Climbing a wall of worry

As we prepare for Friday’s US Department of Labor’s release of the May non-farm payrolls report complete with the unemployment rate,  I have rarely seen such confusion about how good or not so good it will be. Everyone is so negative because of the soft patch the economy has hit, more on that later.   I will begin by saying that it will show a gain but the range of gains is estimated from sub 100k to almost 300k of jobs created, I think it will be a high number (200k plus because the birth/death adjustment).  The weekly jobless number which comes out every Thursday morning at 6:30 a.m. and has been spiking slightly up for the last month after 1 ½ years of relatively consistent drops in the weekly number bodes poorly for this Friday’s number.  This bump up in weekly jobless numbers may be an aberration and I hope it is but I am concerned.  Concerned because as this weekly number has been moving up, the regional Fed manufacturing numbers have been coming in rather poorly, the widely anticipated S&P Case-Shiller home price index for March dropped 3.6% today vs. the expected -3.4%.  This has some people speculating that the already moribund real estate market is double dipping, I don’t know if is, as this is dated material and April and May show something different.  What I do know is  that the manufacturing data while still showing expansion have been dropping, today’s consumer confidence number was weaker than expected because of higher gas prices, the housing market is weak regardless what the April and May numbers will show months from now.  The Euro is imploding over the PIIGS sovereign debt default issues, China is trying to slow it’s economy again, the US’s omnipresent debt  ceiling and budget impasse, and a  limp economy that just can’t pick up steam.  This speaks nothing of the concluding with the Fed’s QE2 which is coming to a fitful end right about now.  Have I depressed you yet, don’t worry the silver lining is coming.   In case you have been on vacation on a media free island, the stock market has been selling off for 2 weeks now because of these reasons.  It is hard to find good economic news these days, but the global expansion is not dead as central banks around the world who have had extremely easy money policies for over 2 years, and corporations have learned to do more with less, the world is awash in oil and gas and I believe the prices will come down now.  This all leads to better economic times over the next year.  The stock market is smart, trust me on this and it will bottom from this soft patch and move up before the individual investor realizes it.  If we get a bad number on Friday, the stock market should sell off, if we get a good number, I think the market will rally and then fail as investors are buying too much into the bad economic numbers of late, remember a rallying market climbs a wall of worry.