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OPINION

Jobs to the Rescue

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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North Korea detonates an atomic bomb and our stock market blows up. In a way, that sounds reasonable, considering yesterday was the fourth time the rogue nation has detonated an atomic bomb; the previous three, our stock market didn’t get vaporized. On the contrary, each time it’s happened, our stock market reacted by closing higher, staving off a massive sell-off.

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North Korea
Atomic Testing

Dow Close Prior Session

Dow Close after Detonation

Oct 9, 2006

11,850

11,857

May 25, 2009

8,277

8,483

February 12, 2013

13,917

14,018

So, the big question is what does the market really fear?

I understand there are big questions about the global economy. There are worries about bad actors around the world, and their belligerence in the face of condemnation, but there is little retaliation. Overall, a malaise permeates the air. In fact, there has never been a period since the start of the Great Recession where we could honestly say the nation was in a boom period. I think it all comes back to one thing.

We are afraid that a lack of leadership could set the nation back, unlike other times when there were doubts about the folks in charge. This isn’t about the White House; it’s about Washington, and the big agencies that we’ve trusted for years. It’s also about self-doubt and the need to be rescued from our individual angst and worries. For a nation of individual achievers, we have put too much faith in institutions that have let us down for a number of years.

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We all know businesses, just as life is cyclical and markets go up and down; yet we believe when the dust settles, all will be well, including vanquished foes that dare to intimidate or upset our applecart. We are not in that place right now, and it’s emboldening the bad guys and making our market more vulnerable. Moreover, improving the jobs picture would go a long way in changing all of this -Jobs Surge.

Yesterday, the Federal Reserve harped on about the usual stuff, hinting at some worries that they’ve moved too fast to hike rates and frets about a small blimp in jobs that will not be enough to offset the tsunami of global disinflation. So, it’s all riding on jobs, which have hinted for months at a leap in total new hires and wages. Although it was lost in all the commotion, the ADP report was big news. The total number was higher than expected, and a better quality mix (read fewer burger-flipping jobs- more jobs that are professional).

The Street has mostly given up on the ADP report. As a harbinger for the government number out of the Bureau of Labor Statistics, it is typically not far off.

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Trapdoor

The market got sloppy about a month ago, and now it’s as if it’s fallen through a trapdoor. The bounce that began after the summer swoon and flash crash is long gone, and the market must find a way to hold on as support south of 16,900 is non-existent for about a thousand points.

Dow Jones

% Change

YTD

-2.98%

5 Day

-3.96%

1 Month

-4.65%

3 Month

-0.03

There’s a chance it holds, but it all boils down to tomorrow’s jobs report and surviving more wild gyrations out of China.

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