April 1, 2009: Dire Employment Data = Rally?
April 1st, 2009
ADP Employment for March was reported this morning and showed private sector job losses of 742,000; the largest monthly job loss since the data began being tracked in 2001. Also, February’s job loss was revised down to 706,000 (previous report showed a loss of 697,000 jobs). That report came out at 8:15 and stock futures, not surprisingly sold off hard. Shortly after this report, an economist from Macroeconomic Advisers said, “similar US private sector job losses like March will be seen for several more months.”
After a very weak open, Pending Home Sales for February came out at 10:00 and showed a 2.1% month-over-month increase. Investors immediately reversed their collective approach and bought everything in sight that resembled a stock. From the early morning lows to post-Pending Home Sales high, the major averages rallied 3.1%-3.9%……over the next two hours. It seems that somewhere in this data a large (and ever-increasing) amount of bank-owned properties have now found some price level that is low enough to attract buyers. Is this really the type of data that suggests stabilization or improvement?
We doubt it.
The media has been talking about GM being government-run and the hopeful speculation that the Housing Market is slowing its decline. However, seeing such horrific jobs data just does not square with a (supposed) improving housing market.
Be careful about chasing these hopeful market rallies when the data supporting the bullish case will likely get much MUCH worse in the very near future.
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