Thursday, April 3, 2008

NET LIQ VALUE: $25,459.49

Capital injection came in and reflected in price. Not much trading today, but there were some big news. Jobless claims came out worse than expected. From Bloomberg:

  • New Claims - Level
    Consensus 366 K
    Actual 407
  • Definition
  • New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. Why Do Investors Care?
  • Jobless claims are an easy way to gauge the strength of the job market. The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy. Nearly every job comes with an income that gives a household spending power. Spending greases the wheels of the economy and keeps it growing, so a stronger job market generates a healthier economy.
  • There's a downside to it, though. Unemployment claims, and therefore the number of job seekers, can fall to such a low level that businesses have a tough time finding new workers. They might have to pay overtime wages to current staff, use higher wages to lure people from other jobs, and in general spend more on labor costs because of a shortage of workers. This leads to wage inflation, which is bad news for the stock and bond markets. Federal Reserve officials are always on the look out for inflationary pressures.
  • By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it's a good bet that interest rates will rise, bond and stock prices will fall, and the only investors in a good mood will be the ones who tracked jobless claims and adjusted their portfolios to anticipate these events.
  • Just remember, the lower the number of unemployment claims, the stronger the job market, and vice versa.

George Soros also spoke out about things haven't been this bad since the Great Depression (late 1920's). Markets tanked pre-market open and at the market open, but rallied at 10am. I believe this is because investors expect the Fed to bail them out. I think commodity prices and companies related (eg. Exxon) also drove the market higher. I was sort of bullish on the dollar, but now I just want to short it.

Made two dumb trades that happened because I had default futures order at 2 cars, when I meant to do one car. Lesson learned.

Employment situation supposed to come out today at 8:30am. We'll see how that goes.

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