Keeping in mind yours truly is out of the predictions racket and these are merely “observations”, I give you my latest thoughts:
First and foremost, when it comes to today’s employment report, I can sum up my opinion by saying this.
It makes no economic sense to have such strong back-to-back employment reports given how overall weak other economic factors have clearly been of late. Either many of these other economic factors were grossly off base, or the employment numbers have been nicely goosed. For the record, I go with the latter (but we won’t know until way after the election and by then, the goose shall surely been cooked).
U.S. Stock Market – Several weeks ago, I expressed a belief the stock market would rally through Labor Day. Central Banks, including our own IMHO, have been actively supporting financial markets. While in the long run this will IMHO make for a horribly bad economic period that could surpass the Great Depression era, it has for now, nicely artificially insulated our market from any bad, sustainable decline. How long that lasts is truly a guess; and since I lost millions more than once being a professional “Guesser”, I’ll leave that up to others to end up winning the “blind squirrel” award.
U.S. Bonds – If the last two employment numbers are actually accurate, bonds are a screaming sell. But since I believe the Labor Bureau is just another government department that has been used for an agenda by what historians will look back and end up designating the worst U.S. President ever (but may be matched or even surpassed by the next one), I continue to approach bonds as the lesser of two evils versus general equities.
U.S Dollar – With much of the western printing money like it’s going out of style and will load up helicopters to disperse this funny money sooner or later, the U.S. Dollar wins be default as the most likely major currency to rally for the next little while. Ironically, that makes the price to pay for the U.S. down the road even more costly (but for now, do what the “Don’t Worry, Be Happy” crowd on Wall Street is doing).
Gold – I consider today’s pullback on the heels of a highly suspect employment number a gift for those not yet having significant exposure to gold ownership. $1,400+ looks more likely than just a few months ago. If and when we get above that number, I believe we’re off to the races (keeping in mind I think Elvis and Jimmy Hoffa are still alive-lol).
Copper down yet again, only adds to my suspicions the employment numbers are accurate and most other recent economic numbers off base.
Disclosure – My immediate family and I own just two stocks and significant exposure to gold.