Remaining Focused On The Trend

US non-farm payrolls disappointed only economists, and some are keen to get new additional stimulus, and, very likely, for right reasons. But stock market (at least initially) follows the script of "headline watching" Societe Generale today:

Remaining focused on the trend is the key and recognizing changes in trend is most important for anticipating policy changes.

But the headline trend remains for new bid in cyclical stock prices (at least initially), and wholesale inventories provided megatons of hope, as did ECRI' s US WLI, by climbing to 1.5 year high, as the sight through the fog is key.

Interestingly, but US Dollar gave up versus Euro, despite the fact, that Euro zone unemployment rate moved above 10% for the first time since the formation of union.

Rounding up on the global view, the look at December 2009 survey of JPMorgan' s Global All-Industry PMI reveal more insights. JPMorgan concluded in the summary on Wednesday:

Both J.P. Morgan’s global services and manufacturing PMIs advanced in December, but their combined gain fell short of the level consistent with our global GDP growth forecast. As reported Monday, our global manufacturing PMI output index rose 1.4 pts to 58.2, a very elevated level that points to continued boom conditions in the manufacturing sector.

Today’s new information concerns activity in the global service sector. Our services PMI output index posted an even larger gain of 1.8 pts, but from a much lower base, so that it ended 2009 at a level of just 52.1. The shortfall in the service sector was widespread. Services PMIs in the US, the Euro area, Japan, China, India and Russia all lie below their 2006-07 averages. The gaps are especially large in the US and Japan, whereas they are more modest in the EM. The US gap is especially significant, since the US accounts for about 40% of the global services PMI and about 1/3 of the global all-industry PMI.

Taken alone, this unbalanced picture of booming manufacturing and sluggish services poses downside risk to our global GDP growth estimates of 3.7% in 4Q09 and 3.4% in 1Q10. ...

Click on charts to enlarge, courtesy of JPMorgan.

In the meantime commodities in major currencies are breaking out to the upside. Asset reflators win big! Of course, those who believe that economy is led by corporate sector will conclude that this is a bullish sign. Click on chart to enlarge, courtesy of Nordea Markets.

I remain focused and cool, as it is quite cold outside ...