The employment situation once again dashed hopes for an imminent rate cut and continuation of aggressive easing policy by the Federal Reserve. There is no question that the report was relatively lackluster, but given the expectations, it just didn't deliver! Manufacturing is the weakest sector of the economy evidenced by factory orders and the bleeding factory payroll figures.

The Fed's Beige Book of anecdotal evidence across the Federal Reserve districts showed that economic activity was softening a bit with sluggish retail sales and a slight reduction in labor demand. But the report also was not anemic enough to suggest the economy was rapidly falling apart.

Right now, it looks as though the economy is headed for a soft landing, not the crash that market players and Fed officials were worried about in early January. But market sentiment has become more negative because current data doesn't support aggressive easing moves through the summer. Isn't it funny how the lack of a recession can make market players so depressed?