I think it is a given that the employment report on Friday will be either lackluster or negative. My guess is that traders and investors baked this “bad” report into the big slide yesterday. We will see. Okay, so now we wait for corporate earnings. This is the next “tell” of where the market is headed in the near term. Do they have to be stellar to move the market up, or will decent work? My guess is neither matters, as the catalyst for pushing the market higher is hiring, and that doesn’t seem to be happening, which is confusing, if current business sentiment surveys are credible. Check these out.
SINGAPORE, June 17 (Reuters) – Asia’s top companies are at their most optimistic in five quarters as robust economic growth in the region outweighs concerns about debt problems in Europe and renewed market volatility, a new Reuters index shows.
NEW YORK, June 23 ( Business Wire) – Chief executives are more optimistic about the state of the global economy than they were last year, according to the latest NYSE Euronext Annual CEO Report. While few CEOs rate global economic conditions as “excellent or good,” the study finds fewer executives saying conditions are “poor” than last year, with more than four in 10 CEOs expecting the global economy to fully recover by the second half of 2011 or sooner. Additionally, despite the European financial crisis, sentiment concerning the economic recovery in a CEO’s own country improved from March to June of this year.
In a survey conducted by the Business Roundtable, CEOs indicated that they expect to boost their payrolls in the second half of 2010 as part of an overall spending increase. The number of CEOs planning to ramp up hiring is at the highest level since mid-2007, according to a survey that suggests big U.S. companies are growing more confident about the economic recovery.
So what does it mean when one researches, finds data, and then cannot rely on the obvious conclusion? Well, it is not good in general, but in this case, I suspect the contradiction here has to do with these volatile times. The echo chamber of the media amplifies bad economic news to the point where even those who hire must pause in their thinking. Thus, these folks need some consistent good news to “pull the trigger.” Perhaps corporate earnings will provide a spark. We will see.
I understand that huge fiscal and economic problems sit “out there.” I get it, which makes me wonder if the surveys actually are credible because these big issues are not new. All of the issues we face now have been on the table long before any of the surveys were taken. So why the optimism? Perhaps I am wrong, and it is all about the earnings, the cash flow, and the ability to see past the “moment.” Perhaps, stellar corporate earnings will provide a spark to move the market higher in the near term, and, if we are lucky, it might even get those who hire to do what they do – put people back to work.
Trade in the day; invest in your life …
