Friday, October 05, 2018

Market Alert - Pre-Market

Futures vs FV: SP +1.74; DJ +16.52; NASDAQ -9.58

Futures moved in a circle before the jobs report to the announcement, then to the post-report action. After a spike higher on the news to a drop to a session low after that, futures have returned to where they were before the report. SP500, DJ30 flat, NASDAQ lagging again.

Non-Farm Payrolls: 134K vs 184K exp vs 270K prior (from 201K). July 155K from 147K.

Obviously a hurricane influenced report.

3 month avg: 190K. 12 mo avg: 211K

Unemployment: 3.7% vs 3.8% vs 3.9%. More people coming back in and looking for jobs, but it was a bad month given the hurricane.

Wages: 0.3% vs 0.3% vs 0.4% August. year/year: 2.8% vs 2.9% August

Participation: 62.7% vs 62.7% August.

People unemployed due to economic reasons: +263K to 7.5% vs 7.4% prior

Workweek: 34.5 vs 34.5 exp vs 34.5 August. No increase in hours worked so you will not get massive spikes in wages. Why, if workers are in short supply, are hours worked not increasing? Could this be a holdover from the ACA still causing people to keep hours worked down?

Jobs areas?
Leisure and Hospitality: -17K. The LARGEST gains in the entire Obama admin were in this category. Low pay, entry level jobs were the staple of the US jobs market and a reason for the economic lethargy. No more.

Retail: -20K

Professional and Business: _54K

Healthcare: +26K

Manufacturing: +18K

Bonds: 3.208% vs 3.189%. Bonds were 3.2084 before the jobs report, yields spiked to 3.229 on the news, settled back down to the pre-report level.

EUR/USD: 1.1525 vs 1.1511

USD/JPY: 113.80 vs 113.96

Oil: 74.62, +0.29

Gold: 1208.00, +6.40

Okay, the jobs report is history, but as the back and forth in the futures indicates, the market is not quite sure what to make of it. That will play out today but no doubt the market continues working through its near term test/pullback/correction of some sort and techs, while off the lows, are still a focus as are the smaller caps.

The recovery in futures toward the bell is encouraging -- shows a bid remains in the market, ready to move in when the opportunities show up. We will see how NVDA, AMZN, CRM, SQ opportunities show up, and if so we will issue alerts to pick up a few shares/options.

Oh, Columbus Day Monday, and while banks and the like will be closed, the market will be open.

Jon Johnson, Chief Market Strategist

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