by Greg Canavan, Daily Reckoning.com.au:
To paraphrase Socrates, we know enough to know that we actually know very little. We were reminded of this on Saturday morning when we woke to see global markets soared on the news that the US unemployment rate had dropped on better than expected employment growth.
This confused us. We thought that bad news was good news. And that good news was bad news. On this logic, the good news on employment should’ve been bad news for the stock market. A lower unemployment rate should bring an end to the Fed’s easy money quicker than expected. So the market should’ve tanked.
But it didn’t. It went up. By a lot. Good news IS good news. And it seems that bad news is still good news too. Because soon after the employment data came out, we learned that activity in the US services sector came in weaker than expected in April. And the employment sub-component of the report reflected a slowdown taking place, in stark contrast to the earlier, bullish jobs release.
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