Premarket: Employment Data Shows Nonfarm Payrolls Fall

We look shaky in this pre-market, as a real tough number arrived from the Labor Department. Bernanke's cash helicopter looks perhaps overstressed. We wish this report could be moved, because its impact on Friday is too drastic and could force a panicked selloff.

The Employment Situation Report for February showed a loss in nonfarm payrolls of 63K. Unemployment in February measured 4.8%, better than expected. Average hourly earnings rose slightly, up 0.3%. There were strong job decreases in manufacturing, construction and retail trade.

The Federal Reserve acted ahead of the number, announcing two initiatives "to address heightened liquidity pressures in term funding markets." The amounts outstanding in the Term Auction Facility will be increased to $100 billion and the Fed will continue the effort for the next six months or longer if necessary. Also, "starting today the Fed will initiate a series of term repurchase transactions expected to cumulate to $100 billion." See Fed statement here.

More signs of recession are offered here in the employment figure. The Fed will have to own up to that likelihood now. The market could force the Fed into a emergency move today. Important lows were tested yesterday and the floor may be fragile at this point. As the data continues to scare investors, capital will continue a volatile and uncertain path. Until data trend smooths, it will continue to shock markets and capital preservation remains of top priority.

Thank you. (disclosure) Important to: AMEX: DIA, AMEX: SPY, Nasdaq: QQQQ, AMEX: SDS, AMEX: DOG, AMEX: QLD.