What Happened to the Bulls?
Out of the gate, the stock market appeared ready for a truly spectacular rally. Enthusiasm over today’s non-farm payrolls report had the bulls happily buying on optimism that the worst truly is over for the economy, and the recession is about to end. Unfortunately, after showing up today, the bulls decided to go home early. Now the major U.S. stock market indexes — the Dow, S&P 500 and Nasdaq — are wavering, heading into negative territory as the bears try to wrest control out of the hands of the optimistic. And remaining bulls seem too worn out to put up much of a fight.
U.S. non-farm payrolls data
Even though the stock market may not be showing it right now (and who knows, the day is young yet, a rally is still possible), there is some general optimism about the U.S. economy, thanks to latest payrolls data. Indeed, if you look at the chart below, you can see that the employment picture is improving:
Overall, this picture of improvement should encourage a trend toward a higher stock market, sending shares higher on the prospect of improved profits. Declining unemployment usually means a rise in consumer confidence and consumer spending. Even though unemployment has reached 9.4%, there is hope that if another dramatic slowdown in job loss occurs, the economy will be able to hold the rate at under 10%.
***Update: Stock Market Up Again***
The stock market is back in positive territory as the bulls regain the upper hand. The economic news is just too good to pass up, and those who are feeling optimistic are trying to make their feelings known through buying up shares. Clearly, it’s going to be a bit of a bumpy ride until more are convinced that the economy is really making its way out of the woods.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
