Of course, much of the conviction being exhibited by speculators is shaped by the interpretation of what makes for a "good" or a "bad" employment figures harvest. For example, there seems to be little attention being paid to the fact that a good chunk of the "badness" of this morning’s data is attributable to the 46,000 Verizon workers who opted to strike last month, and who were counted into the final number, but are now back on the job.
As such, if one asks economists for example, the periodic jobs reports from the Labor Department have taken on an "aura" of importance that perhaps is not fully deserved. Worse, the data gathering process, the analysts’ interpretations and the actual hard essence of same are full of questionable aspects and may cast a dubious light on all the importance that markets appear to confer upon them. Marketwatch’s Greg Robb has dissected the reports and polled economists on the nuance of what the data (really) means at the end of the day. Finding: not a whole lot, actually.
To wit, the jobs reports are routinely revised, in arrears. That which one thought was a number etched in cold, hard stone turns out to be a mere suggestion of a figure, scribbled in the sand at the water’s edge. Poof! It is gone next month and revised sharply higher (or lower). Okay, then, make a bet or trade based on that level of accuracy. Furthermore, one and the same jobs report appears to contain conflicting components (unemployment and non-farm payrolls) that frequently go into divergent directions. Worst of all, there are allegations that the use of "birth-death" models to divine the headline jobs number is tantamount to "statistical quackery."
Market participants this morning also likely factored in a couple of other news items on the financial front as they bid bullion higher. Among them, a call by the ECB’s "shadow council" for the central bank to reverse its previous rate hike(s) and ensure that the Old World doesn’t head back into the contraction out of which it had appeared to be slowly and painfully extricating itself earlier in the year. Separately, some attention was also probably being paid to the story that the Fed has asked BofA to provide it with "contingency plans" on what it might do if conditions worsen for its business.
Since neither the Fed nor BofA spokesmen commented on the matter, we are left to guess a) what the Fed knows and/or b) what "worsening" conditions might imply. Suffice it to say, BofA shares fell 2.7% in pre-opening trade this morning. Not helping matters for financial-flavored equities (Citigroup shares fell 1%) were news that the FHA plans to sure more than a dozen large US banks on account of what they represented (or, rather, mis-represented) in connection with mortgage-backed securities before that most recent market bubble imploded.