Why I Hate the Jobs Report
I posted this back in March. After listening to all the stupid TV hype about this Friday's Jobs Report, I felt the need to repost this:
Of all the economic reports, the monthly Jobs Report seems to get the most attention. This report comes out at 8:30AM EST on the first Friday of each month. Here are the main reasons why I ignore this report:
1) CNBC calls this report the "Grand Daddy of them all." This is an obvious and pathetic attempt to boost their TV ratings and put fear into the novice investor.
2) I prefer to "turn off the noise" and pay attention to the price action of leading stocks and the volume of major indexes.
3) The following seems to happen fairly often: The jobs report comes out and the Dow drops 100 points by 10AM EST. The news headline reads: "Market tanks due to poor Jobs Report." By 3PM EST, the market recovers and turns positive. The news headline reads: "Market rallies due to strong Jobs Report." WELL WHICH ONE IS IT??? THE REPORT DIDN'T CHANGE INTRA-DAY!!!
4) Leading indicators (such as the stock market) are more important to me than lagging indicators (such as the majority of economic reports).
5) How can a number have credibility when it is ALWAYS revised the next month? Could you imagine if a company reported earnings one month and then changed it the following month? When a report is revised so dramatically a month later, it makes you wonder why people think the number is "manufactured by the government."
6) Last winter, there were rumors that poor weather could affect the report. If you're motivated, you will walk uphill both ways in 3 feet of snow to interview for a job. If you're not motivated, you'll wake up at the crack of noon on a sunny day, eat leftover pizza and play video games. Weather is just another pathetic excuse. By the way, the same goes for Retail companies who use weather as a reason for weak sales. I know women who would walk through a category 9 hurricane if they really wanted a new pair of shoes at the mall.
7) If the unemployment number improves, the market could rally because it's a sign that the economy is getting better. It could also decline because of fears that the Fed will raise rates now that the economy is improving. Again, trying to analyze all these scenarios can drive you crazy!
Bottom line is this: The market is going to interpret the report however it wants to. If the market is healthy, it tends to ignore bad news. If we're in a weaker environment, all news is bad. My best advice is to PAY MORE ATTENTION TO YOUR STOCKS and LESS ATTENTION TO ECONOMIC STATISTICS. As they say: "There are lies, damn lies, and statistics."
Follow me on Twitter @jfahmy
Tickers: Employment report, Jobs report
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Based in Boston, MA, Joseph Fahmy is the Chief Investment Strategist of Zenith Asset Management, LLC. Joe has over 14 years of trading experience during which he developed his investment strategy... ... More » -
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