Market Commentary

All are looking for a hero
June 04, 2010

All are looking for a hero in a culture that seems to stuck on themselves or attempting to place blame upon someone or something else for any shortcoming or setbacks that may occur.  While I will readily admit I know close to nothing about professional sports for I find the vast majority of athletes as arrogant, pompous and to self absorbed, I think two heroes might have emerged.

Unless one has been living in a cave, most know the story about the missed perfect game of a Detroit Tigers pitcher because of a bad call by the umpire.  Something occurred that used to happen many years back when everything good was manifested in sports.  The umpire contritely apologized and the pitcher graciously accepted his apology.  I think the comments by both have the potential to touch and perhaps transform society.

Abraham Lincoln stated in his infamous Gettysburg Address “The world will little note, nor long remember what we say here, but it can never forget what they did here…

Some have waxed philosophically sports manifests the attitude of society, especially that of baseball which is regarded as the national pastime. While I will not remotely suggest a missed call that ruined a perfect game is anywhere close to the magnitude of 50,000 deaths in three days, I believe this seemingly inconsequential action can reverberate throughout society.

Since the markets are a microcosm of society, reflecting all known and unknown variables, the apparent public support of both pitcher and umpire alike should give hope to all.

Markets, economies and governments depend upon trust and credibility to function properly.  I have penned many times the President has awoken the great American electorate, the silent majority.  This silent majority is now demanding true leadership versus by governing by spin and sound bite.   Is this missed call and the reaction to it is symbolic to the tectonic change occurring in society?

Speaking of tectonic change, May’s employment data is released today at 8:30.  Nonfarm payrolls are expected to rise by 523,000, the biggest increase since 1983 as per Bloomberg.  I must write the expansion is probably the result of census workers, private payroll jobs are expected to rise by 225K, nominally lower than April’s 231K increase.

Will private hiring surprise on the upside?  Momentum has been building during the year as 483,000 private jobs have been added during the first four months of the year, the vast majority occurring in April. The headline rate is expected to decline to 9.8% from April’s 9.9% level.  Average hourly earnings are expected to rise by 0.1% and the average workweek unchanged at 34.1 hours.

Commenting about yesterday’s market activity, stocks were “relatively” quiet as speculation about today’s employment report will offset concerns that Europe’s debt crisis and China’s steeps to cool growth will stifle the global recovery.

Last night the foreign markets were down.  London was down 0.41%, Paris down 0.18% and Frankfurt down 0.23%.  Japan was down 0.13% and Hang Sang down 0.03%.

The Dow should open moderately lower on European debt concerns but this could change radically given the perceived importance of the upcoming employment data. The 10-year is up 8/32 to yield 3.33%.