At 8:15am, the ADP payrolls report disappointed. See the red arrow on this chart of the S&P 500 futures (click to enlarge):
The market gapped down at the open and stayed underwater all morning until 11:30am when Barry Ritholtz published my withholding-tax data in “Payroll Withholding Taxes Surge in March” (blue arrow). The market then rallied for 21 straight minutes (blue line), exceeded the ADP level (red line) and finally broke into the green.
Not bad, huh? Is Barry’s blog big enough to move the market like this? On a sleepy day with light volume, I think so.
Note to bulls: I can push your market up into the green, but you can’t expect me to hold it up there all by myself. I am only one man after all.
The improvement in the data crept up steadily throughout the month until it finally amounted to something substantial enough to surprise everybody when they finally saw the total. I think that it is notable that even though this data was shocking enough for a CNN/Money reporter to call me, the market still rolled over as we were talking, and finished down on the day.
Has a potentially very-strong jobs report already been priced into the market by the egregious February-March rally? Maybe so. Don’t forget what happened back here:
I’m thinking that we are set-up for a classic “sell the news” reaction. If it begins to materialize next week, don’t just sit there staring in disbelief.
Note: while I made a mistake in one of the calculations in the post on Barry’s blog, it was in the favor of the bears. In addition to that, I used the raw data to measure the March 2009 to March 2010 growth percentage. And since that does not account for the payroll-tax credit that is still in effect, the real growth percentage is stronger still. So, the data supports job growth in excess of my original 300,000 guesstimate. On Larry Kudlow’s CNBC show tonight, Joe LaVorgna of Deutsche Bank, who has “adopted” my method gave an estimate of 350,000. And still, the futures are lackadaisical as I write this.