The stock market is going to get roughed at the opening bell today as the number of jobs created for May was a dismal 69,000 and April’s 115,000 were revised down by 40,000. Economists predicted May’s creation to be 150,000. The results were not even close.
The second punch could come at 10 am Eastern when the ISM Manufacturing Survey is released. As a rule of thumb, a reading of 50 or more means the economy is growing, and under 50 means the economy is sinking.
The Street expects a result of 54. If the number misses to the same degree as the Employment Situation, it could be lights out for stocks.
Yesterday, the indexes touched May lows intraday, and then rumors of an IMF package to help capitalize Spain’s rapidly deterioration bank deposits rallied the markets. It’s been reported that account holders have withdrawn more than $80 billion form their saving accounts in the debt ridden country.
In a little more than two weeks, Greece will once again hold elections to determine the fate of the nation’s place in the Euro. While polls show the Greeks want to stay in the Union, 70% of the voters in the most recent election voted for anti-bailout, anti-austerity candidates. Top Equity believes the votes over the polls. Expect the polls to be wrong, and citizens to opt for more cheese over cuts.
If that’s not enough to roll your sucks up and down in disgust, the news out of China shows their economy is grinding to a halt as manufacturing continues to slow. With Europe on the verge of a 2008 like banking crisis, China worried about internal woes, it’s no wonder the US is backtracking. Only, unlike 2008, interest rates are already effectively negative when accounting for inflation and there is no money left. The country is already $16 trillion in debt.
In TEN’s opinion, most if not all of 2012’s hot start could be wiped out before Independence Day, for sure by Labor Day if things don’t improve of the Federal Reserve unleashes the mother of all easing.
Don’t expect any help from Washington D.C. with the election coming. The looming battles over the debt ceiling and taxmageddon make for good politics in front of an election. Unfortunately for investors, none of it adds up to gains.
Perhaps, it’s time to put everybody up for re-election in the unemployment line?
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