Mike Zigmont Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business

since 2008, sending it daily shortly after the market close.


The opinions expressed below are my own

Weather-related. The big data of the day was the nonfarm payrolls (-33k vs 80k & 169k prior revised from 156k).

The market reacted a little bit but mostly dismissed this large surprise. This is the first net loss of jobs since 2010. The market didn’t react much however because weather-related distortions were already expected. They weren’t expected to be this large but that’s not that big of a deal. Why?

The market may have mis-estimated the magnitude of the labor impact but the impact is temporary. The market is viewing this as a bump. The bump was bigger than expected but we’re past the bump. The prior month’s revision was positive and other metrics reinforce the story of a healthy economy and tightening labor market.

Bond yields climbed today and the Fed Funds futures market now price in an 80% chance of a December hike. November is still 0%.

Here’s the bottom line on today’s nonfarm payrolls data and the market reaction. The data was a surprise for sure but the transient nature of the labor weakness was confirmed. The market interprets this as situation normal, Fed plan on track.

US equities experienced a touch of weakness today. Whether the selloff should continue or not is an argument not worth having. Dip-buyers gonna dip-buy. Today’s data won’t derail them.

Let’s change subjects quickly. Earnings season begins next week. I think stocks have to deliver good numbers for the rally to continue.

Thursday

is the first day of note but here’s the schedule for S&P 500 names.

Wed 10/11

BlackRock

Fastenal

Delta Airlines

Thurs 10/12

JP Morgan

Citigroup

Progressive

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