Market Talk

Madeleine and I talk about this morning’s jobs report, and the mixed bag it came with, the G20 meeting this weekend, and we take a look at what various asset classes are telling us (or trying to tell us.)

US stocks rise for a second day on an afternoon rally, after jobs report leaves investors flat in the morning.

DJIA rises 97 (1%) to 9441; index eases 1.1% on the week. S&P 500 gains 13 (1.3%) to 1016, Nasdaq Comp jumps 36 (1.8%) to 2019. DJ Transports rises 2%; tops year high from January.

Job report is a mixed bag; payrolls fell by the fewest number since August 2008, and continues an improving trend. But the unemployment rate jumped to 9.7%, a 26-year high. That schism keeps stocks flat in the morning. But investors pile in in the afternoon.

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Dow Jones’ James Altucher gives Simon Constable five reasons not to stockpile guns, and buy stocks.

When do ya think we can stop hosing it down?

The August jobs data were certainly a mixed bag, but this much is certain: the economy’s not in crisis mode anymore, but returning to growth and prosperity won’t be easy.

Nonfarm payrolls fell 216,000, less than the 233,000 decline economists expected, according to a Dow Jones Newswires survey. But the unemployment rate ticked up to 9.7% – its highest level in 26 years.

The good news is reports of more than 500,000 monthly job losses are likely over. But just because job losses are diminishing doesn’t mean the economy’s on the mend, FusionIQ CEO Barry Ritholtz writes at The Big Picture.

“While we are no longer in full blown panic mode, we are still showing serious job losses,” he notes.

Unfortunately, don’t expect job growth anytime soon as the economy could be headed for an “ongoing weak labor situation” of several more months of 100,000-300,000 job losses, he says. “And significant job creation of 300,000 per month or greater could be a long time from now.”

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I'm feeling a little downwardly revised.

This morning’s jobs report had something in it for everybody, but maybe a little more for some than others.

The headline drop in payrolls, by 213,000, was less than the expected 233,000, and a good chunk better than July’s 276,000. But, that 276,000 is itself revised from the originally reported 247,000 – and that should give some people pause.

Also, the unemployment rate jumped to 9.7% from 9.4%, worse than expected. And the broadest measure of unemployment leapt to 16.8% – meaning almost one in every five Americans (if you’re rounding, that is) is either unemployed or underemployed.

Stock futures reflected the uneven nature of the report. Higher heading into the 8:30 a.m. release, they initially fell, then rose, then slipped a bit, although the remained higher overall.

“Everybody had to figure out which number they wanted to trade on,” said Frank Lesh, futures analyst and broker at Futurepath Trading.

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September’s cast something of a pall on the equities rally, just by virtue of it being September, but investors may get a hopeful sign this morning when the all-important August jobs report come out at 8:30 a.m.

The nation shed 247,000 jobs in July, even as the unemployment rate ticked down to 9.4%. Expectations are the nation shed 233,000 jobs in August, a slight improvement in a labor force of 150M some odd, but an improvement nonetheless.

If August does show improvement, it will go a long way to convincing even the bears the recession may be ending. Of course, if it doesn’t, well, you know how that script gets written, too, don’t you?

S&P futures up 4.20, DJ futures up 33. Ten-year down, yield at 3.37%.  Gold at $991/ounce and crude’s at $68.49.