For a while during Thursday’s trade, the market got it’s @$$ kicked – early, then again late. Apparently the market was “surprised” by the surprisingly bad employment picture that was snapped last week.
Weekly unemployment data was supposed to be 410,000; however, it was shockingly worse at 474,000. Moreover, the prior week’s data was once again revised WORSE than originally reported.
Bloomberg said the following, Initial claims came in at 474,000 in the April 30 week for an astounding contrast with expectations of 410,000 (prior week revised slightly upward to 431,000). The four-week average jumped 22,250 to 431,250 which shows a nearly 40,000 increase from a month ago.
Special factors or not, headline levels are startling especially ahead of tomorrow's monthly employment report where expectations were already weakening. Stocks are on the decline in reaction to the data.
In addition to that, oil futures were CRUSHED today. The first thought of most people is: what will happen to gasoline prices at the pump? Of course, this is quite rational. However, the first thought of traders is: how many margin calls will this liquidation cause and how many equities will be sold to meet them?
Keep that last thought in mind if commodities get slaughtered.
Trade Date: 5/3/11
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