Friends
Following the better than expected ADP private sector jobs number reported yesterday, the release of the non-farm payroll number this morning was a letdown. Only 80,000 new jobs were created in June which was less than the consensus estimate and way short of being able to move the needle on unemployment. Remember, we need over 300,000 new jobs created each month to put a real dent in unemployment, and it has been a long time since we’ve seen numbers like that. But wait, bad news is good news, right? The horrible ISM manufacturing number combined with this less than stellar jobs number surely must mean more quantitative easing from the Fed. The interpretation by the markets today was that this number may not be bad enough to get the Fed to move. Great, now we are stuck in a place where the news certainly isn’t good, but isn’t bad enough to warrant more medicine.
Just like last month, stocks fell immediately on the jobs report and spent the remainder of the day in decisively negative territory. For the day, the Dow Jones Industrial Average was down 124 points to close at 12,772. The S&P 500 was down almost 13 points to finish the week at 1354 (closing under its 100 day moving average, but above its 50 day moving average). Gold got hammered with the precious metal falling $25 to trade near $1584, and oil was back down $3 to trade at $84.21 per barrel WTI.
Earning season begins Monday after the close, as Alcoa is the first Dow component to report. Again, we are concerned that this earnings season could be a bit more rocky than ones we have seen lately. It is to be determined whether this is factored into current prices or not. We’ll keep you informed as to how things unfold next week.
Have a great weekend everyone
