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Thursday, June 9, 2016

Daily update 6/9 More suspicious labor data.

Dip buyers held the market up after the small down opening. 

SPX closed exactly one point below the Nov. high.  They had it above that high until the last few minutes of the day.  Not exactly enough to say it was a failed break out yet.  Breadth was -60% which was considerably more negative then one would expect for the little bit the market was down.  A lot of stocks were down just a little.  No big run for the exits yet.  New highs remained strong at 214.  Today's trouble seemed to come from the Bank of Korea lowering rates.  That brought global economic weakness back to investor's minds and sent the dollar higher and oil lower.  Are global economic worries going to reenter the picture? 

The futures spent quite a bit of time plumbing around the lows of the day after the open.  However, there was really no significant selling.  I guess nobody wanted to sell into the weakness.  That allowed the bulls to hold the market up and eventually generate a bounce.  The bounce never quite made it to break even on the day though. 

I don't know if this is the start of something significant or not.  The bears need to see SPX close back below 2100.  The bulls really need to see SPX close above yesterday's high (2120) to get confirmation of the break of the Nov. high.  In between is just noise.

Here is another look at the job openings with a different method then the government uses.  Update on Jobs Openings

I have no idea if this data is statistically good or not.  There is a little bit of info in the article about it.  The reason I am showing it is because of the comments I saw about LinkedIn today.

LinkedIn Job Postings Plunge, “by far the Worst Month since January 2009”

So now comes LinkedIn, or rather MKM Partners, an equity and economics research firm, with a report in Barron’s about LinkedIn – “While we like LinkedIn’s long-term prospects and believe that sentiment on the company’s opportunity is overly negative, we remain at Neutral on the stock,” it says. Rather than disputing the deterioration in the labor market or throwing some uplifting tidbits into the mix, the report highlights yet another 2009-type super-ugly data point.
After 73 consecutive months of year-over-year growth, online jobs postings have been in decline since February. May was by far the worst month since January 2009, down 285k from April and down 552k from a year ago.
Online job postings are not a direct revenue driver for LinkedIn. We do however believe it is a reflection of overall hiring activity and should be considered a check on demand vibrancy.
LinkedIn caters to professionals, people with well-paid jobs, or people looking for well-paid jobs. They’re software developers, program managers, petroleum engineers, executives of all kinds, marketing professionals, sales gurus…. They span the entire gamut. And companies use LinkedIn to recruit those folks.

Openings for some of this country's best jobs have been declining for months.  Wow, I did not have any idea.  In Daily update 4/15 Industrial production and ECRI USCIg I upgraded my recession watch to a recession warning.  The data since then continues to look worrisome.  The labor market is considered a lagging indicator if it is truly rolling over a recession may already be unavoidable.  We could find out we are already in a recession if data gets revised downward in the future.  I am confident in saying the economy is still headed in the wrong direction.  There is absolutely no sign things are getting better. 

There is a huge chorus from Wall Street that there is near zero chance of recession.  I just don't believe that is true.  I will continue to look at the data and see what develops.


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