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Inconsistencies Я Us

02-02-2024

Well, the government did it again, i.e., produced a nonfarm payroll report that literally made no sense when compared with other data. The BLS would have us believe that over 350,000 jobs were created, but of course even the household survey did not match the establishment survey which is used to create the nonfarm payroll number. Nor does any of the data fit with the ADP reports or the Challenger job numbers, nor the individual layoffs that have occurred at so many different companies. Unfortunately, the market trades this data as though it were gospel. Thus, we have to suffer through maniacal moves made by algos, which will dissipate over the coming weeks.

Some Things Don't Add Up In any case, last night's tech earnings were inclined to make people bullish, as both Meta and Amazon were successful at beat-the-number and Apple was as well. That is, if you only care about what the latter reported and not what it is likely to report, as Apple's guidance going forward was flat and it will be lucky to meet that given how squishy its attempt at guidance was.

Nonetheless, that hardly mattered, as the net of it all produced a 1% gain in the Nasdaq through midday, thanks to the aforementioned tech stocks. However, the less popular names in the tape, i.e., smaller-cap stocks and companies away from tech, were under pressure along with most anything that wasn't an equity investment. In the afternoon, the market ramped higher, led by a gain of just over 1.5% for the Nasdaq.

"It's Not About Aptitude, It's the Way You're Viewed" Away from stocks, green paper spiked on today's data while fixed income was smashed. That combination sent silver 2% lower compared to a 1% percent in gold, which still left it up about 0.75% for the week. Not so for the gold stocks, however, as they were almost all hammered across the board to new lows for the week (the big-cap miners being the weakest, as some smaller ones fared better), despite gold's being higher for the week. In short, things that were popular were hardly dented by today's news and things that were unpopular were punished.

Positions in stocks mentioned: long AAPL puts.