Unemployment Rates shouldn't impact the Stock Market
Call me crazy but I don't believe unemployment numbers should impact the stock market any. Certainly, they do impact it a lot. Stock market rallies on surprisingly good numbers and drops on bad ones.
But, my point is a point on legitamacy. Investors and analysts can't know just from these numbers, if unemployment rate jumps, that businesses are cutting jobs and doing hiring freezes because they can't sell and make as big a profit as before.
There are other explanations for an increase in the unemployment rate. You could have a quarter of the year in which businesses are transistioning from one product line to another. Sorta like our auto industry cutting jobs while they transition from trucks to clausterphobic-o-biles (small cars).
A business could be shutting down a manufacturing facility, cutting 300 jobs, in order to help manage the cost of building a BIGGER facility elsewhere that will hire 1000.
Maybe I am wrong though and investors and analysts actually look into this stuff at this kind of detail. But, I doubt it. I've never seen a stock market rally on poor employment numbers with an optimistic outlook.
While the "futures market" is seen as a "futures market" I have to disagree. As far as I can tell investors are lemmings that flock like geese. When it's time to buy, everyone buys.... When it's time to sell.... everyone sells. When it's time to panic over the employment situation, everyone panics.
Thing is... Being an investor gives you plenty of information on when and how businesses you invest in are going to expand and open up new employment. Just from a limited time (5 months) of being a first time investor, I've seen lots of companies that are set to provide hundreds of jobs each from expansion projects.
Yet.. From Dr. Pepper Snapple to an OTC company: Southwall Technologies.... (both are investments of mine) what I see is that the expansion is for 2010... Not for Christmas of 2008.
One would hope the "Futures Market" would send the stock market ever so slightly higher from week to week as we get to what will be a tremendously positive employment outlook 2 years from now. Yet, this "futures market" can't even predict what the weather will be like tomorrow.