Last Friday saw a very positive employment report, with job creation of 211,000 and the unemployment rate dropping to 4.4%. As usual, the Labor Force Participation rate moved higher, and the United States now has 94.4 million able-bodied adults not even looking for a job. Remember, the unemployment rate only counts people looking for a job. So, the only thing this very low unemployment rate is going to do is allow the FED to raise interest rates faster.
As you know I have been a professional trader for 25 years. As a professional trader I have to know EVERYTHING. I have to know the p/e ratio for hundreds of stocks, the volatility of hundreds of stocks, sentiment indicators, global macroeconomics, global politics, and much more. I estimate that I have spent at least 12 hours a day, 5 days a week for 25 years reading news articles, company press releases, and analyst reports.
Did we seriously just have a high flying tech stock IPO at $17 and immediately rally 50% (Snapchat… http://www.cnbc.com/2017/03/02/snapchat-snap-open-trading-price-stock-ipo-first-day.html?) Do we really have a market where investors are dying to buy a new tech company with no earnings? Are we once again valuing companies at over $5 billion on the hopes that they will one day make money? Does this sound familiar to anyone?
WHAT HAPPENED LAST NIGHT!!!!????
I feel like I’ve seen this movie before. The Federal Reserve is on its kick to raise rates again. The market expects a rate hike of .25% in December, and down goes the stock market. It’s the same old story. The Fed thinks we have inflation, but the rest of the world knows we have deflation.