NEW YORK (TheStreet) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog, anticipating which ETFs will be in play next.
Here are three of his blogs from the past week.
Reacting to Jobs
Published 6/04/2010 10:35 a.m. EDT
Today's jobs data and the reaction of the trading public are disappointing but not a surprise. In my blog yesterday, "Hold Tight and Hang On," I mentioned that market movement would hinge on economic data and that investors would likely see a lot of volatility in the short term. Over the course of the week, I have written a number of blogs talking about how to use ETFs to reduce portfolio volatility ("Use ETFs to Avoid Volatility" and "Coping With Volatility").European currency drama, oil spill worries and post-traumatic market crash syndrome have all got traders in an emotional state. With the gloomy headlines we've been seeing this week, it's no surprise that investors are reacting to the jobs number with such gusto. I encourage you to take a step back and focus on the bigger picture. Jobs data are just one piece of the puzzle, a piece that hasn't been instrumental in the strides that the U.S. market has taken since the 2008 meltdown. The recovery so far has been led by companies that got lean fast and increased productivity. That's another positive piece of news that came out yesterday -- productivity is up. Rather than getting bullish or defensive today -- we have a weekend ahead where things could change fast -- I'd recommend that you use today to find balance. Overweight in equities? Pick up longer-term defensive positions such as the physically-backed SPDR Gold Shares (GLD) or iShares COMEX Gold Trust (IAU). As I mentioned earlier, U.S. inflation will become a bigger theme later this month (as the Fed meeting approaches), so picking up shares of iShares Barclays TIPS Bond (TIP) now could help to give you a leg up on inflation fears down the road. The economy has been improving, but people aren't hiring. How can you reconcile these two factors? Consider the fact that small business, which accounts for much of the job market, has been hit by a wave of new health care costs. The cost of hiring people and employing them keeps growing.
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