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  • Your Non-Farm Payrolls Primer 0 comments
    Apr 5, 2013 4:01 AM | about stocks: SPY, DIA

    With non-farm payrolls and unemployment data right around the corner, here's a rundown of what to expect.

    The Fed no doubt have had a very optimistic view of economic growth and the labor market. With even Fed doves stating they would like to taper off QE3 this summer.

    While we have been seeing moderate growth in the past few months, it pales in comparison to the amount of stimulus spent by the Fed. The economy is far from having recovered to the point that QE3 could end and I'm skeptical that we could see any reductions any time soon.

    With the long slew of bad economic numbers this week and economic data in general not keeping pace, we should start to expect that if the bad economic data trend continues, the Fed will have no choice but to change their tone.

    What does this mean for the data release Friday? With current non-farm payrolls forecasted at 198k and ADP coming out below expectations, even a great number at this point is unlikely to have much impact, however another bad release will hammer in market pessimism and will really cause the market to move.

    Regardless expect the stock indexes to be choppy but don't be surprised if price closes somewhere close to the open. If the market trends in any direction, expect it to take place a good amount of time after release when the market has either digested or ignored the data.

    Remember to keep an eye on other asset classes to see how they react (or don't react) to the data.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SPY, DIA
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