The market was closed on Friday for the holiday and that kept the indexes in the black for the week. The SPY was up 0.34%, VTI +0.49%, VT +0.71% and AGG +0.41% (dividend adjusted). However, a weak payroll report came out Friday morning and that pushed the e-mini futures down 0.62% on the week. So the regular markets were essentially saved by the Good Friday holiday but will most likely start Monday lower.

Non-farm payrolls increased by only 126,000. That was almost half of the expected increase of 245,000. So it was a huge miss and payroll numbers were also revised down from the previous two months. The unemployment rate remained steady at 5.5%. Economic reports have been to the weaker side of late, but many consider this a result of an extremely cold winter and the impact of the port slowdown in California. Still, there now has to be some consideration that there is something to the poor numbers and the strong growth we saw to close 2014 was the aberration. The slower economy can be measured by the the 10-year treasury bond yield which has dropped to 1.81% from about 2.13% at the close of the year.

Earnings season begins this week and companies are running into three headwinds. First, the fall in energy prices will have a big impact on that sector and earnings will be hit, bringing down the overall market earnings. Second, the strong US dollar will negatively impact firms that do international business, that means much of the SP500. And third, the bad weather and the port slowdown in the United States will impact many domestic businesses. Overall earnings are expected to fall 3-4% this quarter. The SPY is only off 2.62% from its March 2 high of 211.99. So we have earnings going one way (down) and the market going the other way (up). That cannot go on forever. We will see if the economy can pick up from here.