The non-farm payrolls report is the grand daddy of economic reports. And no report has been worse in the last 6 months. Of the prior 7 reports the market has sold off the Thursday prior on 5 occasions:
Sept 4th -2.9%
Oct 2nd -4%
Nov 6th -4.9%
Dec 4th -2.8%
Jan 8th +0.3%
Feb 5th +1.5%
Mar 5th -4.2%
______________
Avg Return -2.42%
As you can see, the market has traded very cautiously heading into the NFP report throughout this downturn. With the futures ramping up 100 (as I write) and M2M decisions expected tomorrow at 9AM and 10AM we could see a bout of “selling the news” compounded by pre-NFP fear. The figures today out of ADP were particularly bad so that could fuel fears of owning stocks heading into Friday’s report. The wildcard tomorrow is a G20 agreement. A major agreement could very well spark some optimism. The odds point to a decline tomorrow, however, we’ll have to play the G20 news by ear….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.