Jobs Data Disappoints 'Green Shoot'ers

The chart above shows the recent trend in the jobs data. This morning, the govt. report showed that the economy lost 467,000 jobs. (vs. -365,000 consensus) and the unemployment rate rose to 9.5% (vs. 9.6% consensus).

This came as a big disappointment to investors, who were hoping that the above trend of lessening job losses would continue, or at least not get worse. These jobs figures tend to be volatile from month to month, so one month's figure shouldn't be read into too much, but its still a disappointment. Consumer spending is the biggest component of GDP, and consumer spending is highly correlated to employment for obvious reasons.

The news is similar in Europe, where the unemployment rate also hit 9.5%, a 10-year high. This prompted the ECB to leave its benchmark rate unchanged at 1.00%. ECB President Trichet said that economic activity this year is likely to remain weak, but declines should lessen, with a full recovery expected by mid-2010.

Asian markets were lower overnight; the dollar is higher today, which is pressuring oil, gold, and commodities; the energy sector is the biggest laggard this morning (-2.9%); the 10-year yield is lower at 3.50%; and the VIX is up +7.5% to 28.20.

Trading comment: As the market rolled over yesterday afternoon, I started to add to some of our etf hedges in portfolios. I started with positions on the S&P (SDS), and also hedged some energy exposure with the DUG. In aggressive accounts, I also shorted some AMZN and ADBE. Today those are all working out well, but I will continue to monitor and adjust our overall net long exposure based on how the market responds to today's selloff over the next few sessions.

long DUG, SDS; short AMZN, ADBE