March Jobs Report Adds To Recession Concerns

The March jobs report came in this morning, and marked a third-straight drop in U.S. payrolls. This data further confirms recession warnings from many, including the Federal Reserve Chairman Ben Bernanke.

About 80, 000 jobs were lost last month. That's 80,000 fewer people working and earning money, than there were in February. Both January and February saw a loss of about 75,000 jobs. That's a total of loss of 230,000 in the first quarter of the year.

So, unemployment is now 5.1% and there is additional reason to fear a recession. The Federal Reserve will likely want to cut rates further, but they are running out of room there.

Yet, the stock market did not seem to care this morning. Since opening slightly higher, the major indexes have declined slight and are currently mixed. The DJIA and Russell 2000 are slight in the red. The S&P 500 and NASDAQ 100 are marginally higher.

It's going to be difficult to fuel a sustained rally if companies are not growing their earnings. That's the driver of higher stock prices. Fundamentals do not always control in the short-term, but they do eventually assert themselves at the "big picture" level.

I remain long term bearish, but throttled back a bit on my negative deltas as this (what I believe to be) bear market rally broke out.

Keep an eye on your risk, too.

Trade well.

Christopher Smith
TheOptionClub.com