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  • Stocks Surge For A 2nd Day On Surge In Unemployment Claims [Edit or Delete]1 comment
    Apr 12, 2012 10:38 AM

    If you need further proof that job loss is bullish for stocks look no further than the DJIA which up another 80 points (up 160 points in two days) on an unexpected surge in unemployment claims and an upward revision of last week's claims. Job loss is bullish because it increases the odds of further QE but at the same time it hasn't hurt consumer spending, so it's a win-win situation. Until only recently, job loss was much more bearish because the BRIC boom was still in its infancy and the fed was lot more hawkish. We're in a Goldilocks economy of booming profits & earnings, tame inflation, zero deflation, and strong consumer spending even with a perpetually weak labor market.

    This data confers with an earlier post where I had predicted the labor market would take a sudden turn for the worst, but stocks would keep rallying.

    Should unemployment rise 1% or more Obama's polls will begin to plunge.

    HUGE MISS: Initial Claims Surge To 380K

    Initial unemployment claims jumped above expectations, increasing by 13,000 to 380,000, new data out of the Department of Labor shows.

    Economists polled by Bloomberg were looking for a 355,000 reading. The prior week's reading was revised higher by 10,000 to 367,000.

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  • I think the fate of the Bush Tax cuts will be determined by the November elections. A split Congress means they die, as it will be 'the other party's fault'; A Republican President, while highly unlikely, would do more to save them.

    In either case, I think we should see a continued uptick in deals and transactions by firms & individuals looking to harvest gains before they will be subject to higher taxes.

    The irony of this will be the democrats taking credit for the uptick in business and the economy as they sail into the elections...

    All of which tells me that there will be one heck of a hangover in 2013..
    15 Apr, 12:54 PM Reply Like
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