We were starting to turn the crank on our projections for tomorrow's Non-Farm Payrolls report when we spotted this update.
The 'imaginary jobs' component will be in play, but in particular it is the 'seasonal adjustment' factor that gives the bureaucrats at the BLS an enormous ability to massage the headline numbers from the actuals.
We suspect the market will strike a level today and then gyrate around it to burn out the daytraders while the pros wait to see how the Jobs number gets spun tomorrow.
We see 926 as support on the SP futures with 918 below that. It would be a breakdown below 910 that would cause us to change our current hedged positions weighting. On the upside there is strong resistance at 954 and 978 with a few stumbling blocks around 960-968.
This is a thin market with a predilection to being pushed around by the Wall Street wiseguys. To use a 'poker analogy' they like to see the funds and specs take positional wagers with leverage, and then use their superior bankrolls and advantaged table insight to 'raise them' out of their bets and pocket the difference. This is one of the issues that must be addressed if the house banks are going to be sitting with the other players at the table, with the backing of the Treasury and slack regulation.
JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS
FLASH UPDATE
November 6, 2008
October Employment Conditions Should Show Marked Deterioration
Jobs and Unemployment Due for Big Hits. With both the October manufacturing and nonmanufacturing purchasing managers surveys showing their employment measures falling deep into recession territory, with September help-wanted advertising holding at its historic low and online advertising still tumbling year-to-year, and with a new claims for unemployment insurance continuing to rise sharply year-to-year, October payrolls should have dropped by over 200,000, along with a continued sharp rise in the unemployment rate.
The October report is due for release tomorrow morning (November 7th). Consensus expectations are running at roughly a 200,000 payroll loss and a 0.2% increase in the unemployment rate to 6.3%, per briefing.com. They are not unreasonable, but still appear to be somewhat shy of reality. Election pressures are gone, but financial market pressures for rigged data remain. With the markets still far from stable conditions, a slightly better than expected payroll number might be a fair bet.
