BarroMetrics Views: Markets, Non-Farm and US Elections
USD and stock market weakness continued in November 3rd’s trading.
Today, 8:30 (EST) we have a possible driver of direction – Non-Farm Payrolls. The consensus range is 155,000 to 200,000 with consensus being around 175,000 to 178,000.
Regular readers know that I have been employing a theory which has served me to good stead: Non-Farm has been in recent times a tool to shape desired FED sentiment rather than a statistical model.
Today, the FED is clearly not keen on tanking the stock market. The problem is any number greatly above or below consensus leads to an unknown effect.
Until recently, we could count on a below consensus being as interpreted: “Poor number, bad for economy, no interest rate hike, good for stock market.“
But, then we started to see the ‘normal’ response: “Poor number, bad for economy, bad for stock market.“
Given that a figure beyond consensus is an unknown quantity, I expect the number to come in at the 175k to 178k range +/- 2K. That should provide a stable stock market reaction until the election results.
What if I am wrong and the figure is outside consensus range? For the USD, a lower than expected number will be bearish and a larger than expected, bullish. For US stocks, we’ll need to watch the early (first 15-minutes) price action to make an assessment.
And this brings me to the US Elections. RealClearPolitics published a ‘swing state heat map’showing the States in balance. I’ll update the list around 19:00 (HK time) on Monday.
I wrote about the swing states impact yesterday and why I’d take a small bet on Clinton winning – if the USD and US Stock Market continue to tumble into November 8. RealClearPolitics published a ‘swing state heat map’showing the States in balance. I’ll update the list around 19:00 (HK time) on Monday.
RealClearPolitics published a ‘swing state heat map’showing the States in the balance. I’ll update the list around 19:00 (HK time) on Monday.
Let’s see what happens.