I can’t remember the last time I saw a negative number for the monthly Non-farm Payroll Report.
Yet that is exactly what we got for September. It was the worst employment report in many years.
As I predicted in this space, the report had “hurricane” written all over it.
Making matters worse is the fact that the data was collected right when the hurricanes hit, further muddling the data.
Some -33,000 jobs were lost last month.
The Headline Unemployment Rate came in at 4.2%, a new 16 year low, while the U-6 long-term structurally unemployed “discouraged” worker rate was 8.3%.
More than 40,000 private sector jobs were lost, and the July and August reports were revised down -51,000.
Food Services and drinking places down a staggering -105,000. Health care was up +23,000, and Transportation and Warehousing up +22,000.
A further 1.5 million workers had jobs but didn’t go to work due to the hurricanes.
The markets didn’t care a whit.
At its worst, the Dow Average dropped 44 points. Bonds on the other hand, which should have rallied on the weak report, took it on the nose and dove a full point.
Clearly, there is still a lot of pent-up bond selling to play out, which is why I am running a double short position in US Treasury bonds (TLT).
The truly amazing thing about last week was how sector rotation abruptly ended and EVERYTHING went up in unison.
Sectors that had been dead for years, like the autos, went ballistic.
Usually, this is classic market topping action.
Did I go out and bet the ranch on the short side?
Hell, no!
Because this time it’s different.
The Seller’s Strike that I wrote about yesterday is the primary explanation, which could continue for the rest of 2017.
I continue to maintain a profitable long position in (AAPL).
My only loser is a position on the iPath S&P 500 VIX Short-Term Futures ETN (VXX) January 20, 2018, $60 calls, which I bought as a hedge against the market NOT going up every day forever.
