Increasingly disappointing news over May carried into June with a bang as the NFP# fell below 100K. The last remaining positive was literally a game changer in many minds with markets falling to the largest daily loss in 2012. As discussed into last Thursday’s trade, it will be all on U.S eco’ data….The next few days, U.S markets will focus on its saving grace (employment…housing). The ADP (105k+), Initial claims (370k)on Thursday and NFP# (150k)need to come at consensus. If these numbers falter, the market will have nothing to hang its coat on”. The entire market narrative has changed as ‘slower growth’ has eclipsed the turmoil in Europe over the past 2 trading days.
The only hope for Europe has been ‘policy intervention’, now the hope is coming back to U.S and it’s markets. Unfortunately as realized in Europe there is no easy fix as in the past few years. In Europe, ECB doesn’t want to tip it’s hand before Greek elections and the idea of the FED taking very aggressive action this early isn’t a reality as eco situation likely not soft enough to justify such. Any other FED action is likely seen by markets as having little effect (ie. more twists). This won’t be a market, it will be a debate show now as to what and who will or won’t do.
If May wasn’t demoralizing enough, this start to June will surely do the trick near term. Due to this, any ‘longs’ not selling in May and/or climb back into SP 1340 as noted recently, will likely begin reduce exposure now allowing for market to go even lower. Any investors with going ‘long’ expectations before eco’ data hit will fall back further into the bleachers.