U.S. Employment Data Sends Markets Reeling
The only surprise I can register over today’s Non-Farm Payroll report from the U.S. is that it was allowed to be released in its current form at all. The comedy value of much of U.S. economic data has reached a point where it rivals Monty Python re-runs in terms of hilarity due to shock and embarrassment. So, for the BLS to put out such a bad number — itself is very likely only slightly less fictitious than normal — must mean that the situation no longer concealable by a curtain of seasonal adjustments and weather conditions. The S&P 500 is off 13.35 right now at 1541.15 which will be a bearish weekly close to start Q2 for U.S. equities. Further weakness below 1500 next week would be a huge reversal signal.
The report’s immediate effect was to send Gold, the Euro and Bonds up and Equities down. The Yen dropped to offset the loss of the trade-weighted (minus China, of course) U.S. Dollar Index and massage the truth. I’m sure Japanese PM Abe is on Ben Bernanke’s Christmas card list. What should be noted, however, is how strong the move in Gold was today. After popping up past $1570 per ounce the usual suspects came in to try and cap it, first below $1566 and then below $1572. Both of these attempts failed and Gold closed at its high for the day on the COMEX. After the close, the rally in Gold continued — $1578.35 as of this writing. This ensured that this wouldn’t been the worst weekly close for 2013 and in doing so re-affirms and strengthens the massive support between $1525 and $1550.
Silver put in a Pyrrhic victory in closing above $27 and the Euro regained the $1.30 level. Next week the Euro will need to follow through with a close above $1.3045 while Gold will need to first close above this week’s high of $1602.30 and then $1620.
Tom Luongo
Tom is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.
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