Business News

Biding time on Wall Street

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by Peter Switzer

Not surprisingly, Wall Street marked time overnight waiting for the job numbers tonight. And share buyer enthusiasm wasn’t helped by less-than-flash retail numbers and a rise in initial jobless claims.

That said, the Dow only lost 5.45 points and the S&P 500 slipped just over one point. I call it flat but it makes me think that a bad jobs number will unleash seller tension but on the flipside a better than expected result will reinforce the rally.

The retail result wasn’t that surprising given the softer economic data and it does suggest that it might be too early to get too positive about this unemployment show and tell tonight.

The long-term

Talking to Chris Cuffe — one of Australia’s best fund managers, from Third Link Investment Managers — last night on my Sky News Business Channel program, he warned unemployment may stay high despite an improving economy and a better stock market.

He doesn’t know when the market will take off but as a long-term investor he knows it will.

He has exposed himself to emerging markets and our trade figures this week show why you would do that. He has also positioned himself with real estate investment trusts (REITS), which shows he believes the worst is behind us.

Finally, he has a small holding of cash and is heavily locked into more risk assets.

Set up for rally

Whatever happens with this employment report, unless it’s a disaster, I reckon we’re setting ourselves up for a significant rally, which will be better than the one we have already had.

This opinion has come from the better US company reporting season and the increasing weight of smart guys and gals that I watch and listen to.

Let’s hope I’m on the money, but the important thing is to not get too despondent if these damn job numbers don’t deliver tonight.

For advice you can trust, contact Switzer Financial Services.

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Published on: Friday, August 06, 2010