Following the biggest rally in terms of speed and distance since the 1930’s, Friday’s better than expected Payroll figure begs the question of what happens now. First thing is determining whether the # was a harbinger of a sea change in the economy, is it sustainable or was it just an outlier that will be reversed since other data doesn’t confirm. The 2nd thing is seeing how much of the rally was based on an improvement in the economy off the dramatic declines in late ’08, early ’09 and how much was due to the drug of easy money. The bounce in the US$ and prospect of higher interest rates clearly tempered the initial market pop on Friday and that is a sign that good economic data now is not an easy green light for stocks as their recent boost has had other impetuses. The Asian markets were mixed in response to the US jobs report and Europe is giving back some of Friday’s rally. After a bounce on Friday, Dubai’s market tumbled again by 6%.
Read this next.
Previous PostMichael Boskin on “The Obama Crash”