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Markets react to Fed news, ADP jobs report

Josh Brown Apr 4, 2012

Jeremy Hobson: Yahoo said this morning it is cutting 2,000 jobs in a major shakeup of the 17-year-old company, that is have a hard time competing with Google and Facebook. Meanwhile, the payroll processing company ADP said the U.S. private sector added 209,000 jobs last month.

And that is where we’ll start with Josh Brown of Fusion Analytics who’s with us live as always from New York. Good morning, Josh.

Josh Brown: Hey, how’s it going Jeremy?

Hobson: Going well — so Yahoo is cutting but overall, looks like the private sector is adding jobs. We’re of course, waiting for Friday’s big employment report from the government. How do you square this with the high gas prices and everything else that’s going on?

Brown: So, apparently, high gas prices have not yet impacted hiring, which is good. This is the fourth ADP report in a row with more than 200,000 jobs created in the private sector, so it’s hard to find a negative here. I think what’s most interesting is if you look at the breakdown, large companies with more than 500 employees, only added 22,000 jobs. The bulk of this 209,000 total number came from small businesses, who added 100,000 new workers.

Hobson: And Josh, let me ask you about something else that’s obviously driving the markets this morning: the Fed, we learned yesterday is probably not going to do anymore quantitative easing — this big bond-buying stimulus they’ve been up to. What does that mean for the economy?

Brown: You know, it’s hard to draw a direct link between quantitative easing and the economy. It’s much easier to draw a link between quantitative easing programs and the stock market. And really, if you look at the history of the market of the last three years, it throws a temper-tantrum; we get a big sell-off; and then all of a sudden, the Fed is back with its latest program.

So I think we should look at it somewhat as an announcement of confidence, that they’re basically saying, “We can take our foot off the gas because employment trends are improving.” It remains to be seen whether or not they’ll still be able to say the same thing in three months.

Hobson: Josh Brown of Fusion Analytics, thanks as always.

Brown: Thank you.

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