This morning's weekly jobless claims, probably the best 'real time' indicator, have spiked over 480K two weeks in a row. There was a lot of noise in this figure in July as typical auto plant shutdowns for retooling did not happen this summer, but not we are past that point. Put another way, the Kool Aid crowd is running out of excuses. Remember, we need to be below 425,000 to have any reasonable chance at decent job growth... we have NEVER hit that level once during the (cough) recovery.
Remember this entry/chart from June [Jun 17, 2010: Weekly Jobless Claims as Stock Market Indicator] on the correlation between the direction of weekly jobless claims and the direction of the S&P 500.
After the data this morning, gold spiked ... which I believe is the market saying, the due date for Ben's next round of Quantitative Easing has been moved up.
I'll be buying some index hedges on the open as we clearly will be below S&P 1086, and use that as the pivot point. I'll be looking to sell down some long exposure as well, although happily we locked down some gains the past week when bad news = good news because it meant more free money. Now we are back to bad news = ugh.
Ironically, this increase in job losses is good for corporate profits (less humans = more profits) but some days the macro environment will supersede the reality that slashing and burning American workers is a boon to S&P 500 profits.