US Jobs Growth Key to Avoid Recession

US Jobs Growth Key to Avoid Recession

US Jobs Growth Key to Avoid Recession

$DIA, $SPY, $QQQ, $VXX

There are worrisome signs that the US will face Recession in Y 2017. The Key indicator to watch is the monthly NFPs (the jobs situation report).

Friday the US Department of Labor is expected to report that the US companies added 170,000 jobs in June, compared with a disappointing 25,000 in May.

Payroll processor ADP said Thursday that companies added 172,000 people last month, and factories let go of 21,000 workers and construction jobs fell by 5,000.

Analysts now estimates the global economy will decline in 2017.

Because of the Brexit vote to leave the EU, the UK economy will contract by 0.4% next year instead of expanding by about 1.9%, and the Euroarea will grow by 0.6% instead of 1.7%.

As for investment recommendations, he said the stocks are expensive compared with historical trends, and fixed income investments are especially stretched in Japan and Europe with trillions of dollars of assets carrying negative rates.

Asset allocation is now about choosing the least unattractive alternative, which leaves US fixed income as default winner. 10 year US Treasury yields are at historical lows, but look attractive in a global context.

Wednesday, the 10-year US Treasury yield fell to a record low of about 1.33% and closed up a bit at 1.39% Thursday a investors continued to seek safe assets following the US vote to exit the EU.

That fall in US Treasury rates to record lows is a worrisome sign for stocks.

Currently, risk assets are not pricing in Southside risk.

The US major stock market indexes finished at: DJIA -22.74 at 17895.88, NAS Comp +17.65 at 4876.81, S&P 500-1.83 at 2097.90

Volume: Trade was lighter Thursday, with about 851-M/shares exchanged on the NYSE

  • DJIA +2.7% YTD
  • S&P 500 +2.6% YTD
  • Russell 2000 +1.2% YTD
  • NAS Comp -2.6% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.23) Neutral (0.19) Bullish (0.25) Bullish (0.25)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.25) Bullish (0.25) Bullish (0.35) Neutral (0.14)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.22) Neutral (0.22) Bullish (0.31) Neutral (0.14)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.27) Neutral (-0.10) Bearish (-0.33) Bearish (-0.38)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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