I dutifully got up early (central time zone) to hear Friday morning’s disappointing employment report. Then I remembered the stock markets were closed for Good Friday. After a lifetime of watching the economy and the stock market reaction to it, I must admit I don’t know what to expect Monday morning. I suppose the safest bet is on down. If you gave me odds, I might bet on down in the morning and back up (partially) in the afternoon. But, as they say, I could be wrong.
This long week-end might make a fascinating topic for classroom discussion, whether led by efficient market theorists or behavioral economists or cab drivers. Do you remember the old song lyrics: “I was looking back to see if you were looking back . . .”? A chain of reasoning is a little like spelling Mississippi. You never know where to stop.
Simple answers without too much analysis are probably best. The job numbers were bad; so, the market will tank. On the other hand, surely no one expected the proverbial straight line improvement month after month, and we all knew the employment numbers were getting ahead of the underlying GDP numbers. If you didn’t know that, you should have because Gentle Ben told us. So, maybe the three-day cooling-off period will allow cooler heads to prevail.