Today's jobs number could be game changer. US jobs fell by only 11,000. Analysts had expected 130,000.
Traders reacted instantly. The S & P initially rose 1.3% to 1,117.20,but has turned lower.
The dollar rose against the euro, up .8%. The euro traded at $1.49, down against the dollar. Against the yen, the dollar rose 1.7% to Y89.80. On a trade weighted basis the dollar traded at 75.29.
With hope of a of a stronger economy, oil initially rose 1.3% to $77.48 per barrel, but followed commodities lower. Gold, which had trading higher on a weak dollar, fell 1.5% to $1,188.20 per ounce. At noon EDT, gold was down $49.00 per ounce.
Bonds, which often move opposite to stocks, fell with the yield rising 14 basis points.
Coming back to today's job numbers, traders have had a free ride trading gold higher and the dollar lower. It could be time to evaluate your trading strategy. If the dollar turns upward here, gold could pull back sharply. Investors could regain their belief that the US economy is on the mend. This would be a strong incentive to buy dollars again.
On the flip side, a stronger economy could signal an end to stimulus and higher interest rates.
As always, watch the dollar. The state of a country's economy is reflected in its currency.
Do you believe that our economy will rebound next year?
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Reader Comments (Page 1 of 1)
12-04-2009 @ 3:09PM
william lindblad said...
To the question - NO.
The jobs report sounds great but is also what one reads into a statistic. The good part of the report is a creation called a temporary job. This does not mean part time, these are full time but also as literal as the tag implies. Part of this temporary picture is holiday retail and another is government stimulus. The big question is what percentages are being generated by the above and that question can only be answered by time.
The number one question at Obama's job summit was bank credit. So far, no amount of cajoling on the part of government has proven successful, and if this hurdle remains a recovery will be difficult. There is also the problem of commercial real estate to be dealt with. This is a well known and expected gremlin and I doubt that it will have much effect on markets, however this is another case of something that cannot be allowed to fail for fear of the vacuum that it would create. Beside that, there still remains a great deal of potential defaults in the residential market.
If these problems, along with job creation, can be overcome than the answer is Yes.
What do you think are the chances?
12-04-2009 @ 5:35PM
Alexander said...
As the old adage states, "Figures don't lie, but liars can figure" holds true.
Without a doubt, it will be discovered at a later date, perhaps sooner than later that the figures given regarding the employment, or unemployment rate in the United States is akin to the "science" of Man Made Global Warming, a blatant fraud!!
In less than one generation, the United States went from being the World's largest lending nation to being the World's biggest borrower; the greatest transfer of wealth in all of Human History has taken place.
Obama has surrounded himself with people of his own ilk, creatures who can juggle figures around to conjure up lies disguised as truth, and in the process 'win' a Nobel Peace Prize to boot.
When the biggest export of any country is jobs, how can it result in anything but an ever climbing unemployment rate? Surely even idiots should be able to figure that one out.
Today, practically nothing is manufactured in the United States. First the jobs went to Japan, then Taiwan, followed by China and India.
Not only is the United States broke, it is now standing with a beggar's bowl mooching the spare change from Japan, China, and even the once impoverished India.
In a way it's amusing to see gold being traded for worthless fiat notes, that so-called "money" is being churned out as fast as the printing presses will run.
The day is drawing near when the prophesy will be fulfilled, "A measure of wheat for a measure of oil".
12-04-2009 @ 11:33PM
Peter Van Schaik said...
The odds of a recovery from this recession are actually pretty good. Sure, there are still some problems lurking around the corner but we will try to avoid facing those inconvenient truths in the next recession as we did in this one. Meanwhile inventories are low, interests rates are lower, there is some pent up demand, and a fair amount of new purchasing power has been thrown into the mix. That bodes well for the next year. However, sooner or later the Fed will have to raise rates: it won't take a lot to pull the rug out from under this recovery. In the meantime, brighter days are ahead. http://jpetervanschaik.ghooglepages.com