WEEKLY MARKET DIGEST: IMPORTANT INDICATOR OF THE FUTURE SHIFTS ON JOBS REPORT $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

  WEEKLY MARKET DIGEST: IMPORTANT INDICATOR OF THE FUTURE SHIFTS ON JOBS REPORT $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights from the prior week gives them an edge over the coming weeks. Here is the day by day rundown from the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers of The Arora Report

Please scroll down for the section What To Do Now.

IMPORTANT INDICATOR OF THE FUTURE SHIFTS ON JOBS REPORT

This is what you need to know today.

Over my 35 years in the markets, I have learned that the most important indicator of the future is how various markets react to important events.  Especially important is to note inflection points when the behavior of the markets changes.

Today is an important day as stocks, gold, bonds, interest rates, euro, yen and oil behavior has changed in response to strong jobs report.   So far we have the initial reaction and if there is no reversal, then this change will be very meaningful.

Jobs report is often called ‘the mother of all numbers’ because it moves the markets.  The ‘smart money’ usually focuses on Non-farm Private Payrolls whereas most investors focus on the number which includes government payrolls. Both numbers were strong today.

The table compares the normal reaction and the first reaction in February 2017 of stocks, gold, bonds, interest rates, euro, yen and oil.

Please click here for the table.

Non-farm Private Payrolls came at 237K vs. 175K consensus.  The headline number was 227K vs. 170K consensus.  The justification for a different reaction may be in two factors.  First, the unemployment rate increasing slightly to 4.8% vs. 4.7% consensus.  Second, average hourly earnings month over month came at 0.1% vs. 0.3% consensus.

Usually markets simply ignore the foregoing two numbers in the early reaction.

If the first reaction holds, a big change for the markets is in the wind.  Investors better pay attention.

Markets

Our very, very short-term early stock market indicator is positive.

Gold futures are at $1218, silver futures are at $17.43, and oil futures are $53.51.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are up 90 points.

TRUMP SPAT WITH AUSTRALIA AND MEXICO SENDS STOCKS AND DOLLAR LOWER BUT HELPS GOLD, WORST START FOR DOLLAR IN A DECADE

 This is what you need to know today.

Bad Hombres Down There

There is a report that Trump told Mexico’s president that the U. S. would send troops to stop “Bad hombres down there” if Mexico did not stop them.

Interestingly, there is not a denial from Mexico but a comment that the remarks were not threatening.

Trump And Australia

Trump blasted a deal with Australia on Twitter.  There are reports that he berated Australian Prime Minister Malcolm Turnbull on the phone.

The deal was struck by Obama under which the U. S. will take 1200 refugees temporarily stationed in Australia.

Worst Start For Dollar In A Decade

The general belief is that the dollar is strong.  However, a close look at the numbers show the worst start for the dollar so far in the new year in a decade.

Gold

Gold is benefiting both from weaker dollar and Trump’s comments

The Fed

The Fed was extraordinarily dovish in its comments.  This is putting further pressure on the dollar.

Markets

Our very, very short-term early stock market indicator is negative.

Interest rates are ticking down and bonds are ticking up.

Oil disregards bearish EIA data and a short squeeze is leading oil higher.

Gold futures are at $1225, silver futures are at $17.69, and oil futures are $54.03.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are down 57  points.

STOCKS AND DOLLAR BEING BOUGHT AND GOLD SOLD ON GOOD ADP DATA AND GOOD PMI DATA FROM CHINA AS WELL AS EUROPE

This is what you need to know today.

ADP Data

ADP is the largest private payroll processor in the United States.  ADP private payrolls climbed by 246K vs. 168K consensus.

China PMI

China Manufacturing  Purchasing Managers Index  (PMI) came at 51.3 vs. 51. consensus.

China Non-Manufacturing PMI came at 54.6 vs. 54. consensus.

Euro PMI

Euro area Manufacturing  PMI came at 55.2 vs. 54.8 consensus.

Fed Day

Fed will announced its rate decision this afternoon.  No change is expected. Market will be looking for clues on future policy as it relates to Trump initiatives.

Markets

Our very, very short-term early stock market indicator is positive.

Dollar is gaining strength.

Gold is being sold but still above $1200.

Oil, bonds and interest rates are range bound.

Gold futures are at $1206, silver futures are at $17.46, and oil futures are $53.27.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are up 78  points.

TRUMP ADVISER SENDS GOLD AND EURO HIGHER, CENTRAL BANK MEETINGS, SEASONALLY WEAK FEBRUARY

This is what you need to know today.

Trump Adviser Send Gold And Euro Higher

Trump adviser Peter Navarro  has stated that Germany is unduly gaining from a “grossly undervalued currency.”

The comment is sending euro higher.

The comment along with continuing immigration controversy is sending gold higher.

Gold is also benefiting from economic data showing higher growth and inflation in Eurozone compared to the consensus.

Central Banks

Bank of Japan has left its interest rate and bond buying policy unchanged.  Fed is meeting and will announce its decision tomorrow.  No change is expected.  Market will be scrutinizing any comments on Trump policy.

Bank of England will announce its decision on Thursday.

Brexit

U. K. Parliament is now considering a Brexit resolution.

Seasonally Weak February

In post election years, since 1977, loss in February has averaged 1.8%.

There is a lot of call buying on VIX futures indicating that aggressive players are betting on a market fall.

Markets

Our very, very short-term early stock market indicator is negative.

Interest rates, bonds and oil are range bound.

Natural gas is being crushed.

Gold futures are at $1207, silver futures are at $17.45, and oil futures are $53.27.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are down 40  points.

IMMIGRATION BAN DROWNS IMPORTANT ECONOMIC DATA

This is what you need to know today.

Trump’s immigration ban from seven Muslim majority countries is drowning  all of the economic data that has been released today.  To save you time, we will not discuss the important economic data in this Morning Capsule because it is not driving the market at this time.

Stocks are lower because of concerns about the immigration ban and gold is higher.

Bonds and currencies are mixed.

Markets

Our very, very short-term early stock market indicator is negative.

Gold futures are at $11.95, silver futures are at $17.23, and oil futures are $52.90.

S&P 500 resistance levels are 2300, 2334 and 2363; support levels are 2250, 2222, and 2200.

DJIA futures are down 61  points.

 

WHAT TO DO NOW

Looking ahead and not only in the rear view mirror, consider continuing to hold existing core portfolio positions. Based on individual risk preference, consider 27 – 38% of assets in cash or treasury bills, and short to medium-term hedges of  25% and very short term hedges of 5%.

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