Weighing The Week Ahead: Can Employment Continue As The Engine Of The Economy?

Market data has remained mixed.The weak Q1 GDP is not consistent with some of the most important measures.This week I expect pundits to be asking:

Will the jobs report signal continued strength?

Personal Note

In response to reader interest I am trying to do an abbreviated WTWA when I am away.I will include the update of indicators and a few ideas about what I am watching. Some noted that this would also provide a forum for some of our “regulars” to congregate.

Theme Recap

In my last WTWA I predicted a week of rebuilding the wall of worry. Some problems have been avoided, even if not completely solved. There are always new ones, and we did get some of that discussion last week.

The Story in One Chart

I always start my personal review of the week by looking at a chart of market performance for the week. Once again, there was little change for the week.

Whatever the news, the net market effect was (once again) very small.

The News

Each week I break down events into good and bad. Often there is an “ugly” and on rare occasion something very positive. My working definition of “good” has two components.The news must be market friendly and better than expectations.I avoid using my personal preferences in evaluating news – and you should, too.

The Good

The best news is the strength of the earnings rebound. This is true both for year-over-year results and forward expectations. (Brian Gilmartin).

While the government shutdown deadline was merely extended for a week, I am encouraged by the handling of this issue. The market hated this uncertainty on the past.

The Bad

The soft GDP numbers and uptick in initial jobless claims (not the time reflected in Friday’s payroll report) were the worst news.

The Ugly

Still Korea.

What to Watch For

Everyone wants to evaluate the Trump agenda, especially reflecting on the first 100 days. I do not expect movement on any of the big issues without some participation by Democrats.