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JACKSON HOLE, Wyo. -- How will the bond respond to the March


numbers to be released two days hence?

It will depend to a large extent on what stocks do.

We can look at the bond's reaction as a two-tugger: A policy-implication pull and an equity-response stroke.

And the latter's the one that's movin the goop.

Freaky Friday

Forget the payroll number. Why? (a) Census tells us that it had as many as 148k more temporary workers oot and aboot in March than it did in February. (b) Weather during the March survey week (the one ended the 18th) was way nicer than it usually is. (c) Five weeks, as opposed to the normal four, elapsed between the February and March survey periods (the economists at

Salomon Smith Barney

point out that this has happened only twice since 1940; the gubmint bean counters will certainly try to adjust adequately for this, but they will also probably fail).

These things could produce a payroll print north of 400k. Even if they do, though, keep in mind that a huge number will have overstated the true strength of the job market last month in the same way that a tiny

one understated it the month before that. Not to worry: Just know that labor markets are still very much python-tight, and leave things at that.

Concentrate more on the unemployment rate and on average hourly earnings. The market's looking for the former to clock in at 4.0% (down from 4.1% in February) and for earnings to print 0.3% (same as in February; also the 12-month moving average).

Just right.

If they do print like that? Such figures are already baked into the bond cake. Will equities step up on those numbers? Your narrator has no idea (shares are not a focus of this column). If they do, though, the bond stands to weaken as a result (perhaps to 97.00 on the

June contract, and a dip worth buying).

Too hot.

What if they print bigger? The Salomon economists (as well as your pea-brain correspondent) reckon there's a better-than-even chance that the unemployment rate prints with a three-handle. Also, the Goldman economists are looking for earnings to print 0.4%; Solly's looking for a tenth more than that; and earlier this morning there appeared on

Market News

a story that has policymakers "looking toward Friday's employment report with some trepidation, fearing it may show some acceleration in wage increases in March."

A bigger-than-expected wage number and a smaller-than-expected jobless rate might initially slap bonds. What happens from there depends on the sissy market. Will stocks get smacked hard too? Your narrator has no idea (shares are not a focus of this column). If they do, look for the bond to pop higher (perhaps to a 100.00-100.16 range).

Too cold.

A way-kind print's the only remaining option.

Will stocks shoot higher on nice numbers? Your narrator has no idea (shares are not a focus of this column). If they do, look for the bond to sag (again, to something like 97.00).



Don't be. All you gotta do is figure out what stocks are gonna do on Friday.

And surely there's someone around here who can help you with that.

Side Dish

(a) Original.

Intelligent. Understandable. Contrarian. Predictive. Numbers-based. History-rich. Dead right.

Everything about

this piece rocks.

(b) What do I do on no-column days like yesterday?

Tinker with the spreadsheets. Enter comprehensive GDP revisions back to 1959 for the second time in five months owing to what the gubmint bean counters call "several corrections" that were "incorporated" with the release of final fourth-quarter data last Thursday. Read. Dig up obscure things to point you guys toward. Take long lunches with the girls. Lie in the sun.

And send my friends all kinds of stupid emails. Like the one below.

the thinking that the recent nasdaq setback will give the fed pause ignores a few important facts. first? the index is still fundamentally bullish. down twenty-something percent from its high? gimme a break. call me when theres some real capitulation. second? it aint the nasdaq the feds looking at anyway: its the wilshire (don't think icing. think cake). that's the feds preferred measure of wealth -- and its currently doing (something in double digits) percent year-on-year. third? the wealth thing is much more an accumulative beast than it is a here-and-now one. think a wilshire down (something in the single digits) percent from its highs is going to put a serious dent in the huge store of wealth thats been building up over the past five years? think again. itll take even year-on-year readings that persist over the course of (say) twelve months to begin to chew into that kind of fat. fourth? the stocks-as-main-determinant-of-fed-policy view is always too narrow. housing has just as much (and perhaps more) to say about wealth. (know why housings shown no significant slowdown in the wake of a marked increase in mortgage rates? maybe its partly because house prices are rising so quickly that mortgages are still relatively cheap.) then think wages. and the current-account deficit. and final demand. these are the things the feds been hammering home. what kid of a stock setback is going to prevent any of those concerns from becoming outright problems? only one marked and long-lasting enough to first put a serious squash on jobs and income.

is that what weve got here? cmon.

the fed is doubtless happy on a day like today. but is this enough to keep it from tightening further? nope.

Cmon gang. Quit it with the reduced-chance-of-tightening thing. Even the people who are usually dead wrong about

policy got this one kinda right.

(c) Today's poll concerns the following passage.

Not since Mickey Rourke sat across a table from a moustached Kim Basinger and mused about the beauty of a heart-shaped butt has there been this much focus on a bottom.

You okay with that?

Yup. Colorful. Clever. Illustrative. Fitting.

Absolutely not. Unacceptable. Disgusting. Abusive.