This morning the Department of Labor released blowout employment numbers. April nonfarm-payroll numbers rose by 176K vs. a consensus of 166K, and more importantly, the whisper numbers were under 140K. The reaction in the markets has been violent. Interest rates have risen, and DJIA has broken the resistance at 15,000.
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It is important to note that February nonfarm payrolls have been revised to 332K from 268K; this is a huge revision upward.
Unemployment rate fell to 7.5% vs. 7.6% consensus. There was no surprise in April hourly earnings which came at 0.2% vs. 0.2% consensus. The average workweek came at 34.4 vs. 34.6 consensuses.
This is one of those rare instances where economists were almost universally wrong. They were expecting weaker numbers. More important for investors is that professional traders in general were positioned on the wrong side. As traders scramble to cover short positions and underperforming money managers who have been resisting this rally throw in the towel, there has been a violent reaction in the markets. Popular broad-based ETFs have moved up strongly; SPDR S&P 500SPY is up 1.27%, SPDR Dow Jones Industrial Average DIA is up 1.21%, PowerShares QQQQQQ is up 1.37% and iShares Russell 2000 IndexIWM is up 2.08%.
Some caution is warranted because in the face of this bombshell employment report, the other data is mixed. Also released this morning were March Factory Orders and the April ISM Services Index….Read more at MarketWatch
