Interpreting NFP Today...

Interpreting NFP Today...

Well the NFP came out today and printed a massive 295 jobs for the month of December yet the markets response was muted (as I suspected it would be). There are a number of reasons why the markets response might not have been as positive as most expected. The reason is simply the Dollar. The Fed official jawboning this week was around the Dollar and its high level which was not a desireable thing. Since then the Dollar tanked and the EURO rose. We need to remember that the Dollars weight is 57% EURO so they do effect each other significantly. China is of course in the news but this is not new. Stocks gyrate all over and in the long term they are still the most effective way to grow your capital.
      The way to invest is in key growth stocks. Ones that have good track records or growth and stability. The more they get beaten down (like say Apple) the better the long term buy is.
Technology is always innovating and so most of what we worry about with commodities  has nothing more to do with than simple price manipulation. For example is oil a deal where it is now? I think so. It has been beaten down for reasons unknown other than what you hear the talking heads crow on about.
     The other big factor that traders are beginning to look at is the fact that the wages are relatively stagnant and have been for a long time. In fact wages this jobs release shrank a bit. I have been blogging about this very fact seemingly forever which is what does it matter whether you have a job or not if you need two or three of them to get by? You trade off your wage for jobs.
    The markets are increasingly looking at this and why not. Things were like this pre 2000 collapse and the 2008 collapse. Lots of jobs, low unemployment but very high debt ratios. So what has changed in the past twenty years? The answer is nothing. In fact it has got worse. Much worse. Each new boom has resulted in new debt being printed up to offset a crashing economy and poor fundamentals. That is why you have the complete destruction of traditional fractional banking.
    So although the Dollar is a good risk off bet the way it may go this year is not where everyone thinks. I still see the EURO at 1.2000 or 1.2400 before the year is out. This is why we have the EURO signal.