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Jobs Report: A Tale of Two Trades

"What we've thought would happen continues to happen that in terms of the economy, growth is slow and steady," said Tim Holland, portfolio manager at Aston/TAMRO Funds. "The sort of slow healing of the economy continues, and that should be really good news for the consumer, and that should also hopefully continue to tie back to support for housing even with slightly higher interest rates."

If the improving economic data is a true recovery, then the Fed's tapering shouldn't tank the economy. Bernanke and the Fed have said as much. They will only taper if they believe the economy can withstand such a shift.

So when the market sells off on good economic data, it suggests that market participants are betting that the Fed will scale back monetary stimulus and that the economy isn't improving as much as the data reports.

But if we start to see more trading sessions like Friday's -- a gap up on strong economic information, despite concerns that it will fuel the Fed to scale back on the juice -- we could see the start of a shift back to pre-crisis market fundamentals.

For July 5, it appears the market accepted the June payrolls at face value.

-- Written by Joe Deaux in New York.

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