The Jobs Report Was A Crushing Blow To Some Players In This Market

jackhammer depression

Just two and a half weeks ago, the bears were starting to feel good.

Markets around the world seemed to be rolling over. Commodities were falling. People were talking about deflation.

And then, the market turned, and then we got Friday’s strong jobs report.

Now the market is back to making new highs again, and the market bears are crushed.

A new note from Olivier Korber at SocGen is titled “US payrolls annihilated ‘sell in May.'” Basically, whatever temptation there was to dump risky assets starting in May (as the cliche goes) has been sapped.

Steven Englander of Citi wrote yesterday:

The implications of the payroll release for FX is that the US is back on track as an outperformer (admittedly modest, but still standing out) in a world of underperformance,  From a Fed perspective labour market improvement since last year has been steady but clear, with household and payroll employment and aggregate hours converging to a 1.5% y/y gain (Figure 1, upper panel). This is probably at the low end of what the FOMC core would consider acceptable.

And the same takeaway was offered from trader Mark Dow, who tweeted yesterday.

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