The Market

Friday's tend to move opposite the weekly trend in the market as profit takers lock in gains for the weekend. In adition, we're at the end of the monthly-strength from 401(k) contributions. I think the jobs number today is being used as the catalyst for booking gains. But I think the jobs number is interesting, and actually makes a strong case for the continuation of the bull market.

First of all, jobs numbers jump around month to month, and last month's numbers were too hot. So it's good to see that we're not overheating with month after month of huge jobs gains. The last thing we want is an overheating jobs market that puts pressure on wages. The Fed would step in pretty quickly and risk slowing down the economy. We have a low unemployment rate at 5.1%, so there's not much room for huge job gains withoug pressuring wages. The GDP is right in the 3-4% sweet spot.

The TV folks are busy arguing when the Fed will be done raising rates. They're using baseball analogies. Are we in the 8th inning? What about the 9th inning? How many outs are there in whatever inning we're in? When will the coach bring in the closer? It's kind of silly. But I enjoy it, as you can tell!

One good thing for all of us, is that interest rates are back down near the lows. The catalyst for a bursting of the housing bubble might be higher rates, and their not there yet. I think this means housing will continue to do well and this opens up the floodgates for folks to refinance again. Especially folks who missed their chance last time or who have bought within the past year or so, will have a chance to lock in low rates. Those who have more risky ARMs and interest only loans can now lock up low rates for a long period, and bring stability to their own financial picture. And with home prices surging again year over year, that means there is new home equity available to be borrowed out at low rates, and spent or invested. This will create more economic stimulus.

I think things are looking good for the economy and financial markets going forward. But that doesn't mean the bears won't try to build a wall of worry in the coming weeks. They'll carp about the jobs numbers, which you now know is really on the bulls side at this point. They'll whine about high energy prices, which have been creeping up again. They'll say that the market has come too far, too fast. They'll anticipate any earnings warnings that come in the next few weeks, and make sure those receive spotlight attention. But Wall St. loves to climb a wall of worry. Lets see how it plays out when actual earnings start to roll in this summer.