With the latest "Biggest Number Ever" set to hit the tape on Friday when we get June Non-Farm Payrolls, investors got something of a grim preview in the form of shockingly bad Institute of Supply Management (ISM) data on Monday morning. It was the culmination of a wave of lousy data that spread around the world; the ISM came in at 49, well below the estimates of 52.3. Any number under 50 suggests an economic contraction, putting recession fears back on the table.
According to Scott Bleier of CreateCapital.com the bad data is just getting started; and that's a good thing. "Gross Domestic Product is probably going to be negative in the second quarter," Bleier says, before adding, "world wide."
This isn't necessarily the end of the world for investors or market opportunists. Bleier notes the the last two years have seen markets that sold off into weak summer data only to rally. In fact, just last month stocks cratered with the release of the same jobs data coming this Friday. The selling only set up "a fabulous rally in the face of horrible numbers and a technical breakdown."
For those with some patience Bleier sees market skittishness as a chance to get long. A sell-off catalyzed by Friday's jobs data should be looked at as an opportunity. "It might be time to cherry pick individual stocks," he says. Not just for a trade, either; Bleier thinks Buy and Hold may actually be making a comeback after spending the last decade in the doghouse.
We'll have him back to defend the buy and hold assertion at another time as it deserves it's own segment. In the here and now the market has to deal with Non Farm Payrolls. The official estimate is 100,000 compared to last month's 69,000. Not too many people expect 100,000 but anything below 75,000 would likely be met with selling. Bleier says that's where you make your move. Get long as stocks go lower, suggests Bleier adding, "don't chase them; let's them come to you."
How are you playing today's data and how are you positioning yourself ahead of Friday's jobs report? Let us know on our Facebook page.