Big Day on Wall Street

The gains for equities today in spite of the less than encouraging news about private sector employment is perhaps a positive sign, or perhaps and indication that investors are ready to place bets given that it is the first day of a new month. This type of professional investing behavior is akin to a part-time gambler who has just received a new paycheck and has money to spend. Most fund managers are measured on a month-to-month basis so when the 1st comes some are inclined to place big bets.

However, there is another force at work; the power of the US economy and the strength of the American political system. Though it has not been written anywhere that I am aware, it is possible that investors are betting that the naturally buoyant forces of relatively free markets, combined with a big does of stimulus, loose monetary policy, and ultra low interest rates will eventually propel the US economy forward.

This is an optimistic view in the face of contracting employment growth and the ongoing deleveraging of the American consumer.