Unfortunate Confluence

The Labor Department usually publishes the employment report on the first Friday of every month and the timing of Good Friday depends on the cycles of the moon. This year the two events will occur on the same day. Since 1885, except in 1898, 1906, and 1907, the New York Stock Exchange has closed for the holiday.

As of today, the markets have continued to slide and it appears that nothing is going to shake the ill feelings on Wall Street this week. The Dow is currently down 3.67 points or less than a tenth of a percent at 13,071.08.  The S&P 500 fell 1.4 percent in the past two days.

This may be a result of the Tuesday release of the Federal Reserve’s minutes from its last meeting and an uneasy Spanish bond auction. The rise in Spanish bond yields renewed concerns about the Euro Zone’s financial health. Traders are reluctant to make any significant moves ahead of the Fed’s release of the unemployment rate tomorrow.

Last month, the U.S. economy added 227,000 jobs and the unemployment rate was 8.3 percent. Even though the economy is expected to add at least 200,000 jobs for the fourth month in a row, the unemployment rate is expected to remain at 8.3 percent. Because of Good Friday holiday tomorrow, any market reaction to the employment report will be seen on Monday.

“The stock markets can’t tell the government when to release the data, and the government can’t mandate that stock markets be open,” says Michael James, managing director of equity trading at Wedbush. “It’s an unfortunate confluence of dates.”

The last time the monthly employment report coincided with Good Friday was 2010. U.S. stock-index futures, yields on 10-year Treasuries and the dollar rose on April 2, 2010, after the report showed employers added the most jobs in three years. The S&P 500 future rose 0.3 percent, while Treasuries fell, driving the yield on 10-year notes up to 3.94 percent. The jobs report and Good Friday also coincided in 2007, 1999, and 1996, according to data compiled by Bloomberg.

All of the big nations, except Russia’s equity market, will be shut down tomorrow. While bourses in China and Japan will be open tomorrow, they will have closed by the time the report is published.

It is important to remember that even though every piece of news might move the markets up and down for one day, it does not mean much for long-term investors who are looking for long-term value creation. 

- Harlyn Croland