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More signs of gradual improvement



Today's economic data provided yet more evidence that the economy continues to gradually improve. More importantly, given that Treasury yields remain extremely low, there is no evidence at all that the economy is deteriorating. The market continues to expect terrible news, but the news keeps coming in better than expected. Thus, the equity market continues to rally even though the economy struggles with a decidedly sub-par recovery.


Announced corporate layoffs are close to record lows. Corporate America is not panicking.


The ADP jobs number was stronger than expected (201K vs. 140K) and once again it points to a stronger than expected payroll jobs number tomorrow (currently expected to be only 140K).


Unemployment claims remain low. This chart shows the raw, nonseasonally adjusted data. Nothing bad at all about this that I can see.


The ISM service sector report was also somewhat better than expectations. It's definitely not showing growth to be excited about, but neither is it deteriorating. When the market expects deterioration and the economy instead grows by only a modest amount, that is bullish.

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