Week in Review 9/7/07 – Jobs Fall Through the Floor

All week CNBC hyped Friday’s job numbers as the most important economic report of the year.  A weak number (~50K) would provide the ammunition for Fed Chairman Ben Bernanke to appease the market and cut interest rates.  A strong number (~120K) and he would continue singing his economy is fine tune. 

No one expected a negative print.  The non-farm payrolls showed a decline of 4000 jobs.  This was the first time the economy shed jobs since August 2003.  The market fell through the floor as the conversation moved from managing a financial crisis to concerns of a recession. 

For the week, DOW, S&P 500 and NASDAQ were all down -1.8%, -1.4% and -1.2% respectively.  There is nothing quite like a 240 point down day on a Friday.  It gives everyone the entire weekend to stew about it.

Interestingly money flowed into commodities this week.  The thinking is that lower interest rates will tank the dollar.  Thus, assets that are denominated in dollars (like gold, silver, oil) will rise.  All asset classes have been moving together for so long this was good to see.  We will need a safe-haven if the US goes into a recession. 

For the week, Gold was up $27 or 4%.  Silver and Oil followed suit up 4.3% and 3.5% respectively. Copper took it on the chin losing -4.3%.  Eventually, copper will follow the other commodities as a US recession won’t reduce its demand by the emerging markets.

The TTaMG portfolios were a mixed bag.

  • Fab 4      1.9%
  • BBO        0.2% 
  • BRIC     -2.0% 
  • Real Money     -1.7%
  • TBS       -3.1%
  • MDs Ag Play  0.4% 

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