ICYMI: What to Watch Ahead of Tomorrow’s Jobs Report

If we see a positive Jobs Report tomorrow, we think Gold and the 10-year Treasury get smoked.”

–Hedgeye CEO Keith McCullough

Get ready. It’s Jobs Day tomorrow.

And we think most investors are missing a critical opportunity ahead of Friday’s labor market check-up.

The Federal government’s Non-Farm Payroll report, as the jobs report is called, will give us an update on the number of jobs added for the month of December. Since February 2015, the year-over-year growth (or rate of change) in jobs has been slowing, from that peak of 2.58% to the November reading of 1.58% (see the brief video above for more).

It’s one of the few U.S. economic indicators that’s still slowing.

But this could change. Especially as we head deeper into 2017 and jobs growth “compares” get easier. This means last year’s absolute jobs number, over which tomorrow’s December reading will be compared to calculate year-over-year growth, is a lot lower. So, essentially, labor market growth isn’t as hard to come by, particularly heading into the first and second quarter of 2017.

WHAT TO SELL

Sell Gold (GLD) and Long-Term Treasury Bonds (TLT) ahead of the report. These are classic slower economic growth macro exposures. In other words, they could get crushed tomorrow if tomorrow’s jobs report is better than expected.