Sour Grapes or Real Bottom?
Nonfarm payrolls for April slipped by 20,000, which is less than the revised decline of 81,000 experienced in March and also less than the 75,000 decline economists expected. Importantly, these figures do not reflect the kind of weakness often associated with a recession. I would point out that the 45,000 construction jobs predicted by the birth/death model probably don’t actually exist – but you might consider that sour grapes.
And the dollar is rising because the Fed is going to support the dollar. This is the same Fed that announced Friday its intentions to increase its Term Auction Facility to $150 billion from $100 billion, and also allow AAA asset-backed securities to be pledged as collateral. I think that’s relevant, but it’s obviously sour grapes.
Because you can’t argue with the fact that the dollar is bouncing. Has it found the bottom?Wiser men than me say “yes.” My doubts that this is anything more than a short-term rally are obviously sour grapes.
Now for some charts on oil. Talk about confusing signals ...
This weekly picture looks pretty mixed. Let’s look at a daily chart.
The daily chart for oil looks pretty bullish. With all these mixed signals, we’ll have to see how it develops.