That is why 10yr USTreasuries have rallied 50bps from its recent highs.
Job growth was good, right?
That's quite a sudden change in Initial Jobless Claims, no? 4wk average up 20k in a few weeks. Headline number 53k higher in 9-10 weeks. This is the single number that I pay attention to instead of trading my life away on the monthly volatile and unreliable NFP.
Since the U.S. doesn't have a lot of manufacturing and its economy is based on services and consumption we should take a look at the american services PMI, the ISM Non-Manufacturing:
First chart: what a miss! Market expectations targeting 57 or so... the number came out way lower. Its components were simply horrible.
New Orders: back to 2009 levels, largest drop ever recorded.
Employment, slight drop, back to Oct2010 levels, barely expansionary.
New Orders - Inventories, NSA, seen in the seasonally adjusted chart: This baby is below 2007, 2008, 2009, 2010 levels.
It is tough to believe the economy will keep its growth pace, especially when QE2 ends, when I expect the equity markets to drop after a few misses in earnings and lower guidances from companies.
In the mean time... the US Dollar, the Euro and the GBP should keep its path lower against robust currencies from countries with low debt, hard assets in storage...
Will Bear-non-QE come to the rescue again?
I am sure the U.S. cannot afford eternal fiscal deficits.
