NFP Day, and Goldman Recommends Gold Again
Bad News Might Not Be Good News
Note: Active Trader post will be out between 9 and 9:30 .
Today:
Market Rundown
NFP
Goldman’s Gold Buy Rec
1- Market Rundown
Good Morning. The dollar is up 36 points. Bonds are on either side of unchanged. Stocks are sleepily mixed +/- 20 bps each. Gold futures are up $1.70. Silver Fu. are up 20 cents. Oil and Copper are unchanged. Grains are uniformly up 50-60 bps. Bitcoin and Ethereum are down 50bps. Today is NFP.
2- NFP Today.
The Fed has given every indication they’d like to see unemployment higher in conjunction with inflation lower. Therefore if Jobs stay robust, the rate hike fears accelerate even more especially if China is reopening. So instead of focusing on China reopening as bullish for economy, the market will likely focus on Fed getting stingier. Thus market is definitely more fearful than hopeful coming into today. So, assuming the Fed does err on the side of hawkish bias, then it would take a very weak employment situation to change their minds. Short version: Market cares more about inflation lower than Payrolls lower. The Fed has made it clear they will keep sacrificing jobs until CPI drops.. for now.
Goldman, JPM, comments at bottom
FRIDAY, JAN. 6
8:30 am Nonfarm payrolls Dec. 200,000 263,000
8:30 am Unemployment rate Dec. 3.7% 3.7%
8:30 am Average hourly earnings Dec. 0.4% 0.6%
8:30 am Labor participation rate, ages 25-54 Dec. -- 82.4%
10 am ISM services index Dec. 55.1% 56.5%
10 am Factory orders Nov. -1.1% 0.9%
10 am Core equipment orders Nov. -- 0.2%
11:15 am Atlanta Fed Raphael Bostic
11:15 am Fed Gov Lisa Cook
12:15 pm Richmond Fed Tom Barkin
1 pm Kansas City Fed President Esther George speaks JPM, GS, and ZH NFP
JPM: thinks Jobless claims filings suggest continued strength in labor market They forecast 200,000 jobs added in December, with u-rate stable at 3.7%.
ZH’s Dec. Payrolls Preview (ZH prem) points out that given the very strong ADP and other levels there is fear of a very strong payrolls number, and a much larger negative effect it could have. 1
How Goldman is handicapping the payrolls today:
GREATER than 263k S&P down at least 2%BETWEEN 200k – 263k S&P down 1 – 2%BETWEEN 150k – 200k S&P up 50bps - 1%BETWEEN 0 – 150k S&P up 1 - 2%LESS than 0 S&P down 1 – 2% on recessions concerns
We view these not as answer keys to what will happen but more like a guide as to the players’ and their larger client bias
Goldman, JPM, comments at bottom
3- GOLDMAN ON GOLD FOR SATURDAY
Goldman put out another short bullish rationale for Gold to its institutional clients. The last one was right before Buy Season on Nov 14th and was accurate. We go through this new one and lay it out Saturday. It is very important, not for the rationale as you might expect. Historically the report after Goldman has made money for clients (they just did) is the one that has informed our own trading best of future possibilities and if they should be taken seriously in an actionable way.
What their rationale is
Troubleshooting the rationale
How to express the trade
When to express the trade
