Wednesday's Earnings Note Revisited

I wanted to add one comment on Wednesday's  Ed Yardeni's earnings note.  Unfortunately I forgot to conclude all of my thoughts at the bottom of that post so I'll put it here.  I've never in my 28 years seen the kind of valuations we are experiencing currently except when we were either going into a war or beginning a recession.  Syra and Iran to the contrary, there is no evidence that we are on the cusp of some sort of conflict similar to the Gulf wars.  Economic data currently is also not supportive of a recession although it has shown that growth has slowed since the 1st quarter ended back in March.   So either we're going to have that recession, a war or some natural disaster is going to come calling or something in Europe is really going to blow up because otherwise stocks are dirt cheap.

What this tells me is that stocks are an under owned asset class, perhaps as unloved now as in any time in my career.  I know what the valuation markers say and I know that at times I can sound like a broken record in this regard.  But someday folks are going to wake up and realize the inherent value in American companies.  When that happens I think stocks will soar.  I'm so confident of that statement that I think when the final history of this decade is written those of us lucky enough to be around at that time will look back and say something like, "I can't believe where XXXXX was back in 2012".  That may not happen tomorrow as I'm well aware that we have all sorts of short term concerns right now.  But longer term, in the time period where as Warren Buffett likes to say Mr. Market gets a vote, stocks valuation will come out.  It is in that frame that for the most part we invest client monies and it is in that time frame that I make for the comments above.

I'm going to be in and out for a bit over the 4th of July.  Look for something here Monday and Thursday next week.  The rest of the time we'll break in only if there's a need to do so. 

Smidiríní

Supreme Court Healthcare Ruling Could Come About 10 AM Today.  (Reuters)I think this will be a market moving event no matter what comes down.  For the record I think Supremes will through out the individual mandate and keep the rest.  We'll see.

JP Morgan Trading Loss May Reach 9 Billion (New York Times)

Political Polling  (Real Clear Politics)  Electoral College:  President Obama 221 electoral votes.  Mitt Romney 181.  Undecided 136.  President Obama however leads in most of those swing states that are undecided right now.

A Checklist For Investors  (The Big Picture)

Earnings Estimates

From Ed Yardeni's blog:

"The consensus bottoms-up forecasts for 2012 and 2013 are down to $105.07 and $117.94. Forward earnings, which is the time-weighted average of the current and coming year estimates, has recently flattened out around $111.26. That’s actually quite bullish since forward earnings tends to be a very good leading indicator of actual S&P 500 operating earnings over the coming year. If so, then actual earnings should add up to about $110 from now through mid-2013."

Using these consensus estimates that Yardeni lists above the S&P 500 currently trades with respective PEs of 12.61 and 11.23 and respective earnings yields of 7.9% and 8.9%.

When using historically averaged PEs between 14 and 16 nets the following respective valuations.  

2012 earnings of 105.07

a 14 PE equals an S&P 500 price target of 1,471

a 15 PE equals an S&P 500 price target of 1,576

a 16 PE equals an S&P 500 price target of 1,681

2013 earnings of 117.94

a 14 PE equals an S&P 500 price target of 1,651

a 15 PE equals an S&P 500 price target of 1,769

a 16 PE equals an S&P 500 price target of 1,887

We are using 103.75 for 2012 and a range of 110-112 for 2013.  I think that consensus 2013 number is way too high!

Yardeni: S&P500 Forward Earnings

*Long ETFs related to the S&P 500 in client and personal accounts.

Earnings Season

Bloomberg TV  was out with a very interesting statistic this morning which I heard while out for a jog.  I tried to find it on the website when I was done but so far have had no luck doing so.  Anyway it was something along these lines.  Being labeled by Bloomberg the "sweet spot" they stated that something like 67% % of stock gains came during earnings season.  Stocks on average gained something like over 3% during this period and declined a bit over 1% the rest of the quarter.  They used the illustration of a bat as reference, putting that 67% number in blue.  Again I don't have a link for this, I'm sure they sited somebody else's work, I'm assuming the data is accurate and my numbers may be off slightly, but the gist of the story remains correct.  Here are a couple of my take aways on this.

Wall Street is data driven and the only real point of clarity anymore is earnings season so it makes sense that stocks will react this way especially to positive numbers.

Companies today are well versed in the art of under promising and over delivering.  This can really come to the front when they report especially if they manage an "upside surprise" by a pretty hefty number.

The 2nd quarter will be in the books as of Friday.  It will be interesting to see how stocks react particularly as analysts have been busy lowering their numbers for many companies going into the quarter.  I can see this going a couple of ways.  First a weak earnings season could further pressure stocks.  However stocks have already had a pretty hefty decline this quarter so it is possible that much of this is already discounted in stocks.

The other side of the trade is that its possible that a better than expected season places a floor under stocks and possibly lead to a summer rally.  Forward guidance is going to be very important this quarter as investors will want to see what effects a slowing US economy and how the EU situation is impacting  companies' bottom lines.

Again I apologize that I do not have a link to this story or the author they sited.  Please forward both to me if you come across it and I will put it up here on the blog.

Premarks: A Few Quick Random Thoughts

*Risk on- Risk off is back in vogue.  How else to explain the string of +1%/-1% trading days we seen in the past month or so.

* Europe:  The European Union is now in the political Kabuki theatre stage.  Everything it seems will depend on how Germany {and to a lesser extent the other Northern nations of the EU} decide on how to ultimately deal with the Southern countries and Ireland.  The problem of course is the average German has no interest in bailing out his Southern counterpart who he doesn't seem to like very much .  To highlight that feeling I'm reminded of the statement a German said to me on the streets of Munich last winter when he found out that the next rung of my trip was to Italy, "You know Chris, God put the Alps where he did for a reason."   The only way German Chancellor Angela Merkel can get any sort of bailout done is to take the EU to the brink it seems so expect more chaos and volatility from across the pond until this whole mess gets sorted out.

*Of course the one event that nobody seems to ever entertain is what happens of the Germans just can't get there and instead of bailing out everybody else they just leave the EU.  I know that's supposed to raise the price of a new reconstituted Deutschmark to levels that would severely crimp their exports but nations sometimes do illogical things.

*Here at home our elections are going to be decided this summer.  That's because political data shows that most people's opinions on the economy are set between now and Labor Day in a presidential election year.  The economy is showing signs of slowing and that cannot be good for the President's chances on reelection.  We'll look here at the state polls this summer in Wisconsin, Ohio and Iowa for clues as to how he's doing.  

*Health care:  If the Supreme Court throws out all or part of the Health care Bill, it will be a huge loss for the President.  He will have a tough time rebutting the argument that he spent too much time on a bill ruled unconstitutional {all or part} and not enough time working on the economy.  I think stocks go up if part or all of the bill is thrown out. For the record I think the Supreme Court will throw out the individual mandates portion of the law and keep everything else. 

Markets are still cheap.  Estimates are now coming down closer to my 103.75 number for the S&P 500.  We'll see if we get some stability here now into month's end and the 4th of July holiday.

*Long ETFs related to the S&P 500 in client and personal accounts.

an tSionna {06.25.12}

*Long ETFs related to the S&P 500 in client and personal accounts.

Smidiríní

Pension Time Bomb  {New York Post} "Nationwide, the actual size of unfunded public pension liabilities is four times larger than the $900-plus billion that officials are ’fessing up to. That’s right, the bank sees a$3.9 trillionhole; to plugthat,states and cities will need large tax hikes, massive budget cuts or both. Plus, public-sector unions will have to accept smaller retirement packages, and later retirement ages, to keep the pension systems going."

Replace the Income Tax With a Consumption Tax {The American} 

On the Microsoft Tablet  {Wired}

The Marketing of Wall Street {The Reformed Broker-go to the site and read the whole exempt from the book-Wall Street Unzipped} "I was on the phone with a prospective client yesterday who had called us after visiting with their local Fidelity branch.  They walked in for a consultation and the "advisor" there shoved a variable annuity brochure into their laps within 30 minutes.  'You go to a firm like Fidelity because you figure, hey, it's Fidelity,' the guy says to me.  'How could anything go wrong, they're everywhere!'  

Finally I'm really looking forward to seeing the movie Brave.  The animation looks stunning!!! {Oh and the Scottish and Irish sides of me like the plot as well!}

Valuation {06.19.12}

The S&P 500 last night closed at 1334.78.  At that price level the index trades at 12.86 times my $103.75 earnings estimate and carries a 7.78% earnings yield.  The index also carries a dividend yield of just a bit over 2%.  This yield by the way beats something like have the dividends of all the individual stocks in the index.  

Using the consensus estimate of Wall Street which is around $105, the index trades 12.71 times the estimate and a dividend yield of nearly 7.9%.

Per Bloomberg, the US 2 year treasury yields 0.28% and the US 10 year yields 1.60%.  The German 10 year yields 1.51% and for comparisons sake the Greek 10 year yields 25.23%.

If the market would accord US stocks a historic multiple range between 14-16 times my 2012 estimate  then the S&P 500 would be worth between 1452 and 1660.  Its earnings yield would still be historically high at just a bit over 7% at the low end and 6.25% at the high end of my estimated range.  Stocks on valuation alone are undervalued by 8-24%

If the market would accord US stocks a historic multiple range between 14-16 times using that $105 Wall Street consensus estimate then the S&P 500 would be worth between 1470 and 1680.  Its earnings yield would still be historically high at just a bit under 7% at the low end and 6.125% at the high end of my estimated range.  Stocks on valuation alone on consensus numbers are undervalued by 10-26%

The dividend yield at those levels would still be competitive with the current yield of the US 10 year treasury.

Stocks either discount all the fear that's out there regarding the global economy, discount a potentially disruptive event to world economic growth such as a war or natural disaster or act as if the US has the potential to enter a recession in the next 6-12 months.  The current economic data does not support a recessionary view although it is indicative of a slow growth economy.

The potential for these gains is based on earnings for the end of 2012.  That is a bit over six months out.  Taking those estimates out until mid-year 2013 shows a much significantly higher valuation potential for the markets.

NEVER IN MY INVESTMENT CAREER {now spanning over a quarter of a century} HAVE I SEEN STOCK VALUATIONS THIS CHEAP BASED ON HISTORIC PE LEVELS  AND ABSENT A RECESSION OR A SIGNIFICANT ECONOMIC CONTRACTION!!!!  Either we are going to have an event that provides a significant hit to growth or stocks are presenting a buying opportunity of a generation for longer term investors.

*Long ETFs related to the S&P 500 in client and personal accounts. 

an tSionna {06.18.12}'

So Greece votes to stay in the EU and the markets here basically start the week doing nothing.  No we go to the next big event.  May be the G20 meetings in Mexico this week but probably will be a renewed focus on US corporate earnings which will start coming in right after the 4th of July.....

4th of July....Hmmm.  That's just about the time it wouldn't surprise me to see the markets top out from this most recent rally.  We're oversold in the short term and shorter intermediate term {more on that at a future point}.  Our intermediate and longer term indicators are still oversold so that gives us some room to move higher in the next few weeks.

*Long ETFs related to the S&P 500 in client and personal accounts.


On a separate note, I'm still going through the integration stages of the new office setup so bear with the posting this week.  

Gaming Greece

While I've been suffering with computer integration issues {which BTW included a nasty virus on an older machine of mine that I didn't know I had} the world continues to turn.  Yesterday saw a sail through the wind rally that basically took stocks up about 1.5% points in the last 90 minutes of the day.  This happened as word leaked around the globe that central banks were standing ready to inject massive amounts of liquidity into the system.

Let's translate that into basic English.  "We central bankers stand ready to do what we gotta do if Greece ditches the system on Sunday." 

When I think about what's happened in the past month or so, it's likely that investors have already discounted much of the fallout if Greece actually votes to pull out on Sunday.  In that case I think we could see an initial move lower, followed by stabilization and then some sort of reflex rally.  My crystal ball doesn't get me much farther than that if this is what comes to pass.  Equally if Greece votes to stay in the Euro I think markets could rally stabilize and then give some of those gains back as everybody sits back and says "and now what?".

The scenario that is beginning to concern me and which we briefly discussed two posts below this one is that the initial results out of Greece Sunday are positive and markets rally.  Then it becomes apparent over the course of the next 3-4 weeks that irrespective of what the Greek government says or does, they just can't get there.  Markets top out in the 1370-1400 range between now and say early/mid-July and then begin one final descent as movements in Europe come finally to a fruition.  That is the scenario I'm beginning to favor more and more.  It also likely means that based on what I know today, if we get that rally into mid-summer I will become much more defensive minded in client portfolios. 

Now of course nobody knows what will happen between now and then and it is possible that some sort of "grand bargain" will come to the fore that changes much of my thinking.  However I just can't get away from a few things:

-Bailing out Greece {or for that matter Italy, Portugal & Spain} remains wildly unpopular in Germany and the other Nordic countries that would have to foot the bill.  A Greek government that basically reneges on the current austerity bill and wants to come to the back to the negotiation table may be too much for these countries to handle.

-It might be easier to make an example out of Greece and use the money that would have been poured into the country to backstop the others.

-Fundamentally many of the nations in the European Union are comprised of peoples who don't like their neighbors very much.

So we'll see what happens over the weekends. In any event next week is likely to be an interesting one!

What We're Working On!

This is what we're working on!!!  Yes that's a Mac in the middle.  We're entering the era of cloud based applications.  More soon......Hopefully!

Computer Problems

We are in the process of installing new systems at "Global HQ"and have been doing so since last Friday.  These are ultimately going to mean great things for us but right now we're going through some installation pains.  Posting will be limited until we get these up in running.  Up in running will depend on us getting these machines to talk to each other.

Here is a quick market update.  In my  opinion almost nothing has changed regarding our markets except if it is possible investor sentiment has worsened.  Markets seem to lurch from one big economic number or benchmark regarding Europe to the next.  Markets are slaves to what is going on in Europe and so we go up one day and then give all those gains back the next.  Having said that stock valuations are cheap and that seems to be putting a floor under stocks right now.  It strikes me that we are either going to have one huge rally of longer duration than a few days or markets are beginning to discount a recession.  

Problem with the recession scenario {at least as it applies to the US} is that the economic data simply doesn't support that at this point.  I'm beginning to think the scenario where markets rally into early July then stall out and have one final wash out over Europe going into the statistically weak August-early October period is the most likely script going into the summer.

If markets follow this pattern then I think the S&P could rally into a zone of 1370-1400 over the next 5-7 weeks which would be a rally of 3-5%.  Note that I said that markets COULD rally to this point, not that they are going to do so!!!!

Of course this thought process could be completely off base and we will adjust accordingly as facts on the ground tell us what to do.  In particular, as we've recently indicated, we have the defensive pages of the playbook ready in case things begin to head south from here.

*Long ETFs related to the S&P 500 in client and personal accounts. 

an tSionna {06.12.12}

Please note that the probabilities we suggest in the chart above about how high stocks could potentially rise are probabilities only.  No guarantee that this will occur!  Our work is a computational analysis of probability and there are many things that could happen that could derail these valuations from happening. 

*Long ETFs related to the S&P 500 in client and personal accounts.

Publishing Reminder

Just a reminder that given the requirements of my real job and summer hours here in the office, we will not be publishing again until the beginning of the week.  Of course we'll break in if conditions warrant. 

Come back on Monday!!!

Update on Market Positioning

We are NET MARKET POSITIVE on all three of the time frames we measure.  We last updated this positioning when we moved our short term views higher back on May 24, 2012.  The market as measured by the S&P 500 is down about 2.6% since that time.  You can go here  for a definition of what these terms mean. Please remember that these positioning reflect what we are doing for our clients and are not meant to be any sort of market timing mechanism.

We have put quite a bit of client money to work this week.  The article we published earlier today details the underlying reasoning for our doing this.  These metrics indicate to us as we consult both our playbook and game plan that current price levels are a lower risk environment for those looking out 6-12 months.  

Stocks have opened up sharply higher today.  I do not know if this rally will hold or if it is a tease before we head further south.  I do think that at a minimum prices are due for some sort of snap back even if we end up lower at some point later this summer.  We will have the defensive pages of the playbook at the ready just in case we are wrong with our analysis or this is just a reflex rally in a bear market.  But given the levels we've reached and the valuation discounts we see, stocks are attractive relative to almost any other investment out there and we have acted accordingly.

Our interests have primarily been in yield and in certain other major index ETFs where we believe we are currently under invested.

*Long ETFs related to the S&P 500 in client and personal accounts.

Thoughts on Fundamentals/ Sentiment/ Money Flows/ Valuation

We discussed yesterday some of the negatives driving stocks. With markets now having given up most of their gains for the year, it is likely that much of this negative news has been discounted in current prices. Today in a sort of quick note/thought process are my thoughts on where on where we currently stand.

Fundamentals:

Bonds yields at historic lows are permitting a massive restructuring of both corporate and individual balance sheets. As a result American corporations are in pretty good shape. Individuals also have the opportunity to take advantage of this. I'm in the early stages of refinancing my mortgage and rates are low enough that it looks like I might be able to save around $800 a month. Folks that's real money and it's being magnified all around the country.

Corporate America is very lean and with the above mentioned strong balance sheets places US companies in a great position to build their business either by reinvestment, restructuring or mergers.  Strong balance sheets also equate to the potential for strong dividend growth which we have also seen this year.

US economy is growing, albeit at a slower rate than most of us would like to see.  GDP growth will likely be around 2% this year.   

Prices of oil and other commodities has come down in the past several months.  This is a net positive for consumers. 

Disappointing economic data, especially that regarding jobs means Obama administration likely is hitting reelection panic button. Political data shows that voters perception about the economy is usually set in the summer months leading up to the election.  Bad economic news could be fatal to the President's chances.  Indeed Intrade Markets now are giving him only about a 54% probability of winning in November.  This likely means the focus  between now and the fall will be on the economy and jobs.  Look for a more conciliatory stance out of the Administration regarding taxes and the budget.  Also look for QE3.  There is now higher potential look for sysynchronized monetary policty between China, Japan, Europe and in the U.S.

Great things are happening under the hood regarding innovation and development in business.  See for example what Spacex  is doing.  Look at the developments in energy, electric cars, green technology, healthcare and technology.  

Sentiment:

AAII investor sentiment survey approaches numbers that typically marks some sort of a bottom in a current cycle.  

Investors have pulled money from U.S. equity funds every month since April 2011, the longest streak of outflows since Washington-based trade group Investment Company Institute began tracking the data in 1984. They took out $7.2 billion during the five days ended May 23 after $178 billion of withdrawals in the previous 12 months, ICI data show.  {Source:  Bloomberg.com}

Media and television coverage of economic news is currently skewed very negative.

Money Flows:

All our indicators are showing oversold readings of the type that is usually indicative of some sort of bounce in prices.

The percentage of stocks trading above their 200 day moving average is approaching 40% which is a level from which stocks have the potential to rally.

The percentage of stocks trading above their 50 day moving average is around 20% and is already at a level from which stocks typically rally. 

Valuation: 

{Note some of this Data comes from this excellent article from Bloomberg:  S*P 500 Valuation Slips Below 11. }

The S&P 500 is trading at 12.9 times profits in the last 12 months, compared with 15.9 times in February 2011, data compiled by Bloomberg show.

Earnings in the S&P 500 are forecast to reach a record $105.81 a share in 2012 and climb 13 percent in 2013, according to analyst estimates compiled by Bloomberg. Companies in the index have boosted profits for more than two years.  {Note:  My own internal S&P 500 estimate uses 103.75.}

Based on last night's S&P 500 close of 1286, the index trades: 

12.40 times my 2012 estimate and an 8% earnings yield. 

12.16 times current consensus 2012 estimates and an 8.2% earnings yield.

Stocks still have the potential to end 2012 in a range between 1450-1550 with 1475 my midrange target for year end 2012.  That is a nearly 15% price return potential from these levels.

*Long ETFs related to the S&P 500 in client and personal accounts.

Here's A Shock!

Nearly Half of Germans Want Greece to Leave Euro. {Chicago Tribune}

Really?  Hard to believe the average German who has to work till he's 62 doesn't want to subsidize the average Greek who before this crisis could retire around age 50 and had the job of hair stylist classified as a hazardous occupation.  I mean, who'd have thought!

A Publishing Note.

Here's the publishing schedule the rest of the week.  I'm working on a longer piece that will be published either tomorrow or Thursday regarding the state of the markets.  Given a few things over at my real job of managing money for clients, that is likely the last post for the week.  Look back Monday for more observations.

What's Troubling Investors {Three Things}

From the economist.com: 

A Big Hairball of Risk {Excerpt with my highlights}

"......What.....preys on the minds of financial and business-world risk takers is not a single threat but a multitude of them, regurgitated in one big hairball of risk. And all are about policy.

1. The easiest to understand is China. The fall in credit, property prices and industrial activity are the result of a deliberate government effort to corral inflation and rebalance from investment towards consumption. The downsides of China's tiáo kòng  (”macro control”) are well known.....But the upside is that when the taps are opened, the effect is almost immediate......Investors have learned to put enormous faith in tiáo kòng: as quickly as the authorities put the brakes on, they can release them.  “Weak data to prompt effective support,” is how Barclays headlined a typical report Friday. 

There are two problems with this optimistic take. The first is about will: authorities may be more willing to tolerate a slowdown and less enthusiastic about stimulus of the kind used in 2008 since it would delay rebalancing away from investment.  The second is about ability......the policy that guarantees 8% growth with no booms or busts has yet to be invented. If China suffers a hard landing this year, it will only prove its leaders are human. Odds of a good outcome: 80%.

2. The most insoluble is Europe. It has faithfully followed Robert Feldman’s CRIC cycle: crisis, response, improvement, complacency. The European Central Bank bought the euro zone valuable time with its long-term loans to banks earlier this year; that time has been wasted. ....To fireproof the euro zone, most everyone outside Germany thinks euro members should share responsibility for each other’s banks (via common deposit insurance) and sovereign debt (via Eurobonds). Germany has refused to countenance this, and presumably won’t until Greece is in the process of leaving the euro. The optimists are convinced that Germany will bend if that’s the price of saving the euro. What they may not appreciate is that there is no single “Germany” to nod his head when some line is crossed; the country is a mosaic of competing power bases who may not coalesce around a solution in time to save the region. Odds of a good outcome: 60%.

3. The most perplexing is America. The fiscal cliff at the end of the year is a problem in itself, and symptom of a larger problem. If all the tax increases and spending cuts programmed to take effect at year-end do so, GDP will suffer a 5% hit. Neither party wants this to happen. The larger problem this symptomises is the parties' inability to agree on any sort of stable fiscal policy that would take the place of the cliff. If they could, there wouldn't be a cliff in the first place. Optimists love to quote Winston Churchill’s line about Americans always doing the right thing after exhausting all other possibilities. Yet Congress and the administration have precious little time and incentive to do the right thing......Odds of a good outcome: 70%.

The key takeaway is that while a good outcome is the likeliest scenario for each, the combined probability of all three turning out well is only one-third. And by the way, that’s without throwing in all sorts of other risks......Is it any wonder that the marginal investor or business would prefer to hold Treasury bonds or sit on cash? And that sort of disengagement can make economic pessimism self-fulfilling.

My comment.  My guess is that the easiest one of these problems to game is the US.  Last Friday's economic reports and the ensuing negative coverage over the weekend probably put the White House in panic mode regarding the economy.  It would not surprise me to see the Obama Administration to become much more conciliatory regarding budgets and taxes for next year sometime this summer.  

Earnings Yield

Long time readers of this blog know that I use the Earnings Yield  on the S&P 500 as one of my primary valuation tools.  The earnings yield is simply the inverse of the market's Price to Earnings ratio.  The chart at right from Reuters shows how skewed the earnings yield has become since 2008. The earnings yield is in gold.  You can double click on the chart to make it larger. 

We are now at historically high levels for this metric.  The long term average for earnings yield is about 6%.  Based on Friday's close stocks would need to advance over 30% for this number to trade back in line with its historic average!  

Link:  Reuters Earnings Yield/ America's Jobs Crisis.

*Long ETFs related to the S&P 500 in client and personal accounts.

an tSionna {06.04.12}

*Long ETFs related to the S&P 500 in client and personal accounts.

60th Lubilaeum Regina Elizabeth II

"I have behind me not only the splendid traditions and the annals of more than a thousand years but the living strength and majesty of the Commonwealth and Empire; of societies old and new; of lands and races different in history and origins but all, by God's Will, united in spirit and in aim."- Queen Elizabeth II

Vivat Regina!

Smidiríní: Yields

Ten year US Treasury is now yielding 1.53%.  Tht's not the lowest.  Switzerland now yields 0.48% on their 10 year.  German Bonds are at 1.16%.

Something I never thought I would see!

Break In: Jobs!

We're doing a break in from our summer hours policy today to report on the jobs numbers.  They were simply awful!  While nothing in this report indicates that we are on the cusp of a recession, the data is indicative of an economy that has slowed down in the 2nd quarter.   Here from Chart of the day.com/ is their latest free chart posting on jobs and what they've said today:

"The latest jobs report came out today with the Labor Department reporting that nonfarm payrolls (jobs) increased by 69,000 in May. Today's chart {above} provides some insight into the current US job market by comparing the percentage change in total nonfarm payrolls (blue line) since the declared end of the Great Recession to the performance of the private sector job market (gold line) and government sector job market (red line) during the same period. As today's chart illustrates, the overall job market (blue line) continues to trend higher albeit at a pace that has slowed over the past several months. Today's chart also illustrates that the government job market has been trending significantly lower since the first half of 2009 (with the exception of temporary census hiring in mid-2010). This decline is due to federal, state and local governments attempting to realign their budgets following an unexpected decline in revenues as a result of the historic plunge in housing prices (i.e. property taxes, capital gains, etc.) and nonfarm payrolls (i.e. income taxes, payroll taxes, etc.)."

One thing these employment numbers are going to do is put the White House into panic mode.  Voter's opinions about the economy will harden over the summer and their perspective on its future will largely determine how they will vote.  This is especially true in swing states like Ohio, Wisconsin, Indiana, and Iowa. 

Will think about what all this means over the weekend and will try to put it into perspective next week.

Link:  Chart of the Day: Jobs.

Link: