I like how every talking head on CNBC is trying to flip this employment report into a "perfect" situation for stocks since it must mean there is absolutely no inflation on the horizon and the Fed will be out of the picture (as if the soaring prices of commodities and metals had anything to do with growth in USA). Considering the plight of the dollar, this could be a dangerous situation. If we had true signs of domestic growth, the Fed could have cited a stronger economy as the superficial reason for tightening, thereby halting the dollar's fall at the same time by raising rates. A lack of supporting signs of growth effectively leaves "tightening as panic" as the only savior for the dollar. Does this make sense?
The talking head is right: the Fed will not raise rates until after the November 2004 election. Their bias is not to, and given reports like the one you cite, why should they? Lower rates mean less competition for stocks...where would you put your dollar assets...in a money market fund?
I thought 2 months ago when we had much better than expected employment figures that the bears had run out of arguments against the new bull market. Now we get crappy numbers, the same people are saying it's bullish? Talk about curve-fitting, hehe. That's the fed's problem, they just can't raise rates now. And that's trouble for the dollar . . .