Obama’s Over-Under Holds Positive
Amazing, but true: Despite vicious attacks on business and banking, President Obama landed on the right side of the Tens: Dow over 10,000 and Unemployment under 10%.
Exciting news: The Dow crossed above 10,000 Friday.
Usually, that kind of move gets a headline somewhere. It was a big deal when it happened last year, for the thirty-something-th time.
The exciting part about closing over 10,000: Traders started this year wondering how soon we would hit Dow 12,000. Yet, even as our President attacked the financial system that got us from 6,547 last March to 10,725 last month, he still couldn’t permanently beat the Dow back down below 10,000.
He may eventually succeed, but he’s clearly up against an economy that wants to get rolling. Earnings reports have been coming in from all industry groups, looking much improved.
I’m amazed that higher unemployment came as a surprise to experts. I sort of thought that when the President attacks major corporations and entire industries, he would also kill jobs. But we had an interesting effect.
On February 5, The Bureau of Labor Statistics reported that unemployment had dropped from 10.0% to 9.7%. That’s good. But the day before, we got an Unemployment Claims report that showed an additional 8,000 unemployed, with a deteriorating four week average. That’s not so good.
Recruiter’s View – The nightmare is subsiding. Underlying companies and employment opportunities are getting healthier just beneath the surface.
Obama is fast losing credibility and traction. Traders now see his attacks as opportunities to buy stocks in good companies priced at Obama-bashed discounts. He can say what he wants, but he can’t make it stick. When he backs off his tirades, the target stocks move back up.
(If this is true for individual stocks, will the November elections add 2,000 points to the Dow? Maybe. If so, expect employment to expand with it.)