FRIDAY’S MARKET – Good Jobs News is Bad Market News

This day will without a doubt be dictated by the most important economic report in terms of market following. The monthly Employment Situation Report certainly deserves the attention today, as it came in astoundingly strong in a period that could have easily shown weakness on bad weather. Nonfarm payrolls and the unemployment rate improved far beyond expectations, which is good news about the American economy. However, that is bad news for investors, because it seems to push the U.S. Federal Reserve closer to interest rate hikes. We cover the market daily at our stock market blog at a level unmatched.

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Sector Security	3-5-15	YTD	TTM
Vanguard S&P 500 (NYSE: VOO)	+0.1%	2.5%	14.1%
iShares Dow Jones (NYSE: IYY)	+0.2%	2.8%	13.1%
Fidelity NASDAQ  ETF (Nasdaq: ONEQ)	+0.4%	6.0%	15.8%
ProShares Ultra Gold (NYSE: UGL)	-0.2%	1.3%	-23.9%
ProShares Ultra Real Estate (NYSE: URE)	+0.6%	2.1%	39.3%
ProShares Ultra Oil (NYSE: UCO)	-2.1%	-14.4%	-75.5%
WisdomTree US$  Bullish (NYSE: USDU)	+0.4%	3.3%	15.0%
iShares 20+ Yr. Treasury (NYSE: TLT)	-0.1%	-0.4	21.9%

Economic Report Schedule

Economists and market strategists alike will be focused on one data point Friday. The most widely followed economic report has been released, the monthly Employment Situation Report. It was better than expected for the month of February, but remember, good news is bad news now because of how it affects the Fed’s rate plans.

Nonfarm Payrolls showed job creation of 295K for the frigid month, far better than what was expected at 230K. Though January’s payroll figure was revised lower to 239K; December was unchanged above 300K. Private nonfarm payrolls also beat expectations, marking 288K jobs created versus expectations for 225K. Again the prior month was revised lower to 237K. The unemployment rate improved to 5.5%, where economists thought it would improve to 5.6%, from January’s 5.7%. Labor force participation deteriorated, though, so there will be the usual debate about whether the unemployment rate really tells the story.

Nonetheless, the jobs data was clearly positive, where a negative report could have been blamed on the weather. While revisions may later come, today investors have to contend with the fact that the economy appears to be doing better than expected. That means the Federal Reserve could be backed into a corner and forced to raise interest rates sooner than even they might like to, given recent dollar muscle building. As a result of the super strong report, stock futures moved lower before the open and it looks like the SPDR S&P 500 (NYSE: SPY) will have a slow start to the day.

ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected	Actual
FRIDAY
Employment Situation Report
-Nonfarm Payrolls	239K*	230K	295K
-Private Payrolls	237K*	225K	288K
-Unemployment Rate	5.7%	5.6%	5.5%
International Trade	$-45.6 B*	$-41.8 B	$-41.8 B
Consumer Credit	$14.8 B	$15.0 B	3 PM ET

 *Revised

EPS Report Schedule

Apple (Nasdaq: AAPL) is being added to the Dow Jones Industrial average, which I see as a positive for Apple and the Dow. For Apple, funds that track the Dow must now buy Apple, and so the stock rose 1.6% to start the day. The Dow, and the SPDR Dow Jones (NYSE: DIA) benefit because it is a price-weighted index, and Apple is sure to move the index with its superior price action to the company it replaces, AT&T (NYSE: T). The earnings day includes Staples (Nasdaq: SPLS) and Big Lots (NYSE: BIG).

HIGHLIGHTED EPS REPORTS
Company	Ticker
FRIDAY
Big Lots	NYSE: BIG
Cheetah Mobile	Nasdaq: CMCM
Chimerix	Nasdaq: CMRX
Foot Locker	NYSE: FL
Furmanite	NYSE: FRM
Global Sources	Nasdaq: GSOL
Gramercy Property Trust	NYSE: GPT
KVH Industries	Nasdaq: KVHI
Monroe Capital	Nasdaq: MRCC
New Home Co.	Nasdaq: NWHM
Noah Holdings	Nasdaq: NOAH
OFS Capital	NYSE: OFS
Southcross Energy Partners	NYSE: SXE
Staples	Nasdaq: SPLS
Tribune Media	Nasdaq: TRCO
Vantage Drilling	NYSE: VTG
Verso	NYSE: VRS

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