Wednesday, August 1, 2012

July NFP Est. Revised Up to 100.5K

As much as we hate to update our numbers too often and/or have our estimates be smack down in-line with the professional estimates, that is the case with our updated July NFP estimate.  Given the significantly higher ADP number that was released this morning, after an update, our model generated an NFP of 100.5K, higher than our initial 80K, and pretty much at the same level as the 100K consensus.  We note that even if Friday's NFP figure meets expectations, it will not be very positive for the market.  The market will give us an idea about what NFP will make it move nicely higher (either because of the strength of the figure or its extreme weakness which could push the Fed into monetary easing) or not-so-nicely lower (based on a not too hot nor too cold NFP print) after the FOMC television event in about 30 minutes.  With 100K net jobs added per month and declining real wages (excl. government wages as shown in yesterday's June personal income & spending report), the current and potential state of the economy, we believe, does not warrant where the equity markets are currently.  Of course, the premium given to the markets is mostly based on another QE, in our opinion.

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