Super Bowl Sunday 2011: It’s all in the Numbers

Feb 6, 2011

On Friday, the much anticipated monthly employment numbers came out. Pundits were expecting an increase of 150,000 jobs, but a slight increase in the unemployment number from 9.4 to 9.5%. Instead, jobs creation numbered only 36,000, yet the unemployment rate actually dropped significantly to 9.0%. How can this be? The unemployment numbers come from a survey of 60,000 homes. On the other hand, the jobs number comes from a list of companies and government agencies. So was this number good or bad? I guess it depends on which survey you believe.

Meanwhile, QE2 continues to work its’ magic on the stock market, which having little effect on the bonds. Quantitative Easing 2 began on November 12, 2010. At that time, the long bond (30 year treasury) was at 4.24, and the DJIA was at 11,283. Since then, the long bond yield has actually risen to 4.74, yet the stock market has gone up over 800 points to close above 12,000. How does one explain this? Some people feel that the economy is recovering faster than expected. Others think this is simply the “voodoo” of Quantitative Easing. Pretty much the same thing happened last year as well. Every selloff has been bought, and you could make a lot of money simply buying the dips, especially the last two months. Will this continue to send the market higher? I don’t know, but at some point, if bond yields and the market continue to rise, bonds will be become a lot more attractive vis a vis stocks. Also, there is fear as to what will happen when QE2 ends. In the meantime, the market continues to rise almost every day to higher and higher prices.

Finally, here’s some Super Bowl Trivia from Daily Infographic

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