The Market Is Back! Brexit? What Brexit? Recession? What Recession? "Katy, Bar The Door" And Get Out Of The Way -- This Thing Is Moving -- July 8, 2016

Updates

Later, 3:19 p.m. Central Time: I posted the original post at 11:24 a.m. Central Time earlier today. Hours later, the market hits all-time highs: On Friday, the S&P 500 surged past its all-time closing high, which was set at 2,130.82 on May 21, 2015. And the Yahoo!Finance headline: Wall Street is getting more skeptical. Wow, we've been seeing that headline -- or similar headlines -- for the past year. Whatever. So, what are they skeptical about? This morning, "everyone" was cheering the jobs report -- saying it signified everything was rose. The New York Times called it "a vigorous rebound" and then listed all the good news. 

At least for now, I guess all we can do is enjoy it. And remain skeptical.

(By the way, I always consider it a good omen when Wall Street professionals -- who are skeptical -- drive the market to new highs on a Friday afternoon when anything can happen over the next 72 hours.)

The Dow finished up 250 points; the S&P up 32 points.

The Dow intraday high was 18,167, on April 20, 2016. The range of the Dow today was 17,971 - 18,166.77.  The S&P range today: 2,106.97 - 2,131.71. 

Original Post

 

The Dow up 203 points at midday.

Top story right now over at CNBC: "Big Oil is back! Chevron, BP, Exxon announce $45 billion in new drilling."

At the NYSE, there are 254 issues reporting new 52-week highs, including:

• Becton Dickinson
• Cliffs Natural Resources (been down so long, it looks like up to me(
• GE (a big whoop)

Only 9 issues hitting 52-week lows.

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Today's Job Report

I posted today's job report without much comment. The jobs report has become so "suspicious" over time that it, too, has lost any credibility.

I said I would withhold comment until analysts have more to say later today and over the weekend. The New York Times report was posted so quickly after the report was released, it's hard to believe it wasn't written ahead of time, and then a few data points added when the numbers were released.

A reader provides this update:

Regarding the post on jobs: If you look at both U2 and U6 unemployment numbers, the total number of people working in the U.S. tumbled again -- lost more people from the total U.S. workforce than were gained by today's U2 increase in jobs created number.

Further, the month to month variability of the U2 number is widely known, but rarely talked about, sadly. At a minimum a 3 month rolling average should be used to understand employment trends rather than relying on a single month "headline" number.

A reminder:

• U-6 unemployment rate: includes discouraged workers; many consider U-6 to be the "real unemployment rate." 
• BLS definitions and rates here. 

Today's "unemployment headline," I assume was U-3, and it was said to be 4.9. Yet, at the BLS link above, the U-3 unemployment rate for June 2016 is 4.9 seasonally adjusted, but 5.1 if not seasonally adjusted.

It is interesting to note that every unemployment data point (U-1 through U-6) was higher (bad) in June, 2016, compared to May, 2016, except for U-6 which decreased from 9.7% to 9.6%.

At the end of the day, the "vigorous rebound" reported by The New York Times seems to be a bit of hyperbole. The only data point that was "reassuring" was the "added jobs (and, of course, that certainly appears to be an "anomaly" or "catch-up" after two horrendous months). All other unemployment data points were trending in the wrong direction.