Market Alert - Pre-Market

Futures vs FV: SP +1.57; DJ +4.71; NASDAQ +4.25

Futures were flat pre-jobs, jump post-jobs report. Jobs report was a synopsis of the Obama jobs picture: disappointing with even the 'good' areas propped up by not real growth but phony fiat.

Non-farms: 156K vs 175K exp vs 204K Nov (from 178K)

Unemployment: 4.7% vs 4.7% exp vs 4.6% prior

Average hourly wages: +0.39%, +2.9% year/year. 7 year high. Great news . . BUT . . . that is the average and what we know is that the high end is getting huge salaries and skewing the numbers, those gains thanks to Fed and Administration policies benefitting the high end, AND minimum wage increases are artificially inflating the number.

Workweek: 34.3 vs 34.4 exp vs 34.3 prior (from 34.4). HOW are wages rising when the workweek is trending LOWER? Oh, it is not the market, but forced wage increases.

Participation: 62.7% versus 62.8%.

Out of Workforce: 95.1M, +18K in December, +841K in Q4. All-time record. We win again!

Gains:

Healthcare +43K thanks to forced buying in the ACA

Food, Beverage (waiters): +30K

Manufacturing: +17K. The jump in the price of oil has surged activity in machine shops and other oilfield service areas. And the administration was trying to slow down the only job-creating sector in the country. Oh, the GOOD job creating sector?

Losses:

Mining, Construction, Information tech

Part-time jobs: +41K

2016: 180K jobs/month, the lowest since 2011.

Basically this report was a microcosm of the Administration's jobs situation: limping over the finish line with a majority of jobs in the part-time, hourly areas and low wage. Any gains are by fiat that are not the result of real growth. Thus most in the US do not feel gains but indeed losses as they work 2 or 3 jobs just to make ends meet. That is not prosperity. May the future be better.

Sales: GPS sales +3% vs -5% a year ago

RT (restaurant): Missed earnings, getting slaughtered.

China: Massive yuan volatility causing trader whiplash.

Mexico: Intervenes in the peso again as panic takes hold over the end of a bad NAFTA deal that was very good for Mexico but not US producers.


OTHER MARKETS
Bonds: 2.407% vs 2.357%

EUR/USD: 1.0547 vs 1.05837

USD/JPY: 116.60 vs 115.93

Oil: 54.15, +0.39

Gold: 1176.00, -5.30


Futures are holding modest gains posted after the jobs report. That leaves the stock indices facing the same test: the prior highs. They put in new highs in December, faded to test at year end, aided by the rebalance, now have rebounded to test those levels. That is the next big step.

There is plenty of leadership in good position to push the indices past those highs. We will see if they can do it, though on a Friday and with bullish sentiment at 60+, you kind of need to see if it can hold next week. Still, there are some great patterns, and if they can show the moves, we will be interested in picking up even some partials.

Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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Alert Key
http://www.investmenthouse.com/alertkey.htm


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