Morning Note: Jobs Report Not a Needle-Mover

According to the Bureau of Labor Statistics, the US economy created 261k new jobs (vs 195k expected) in October… The unemployment rate rose .2% to 3.7%… Leisure/hospitality up by 35k (surprisingly low), manufacturing by 42k (surprisingly high)… Average hourly earnings were up .4% month-on-month…


Of course, given how the market’s trading of late, the issue for traders is how today’s report influences the Fed… As I type, equity futures, after going from green to flat on the news, have quickly turned back around and are now trading nicely in the green.

I.e., today’s employment report while (save for the rising unemployment rate) better (worse for stock market bulls) than expected, it, at least at the moment, doesn’t move any needles for the market… So, if this premarket is indeed telling, stocks are back to trading on strong seasonality and on-balance decent technicals… And, plus, the latest news (still rumors) out of China (prospects for easing their covid restrictions) is no small deal when it comes to global equity and commodity markets…
I have to tell you, what, frankly, shocks me in terms of market reaction, is this morning’s move in the dollar, it’s down a whopping 1.2% as I type! 

I should also add that an abundance of anecdotal data of late points to a potentially marked slowdown in job creation in the months to come… I.e., multiple firms have announced layoffs and hiring freezes over the past several days, while surveys are beginning to hint of a weakening employment picture (the October Services ISM employment component dipped into contraction territory, while the Manufacturing ISM came in right on the expansion/contraction dividing line)… 

On deck is our end-of-week stock market snapshot and economic update. 


Asian equities rallied overnight, with 13 of the 16 markets we track closing lower.

Same for Europe so far this morning, with 18 of the 19 bourses we follow trading up as I type.

US stocks are green to start the session: Dow up 352 points (1.10%), SP500 up 1.27%, SP500 Equal Weight up 1.49%, Nasdaq 100 up 1.23%, Nasdaq Comp up 1.12%, Russell 2000 up 1.36%.

The VIX sits at 24.72, down 2.29%.

Oil futures are up 4.56%, gold’s up 2.13%, silver’s up 4.65%, copper futures are up 6.37% and the ag complex (DBA) is up 1.11%.

The 10-year treasury is down (yield up) and the dollar is down 1.08%

Among our 35 core positions (excluding options hedges, cash and short-term bond ETF), 32 — led by MP Materials, base metals miners, base metals futures, sliver and Sweden equities — are in the green so far this morning. The 3 losers are intermediate-term treasuries, long-term treasuries and cyber security stocks.

“A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases.

Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.”

–Jesse Livermore


Have a great day!
Marty

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