The market was surprised by a much worse-than-expected Jobs Report this morning. The number was the biggest miss in over 20 years, but the big question is how much was the miss due to a lack of applicants rather than a lack of job openings. There has been much anecdotal evidence that supplementary unemployment is preventing some people from applying for a job that will actually pay less than they receive in unemployment.
Bonds initially spiked on the news due to the perception of economic weakness, but iShares 20+ Year Treasury Bond ETF (TLT) has reversed down as the news has been digested. These numbers do help to relieve some concerns about inflationary pressures, but there are still many signs of robust growth as the economy continues to open.
The most significant market reaction to the jobs report was a sudden reversal of the rotation I have been yammering about for weeks. The big-cap value names reversed down, and the speculative small-caps and high-beta growth names jumped. The ARK Innovation ETF (ARKK) recouped all of yesterday's losses and was up 3%
I'm not convinced that all the stocks that have been pounded this week have bottomed, but I am doing a little nibbling in some odds and ends like Mogo (MOGO) , Elys Game (ELYS) , and a few others. Many of these small-cap names have been struggling to find support and turn up but with limited success so far. Next week a large number of the small-caps will report, and that should offer some interesting trading.
The action yesterday felt like it was capitulation selling in places, but there has to be some upside follow-through to confirm that. So far, so good but stay skeptical.