ETF Tracker StatSheet
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GOVERNMENT JOBS SOAR, PRIVATE SECTOR GROWTH LAGS
- Moving the market
The much-anticipated jobs report exceeded expectations, driving major indexes higher. However, the question remains: how much will these figures be revised in the future? Historically, six out of the last seven releases have been significantly downgraded.
Nonfarm payrolls surged by 254,000 jobs last month, far surpassing the expected 150,000 and marking the largest increase since March. The unemployment rate also improved, dropping to 4.1% from 4.2%.
Traders reacted positively to this news, interpreting it as a sign of a robust labor market and a resilient economy. This optimism persists despite ongoing issues such as record layoffs, bankruptcies, soaring food prices, and struggling consumers.
A closer examination of the jobs report reveals fewer encouraging details. Government employment saw a record increase, while private sector job growth was limited to 133,000, reflecting the current challenges in the labor market.
The US Citi Surprise Index turned positive this week, with rate-cut expectations plummeting and bond yields surging. The 10-year yield, which had recently dipped to 3.60%, rebounded sharply towards the critical 4% threshold, last seen in August. This movement strengthened the dollar, which rose for five consecutive days, but it also led to declines in gold and Bitcoin prices.
Amid persistent Middle East tensions, crude oil prices spiked, achieving their best week since October 2022.
Despite the positive jobs report, concerns about the increasing risk of a US sovereign default remain. Will this risk diminish as it did after peaking in May, or is this time different?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The headline jobs report captured the full attention of traders, providing a pivotal moment that helped to turn around a challenging week. This report laid the groundwork for the market to end the week on a positive note, achieving a modest gain.
Additionally, our TTIs both experienced a rebound and showed moderate advancement as well.
This is how we closed 10/04/2024:
Domestic TTI: +8.23% above its M/A (prior close +7.80%)—Buy signal effective 11/21/2023.
International TTI: +7.33% above its M/A (prior close +7.06%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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