Labor Day Blues

Do you remember the jingle…..Once Twice Three Times a Lady etc……… “Three Times A Lady” was a popular song from the funk/soul band the Commodores back in 1978. It is also a nice way to describe the past three days of positive reports on the economy. Sing it again Sam!!!

Last week on my radio show (“Let’s Talk Money” which can be heard every Saturday 12:00 – 1:00 on Radio 810/WGY or listen from anywhere in the world on the worldwide internet  www.wgy.com  if you don’t’ have access to AM radio) I stated that if we saw any signs that the economy was growing faster than the Bad News Bears would lead you to believe then this stock market would react favorably. For those investors that were nervous, I said that there was a lot of bad news built into the stock market this summer and they should hang in there at least until today before selling, and it paid off so far.  Today’s positive jobs report capped off the third day of reports that signal the economy isn’t as bad off as so many economists predicted.

The month of August was dismal and most indexes lost approximately 5%, but so far September is starting off on the right foot, gaining almost 4% as of this morning’s +100 plus point gain on the Dow (let’s hope it can hold on for the entire day). Wednesday the market shot up +255 points after two stronger than expected reports on manufacturing growth in China and the US sent investors back into equities and out of safe havens like gold, treasures and the US dollar.  Thursday the Dow gained almost +54 points after better than expected housing and retail data gave the Bulls some more reasons to cheer.  This morning the Labor Department released Augusts’ Non-Farm Jobs Report and it was icing on the cake, US employment fell for a third straight month but the drop was far less than expected. Nonfarm payrolls fell by -54,000 but private employment increased by +67,000 and a revised +107,000 in July. All in all, September is looking good and a nice way to end the long, hot and volatile summer.

I like flounder when eating fish, but I have not floundered on my outlook for the stock market, I am still in the bullish camp and have not been persuaded to run for the hills. This stock market has marched to its own beat since March 2009 when the Bears thought the world was coming to an end. I can understand why there is so much pessimism on the economy between the unemployment rate being close to 10%, stimulus money that is being manufactured at a drop of a hat and an administration that is providing more entitlement programs than we could ever imagine. What the US needs to do is arouse the private sector who has the ability to craft new ideas that generate new jobs rather than creating more governmental agencies and governmental jobs to go along with it. Yes the Bears have reason to boo, but the stock market is looking at the fundamentals of the economy and so far isn’t bothered about the level of debt this country has at the moment.

Always remember, for every economist that is bearish on the economy, you can find one that is bullish. It’s important that investors stay focused on the long haul and not get caught up in the day to day headlines or listen to any of the talking heads that promote negativity in order to sell advertising or boost their own ratings. Let’s face it, how many BREAKING NEWS ALERTS can we stand in one day? If you get too stressed watching TV every day, take up Yoga or use the Breaking News stories to help exercise and get your heart beat up.