BAM MARKET WRAP

WHAT ARE THEY THINKING?

The Most Dangerous Place to Live (hint: It is home to the Big Orange and that Black and Gold in Nashville)

Most Dangerous States

BAM MARKET WRAP

THE BAR IS OPEN AND THE 4 AM CALL

WHEN WELFARE PAYS BETTER THAN WORK

When Welfare Pays Better Than Work

YOU CAN BUILD THE IRON MAN SUIT

One of the greatest convocation speeches.

WEAK BOUNCE

To this point, the markets have only managed a weak bounce from oversold prices.  This does not bode well for the short term and the markets will have to stage a rally soon or the bears will take full control and we could easily see another quick 2-5% drop in equity prices.  The economic news out today was generally positive led by a better than expected GDP report.  Tomorrow we will get another round of economic indicators.  It is hard to know if one should cheer for positive data (and risk the Fed tightening up on their liquidity) or cheer for bad data so that the Fed will continue to pump money into the system.  In any event, the markets are weak here and poised for another potential break-down.  Extra caution is warranted until things settle down a bit.