The Gilmo Report

April 9, 2017

April 9, 2017

Friday’s Bureau of Labor Statistics jobs number came in lighter than expected, with a mere 98,000 non-farm payrolls reported vs. expectations of 180,000. Meanwhile the now-mythical unemployment rate came in at 4.5% vs. expectations of 4.7%. By now, most market watchers understand the sleight-of-hand statistical machinations that produce such a disparity between weak jobs growth and a declining unemployment rate.

On the heels of Wednesday’s strong ADP jobs number, the weak BLS jobs report was perhaps a bit of a negative surprise, and futures did initially sell off in response. Throw in the overnight bombing of a Syrian airbase by U.S. cruise missiles and a terrorist attack in Stockholm, Sweden, and it seemed like the perfect storm for sending the market sharply to the downside.

But what seems obvious in the market often turns out to be quite the opposite. As I tweeted on Wednesday, a day when the market was reversing sharply to the downside in an extremely bearish move for which I was positioned on the short side, one always feels a need to be constantly looking back over one’s shoulder, expecting the unexpected.

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