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Daily Market Update – November 5, 2015 (7:30 AM)
So far, this week hasn’t really had anything terribly newsworthy, at least as far as the markets are concerned. That didn’t stop the first 2 days of the week from showing nice gains, despite having had lackluster pre-opening futures sessions that offered no predictive guidance. This morning looks to be another of those quiet opens, but today it may make more sense for the market to keep a relative lid on things, just as it did yesterday. While the week has been a quiet one on the news front, that can all change tomorrow as the Employment Situation Report is released before the market’s open. It really is anyone’s guess how the market will respond to any kind of number, but most people are of the belief that the FOMC’s new guideline of 150,000 newly created jobs will be easily surpassed, although last month could prove to be something other than an aberration. The real question is what will now be the new “disappointment.” Will traders be disappointed if that employment number from last month proves not to have been an aberration or will they revert back to their old selves and look at such bad news as prolonging a sort of free money environment. For the longest time I’ve been waiting for traders to be of the more rational mindset that good economic news, especially at the beginning of a tangible up slope, has to be good for the market and for corporate profits. But for the longest time those traders have looked at anything reflecting an improving economy as being bad for them. Historically, that’s been true in the later phases of an expansion, but not really true in the early phases. Despite slow and steady climbs in employment over the past few years, there still hasn’t been that obvious upswing in the economy that’s usually fueled by people going back to work and believing that they will be in work for some time to come. Maybe tomorrow will finally get traders to believe that the economy is growing enough to begin their focus on such things as revenues and real profits, not the kind that are manufactured through stock buybacks or cost cuts. With a number of positions set to expire tomorrow, I may be a little defensive if some offer an opportunity to rollover. That would be the case if I thought they would be less likely to be assigned, especially with tomorrow’s overhang. As with last month, you can’t discount the possibility of a strong market reaction to the report’s release and then a strong counter- reaction to that reaction. I would just like to end the week with some money to move forward next week and maybe some extra income. That’s the case every week, but for now we may be held hostage by tomorrow. |
