Market Summary

It was a jobs Friday, with a choppy premarket session following the release of the Employment Situation for June. We had an initial uptick as it wasn’t as bad as some had feared, however the market fell as it was still worse than estimates with all signs pointing to stagnation, and possible deflation throughout the end of 2010. By the closing bell, the Dow Jones Industrial average fell 46.05, or 0.5 percent, to 9,686.48, The Standard & Poor’s 500 index lost 4.79, or 0.5 percent, to 1,022.58, while the Nasdaq composite index declined 9.57, or 0.5 percent to 2,091.79. Major averages did come off of their 1 plus percent losses in midday trading.

It was another troubling week for Wall Street as investors have been pricing in a double dip and the technicals are all going against the broader market. On the week, the blue chips dropped 4.5 percent. The S&P 500 index lost 5 percent, while the Nasdaq dropped 5.9 percent. The Russell dropped 7.2 percent for the week.

There is so much uncertainty facing the country and we need some clarity. The president needs to revise his budget for fiscal year 2011 as we can not have ANY tax increases and we need to make that clear now.

Crude oil fell 81 cents to $72.14 per barrel on the NYMEX, while bond prices rose, sending yields down. There is no crisis of confidence in the greenback, and I dont see the bond market having a fit with more government stimulus to fix the structural problems within the economy.

Economic Rundown

Payroll jobs in June fell back 125,000 after advancing a revised census full 433,000 in May and after a 313,000 jump in April. The June decrease matched the market forecast for a 125,000 decline. Private nonfarm employment increased 83,000, following a 33,000 rise in May. The latest figure fell short of analysts’ projection for a 105,000 advance in private payrolls. It is all about private sector jobs, and Q2 lagged Q1 in hiring.

The private sector gain was led by a 91,000 boost in private service-providing jobs. This included professional & business services, up 46,000, and leisure & hospitality, up 37,000. The goods-producing sector lost a net 8,000 payrolls with construction down 22,000. Manufacturing posted a 9,000 gain while mining & logging advanced 5,000. Manufacturing has risen three months in a row.

The big weakness, of course, was a 208,000 drop in government jobs after a 400,000 jump in May. The decline included the loss of 225,000 temporary employees working on Census 2010.

There other signs of a slowing in the labor market according to closely watched metrics. Growth in average hourly earnings fell by 0.1 percent following a 0.2 percent boost in May. The average workweek for all workers edged down to 34.1 hours compared to 34.2 hours in May. The market forecast was for 34.2 hours. The usually trend is an increase in the workweek and wages, followed by additional temp staffers before full time employed workers. We didn’t get any positives from this as wages and workweek both fell.

The good news at face value in the June report was that the unemployment rate to 9.5 percent in June from 9.7 percent in May. However, the decrease was due to a sharp drop in the labor force. Economists had expected it to rise to 9.8 percent.

Market Summary

Wall Street saw major declines on Friday, over 3 percent for the major averages after an extremely disappointing jobs report. In addition, the euro fell below $1.20 to a new for year low against the greenback. The Dow Jones Industrial Average fell 324.06 points, or 3.2%, to 9,931.22. It was the lowest finish for the average since February. The S&P 500 fell 37.95 points, or 3.4%, to 1,064.88, while the Nasdaq Composite declined 83.86 points, or 3.6%, to 2,219.17. Major averages are down 12.5 percent from the April highs. Financials fell 4 percent, while retail saw its biggest decline of the year. Monday should be extremely interesting on the street, we have the tumbling euro and a Dow 30 that is once again under 10K. We have been playing chicken with that mark for a few months, going from 10.5K to under 10 and back again. it will only take one more shoe to drop for the major averages to slide further.

For the week, the blue chips lost 2 percent, the S&P fell 2.3 percent, and the tech heavy Nasdaq lost 1.7 percent. After the terrible month of May, this wasn’t what traders were looking for to start June. Chat has been amazing and the profits continue to flow.

Economic Rundown

Are the Only Jobs We Can Create Are Census Workers?!

All of the economic data that has come out in the past, in my opinion, has been wiped out by this figure. Everything revolves around a strong labor market. It is possible that May was an outlier and we will resume strong job growth as we head into the summer, however I am not holding my breath.

The Labor Department reporting total payrolls including temporary census workers climbed by 431,000 in May and the unemployment rate fell to 9.7 percent from 9.9 percent. Economists were looking for well north of 500K at the headline number. The headline number surged from the 290,000 in April. All well and dandy right? Wrong! 411K of the jobs created were temporary census workers. Private nonfarm employment increased only 41,000, following a 218,000 boost in April.That is extremely anemic and we will not see 3 percent GDP growth going forward with job numbers like that.

If you look at the report by industry, manufacturing was up 29,000, temporary help services rose 31,000, and mining increased 10,000. On the downside, construction continued to struggle, losing 35,6000 and financial activities down 12,000.

On a positive note, wage inflation picked up with a 0.3 percent rise in May, following a 0.1 percent advance the month before. The average workweek for all workers edged up to 34.2 hours from 34.1 hours in April. These are key indicators to future hiring, but overall the report will linger with us until the first Friday of July.

What an exciting way to round out the week on the street. Hands over fist profits in chat , and the most watched figure in the American economy!

Morning Outlook

Stocks late day rally yesterday looks to continue as futures point higher in the premarket. Eyes around the globe are focused on the jobs number here in the U.S., which will release the February numbers in the premarket. Dow Jones industrial average futures are up 28, or 0.3 percent, to 10,459. Standard & Poor’s 500 index futures rose 4.00, or 0.4 percent, to 1,126.30, while Nasdaq 100 index futures gained 3.25, or 0.2 percent, to 1,863.00. It looks like the economy has cover for this month, with the snow causing a lot of variation in the data, so a bad number has a reason, and a good number is, well, good for the strength of the economy as we head into the spring.

Currencies and Commodities

The greenback is making its way lower in the premarket ahead of the jobs number, putting upward pressure on commodity prices. Looks for the dollar to rally on better than expected data. The dollar rose 0.4044% at 89.38 yen in the currency market. The euro depreciated 0.0144% to $1.3582 while the pound gained 0.1111% to $1.5049. Gold rose $2.90 to $1136 an ounce, while silver climbed 0.84% at $17.32. Crude for April delivery climbed 46 cents to $80.67 per barrel on the NYMEX; a 0.57% advance

Economic Calendar

8:30 AM
Employment Situation: The employment situation is a set of labor market indicators. The unemployment rate measures the number of unemployed as a percentage of the labor force. Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation’s business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls. Analysts expect 50,000 jobs to have been cut in February, while the unemployment rate rises from 9.7% to 9.8%.

In other leading indicators for future hiring, the average hourly wages are expected to increase by 0.2%, while the workweek is expected to drop from 33.9 to 33.6 hours.

3:00 PM
Consumer Credit: Measures the value of consumer credit outstanding. Changes in consumer credit indicate the state of the consumer’s finances and can forecast their future spending patterns. This will be an interesting figure to see, with over 9% of American homeowners behind on their mortgage payments or in foreclosure, it’s only a matter of time before credit is defaulted upon. The consensus for January is a decline of $4 billion, however the range goes as low as $-10 billion. Credit fell $1.8 billion in December.

Market Summary

After being down triple digits on Friday over concerns about European sovereign debt, the equity markets rebounded sharply into the close. As a result, all three major averages were positive on the day, but still faced a losing week. The blue chips rose 10.05, or 0.1 percent, to 10,012.23. The broader Standard & Poor’s 500 index rose 3.08, or 0.3 percent, to 1,066.19, while the Nasdaq composite index rose 15.69, or 0.7 percent, to 2,141.12.

For the week, the Dow lost 0.5 percent and is down 713 points, or 6.7 percent, since closing at a 15-month high. The S&P lost 0.7 percent, with the Nasdaq dropping 0.3 percent for the week.

Mixed Data on the Employment Front

This morning, the Labor Department said the U.S. economy lost 20,000 jobs in January, falling short of estimates for job growth of around 5,000. December’s number was revised to a decline of 150,000 jobs from the previously reported 85,000.

In a separate household survey which is used to calculate the nation’s unemployment rate, the unemployment rate in January declined 30 basis points to 9.7%, better than the 10.1% the market had expected. The real unemployment rate, which also includes part-time and discouraged workers, also fell to 16.5% in January after rising to 17.3% in December.

Key indicators that we talked about in the morning outlook also improves, as the average workweek grew to 33.3 hours, from 33.2. That indicates employers are bumping up hours for their workers, a step that usually precedes new hiring.Temporary-help also increased for the fourth consecutive month.

These two reports are extremely conflicting, as the government report showed a net loss of 12,000 private sector jobs, and 8,000 government jobs, while the household survey showed an increase in employment of around 540,000. The household survey does a better job in reflecting small business. Are we starting to see the return of small business hiring? One thing is for sure, a staggering number of people have left the workforce until we start seeing job creation, once they reenter, we will see a bump in the unemployment rate.

Market Summary

Wall Street optimism on the jobs front quickly disappeared Friday morning as the Labor Department released December’s Employment Situation. With many analysts hoping for a slight increase in employment, the economy unexpectedly shed 85,000 jobs in the month. We also saw a downward revision in October. November however, was revised upward; turning an 11,000 decline into a 4,000 gain. The advance was the first net job gain in two years. Two years after the start of the Great Recession, we have lost 7.2 million jobs.  The unemployment rate held steady at 10 percent in December, however Americans left the workforce in droves. It will be a sobering number when they reenter the workforce, and we could see unemployment push near 11 percent in 2010.

However, despite the uneven trading and downbeat jobs report, major averages finished positive.The Dow Jones industrial average rose 11.33, or 0.1 percent, to 10,618.19. The Standard & Poor’s 500 index rose 3.29, or 0.3 percent, to 1,144.98, while the Nasdaq composite index rose 17.12, or 0.7 percent, to 2,317.17. The Russell 2000 index of smaller companies rose 2.59, or 0.4 percent, to 644.56.

For the week and the new year, the blue chips rose 190.14, or 1.8 percent. The S&P is up 29.88, or 2.7 percent. The tech heavy Nasdaq is up 48.02, or 2.1 percent. Based on historical trends, 2010 is off to a great start. Of the last 36 times when the S&P 500 index produced gains in the first five days of January, it ended the year higher 31 times, or 86.1 percent of the time

Consumers Continue to Deleverage

Americans borrowed less for a 10th consecutive month in November with total credit and borrowing on credit cards falling by the largest amounts on records going back nearly seven decades.

The Federal Reserve reported that total borrowing dropped by $17.5 billion in November, a much bigger decline than the $5 billion decrease economists had expected. Such a decline in consumer credit emphasizes the upward trend in saving and a decline in consumer spending.

Wall Street finished mixed on Thursday in uneven trading, as traders positioned themselves for Friday’s jobs report. Hitting new 15 month highs, the Dow Jones industrial average rose 33.18, or 0.3 percent, to 10,606.86, while the broader Standard & Poor’s 500 index rose 4.55, or 0.4 percent, to 1,141.69. Tech was the laggard on the day as the Nasdaq composite index slipped 1.04, or 0.1 percent, to 2,300.05

Morning Outlook

Stocks markets around the world are up Friday morning as traders await the premarket government jobs report in the U.S. Many are hoping to see the first monthly job gains in two years. We ave a long way to go to get back where we were a few years ago, but you have to start somewhere! To me, the more important question is will we actually see hiring in the near future rather than just not losing jobs. Worker productivity is at record highs, while employment satisfaction is at record lows.

So far in premarket action, blue chip futures rose 9, or 0.1 percent, to 10,554. Standard & Poor’s 500 index futures rose 0.50, or less than 0.1 percent, to 1,138.00, while Nasdaq 100 index futures rose 2.00, or 0.1 percent, to 1,879.50. This is such a sharp reversal from prior months where we saw negative trading heading into the report. The optimism is definately high, and I hope the report delivers.

Currencies and Commodities

The greenback was mixed against other currencies, while commodities fell on the mercantile exchange. The dollar fell 0.1165% at 93.257 yen in the currency market. The euro depreciated 0.1059% to $1.4293 while the pound rose 0.3937% to $1.5996. Gold lost $11.10 to $1122.60 an ounce, while silver tumbled 1.14% at $18.13. Light, sweet crude for February delivery fell 30 cents to $82.36 per barrel on the NYMEX; a 0.36%.

Economic Calendar

8:30 AM
Employment Situation: The employment situation is a set of labor market indicators. The unemployment rate measures the number of unemployed as a percentage of the labor force. Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation’s business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls. Analysts expect a wash in December, while the unemployment rate rises from 10% to 10.1%. The range goes from a loss of 50,000 jobs in the month to a gain of 40,000.

In addition, lets see if we can get an improvement with other labor market indicators, including average hourly work week, and an increase in average hourly earnings.

3:00 PM
Consumer Credit: Measures the value of consumer credit outstanding. Changes in consumer credit indicate the state of the consumer’s finances and can forecast their future spending patterns. Credit availability is tight in the current environment at the same time as households cut back and deleverage their finances. The consensus for Novvember is a decline of $5 billion, after credit contracted $3.5 billion the prior month. This would be the 10th consecutive monthly contraction.

Market Summary

Wall Street shot higher in the premarket after the Labor Department released its MUCH anticipated July Employment Situation. The better than expected results sent all three major averages sharply higher to close out the first week of August. At the closing bell, the Dow Jones industrial average was up 113.81 points, or 1.23 percent, at 9,370.07, while the Standard & Poor’s 500 Index gained 13.40 points, or 1.34 percent, at 1,010.48. The Nasdaq Composite Index rose 27.09 points, or 1.37 percent, at 2,000.25. The market was led higher by retailers and financials, who received the first profitable quarter by AIG since 2007, a span of 7 quarters.

For the week, the blue chips advanced 2.2 percent, the S&P 500 was up 2.3 percent and the Nasdaq was up 1.1 percent.

Energy Falls as Dollar Gains

The strong jobs report, instilling more confidence in the U.S. economy, sent the dollar upwards, with the dollar index up 0.951 points, or 1.22 percent, at 79.016. September crude settled down $1.01, or 1.4 percent, at $70.93 a barrel on the NYMEX. For the week, September crude was up $1.48, or 2.13 percent; its 4th straight weekly gain.

It is a bit counter intuitive, as one would believe strength in the economy would raise demand for crude. Just goes to show that no one believes these numbers are a precursor to significant growth in economic activity.

Its All but Official, the Worst Recession Since the Depression Ran From December 2007 to August 2009.

A net total of 247,000 jobs were lost last month, the fewest in a year. That compares with 443,000 jobs that disappeared in June. And the unemployment rate for July declined to 9.4 percent from 9.5 percent in June. Analysts had been forecasting that job losses would amount to around 320,000 and that the unemployment rate would tick up to 9.6 percent. The dip in the unemployment rate was the first since April 2008. One of the reasons the rate declined, though, was that hundreds of thousands of people left the labor force.

When the economy is healthy, employers need to add a net total of around 125,000 jobs a month just to keep the unemployment rate stable. And to push the jobless rate down to a more normal 5 percent range, it would take stronger job growth — of at least 200,000 jobs a month. Economists say it might take until 2013 to drive down the unemployment rate to 5 percent.

For July, the real unemployment rate ticked down 20 basis points to 16.3% from June.

Stocks went from moderately negative in the premarket to a straight out decline today as the Labor Department released its Employment Situation for the month of June.

Employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 %; compared to Wall Street estimates of 350,000 job losses with an unemployment rate of 9.6%. Workers also saw weekly wages fall, suggesting Americans will have little appetite to spend and the economy’s road to recovery will be bumpy.

Factoring in the disenfranchised and others who are under employed, the real unemployment rate stands at 16.5 % in June; the highest on records dating to 1994. All told, 14.7 million people were unemployed in June.

Today’s report marked the 18th straight month of job loss in the United States; further weakening consumer spending and the overall attitude of a strong, robust economic recovery in the near term.

We have experienced a Great Recession caused by structural problems in our financial system, and now we will have to endure a normal recession that is dictated by slow growth and high unemployment.

Americans Getting Discouraged

The president tried to reassure the American public that the economy will recover in time, as it took time to have the economy get to the position where are in. He called the report “sobering news” and said it would take “more than a few months” to turn the economy around.

“While there are continuing signs that the recession is slowing, this is not much comfort to Americans who have lost their job,” Obama said in a Rose Garden appearance after meeting energy business leaders. The president faces a growing political problem as more and more Americans feel unsatisfied with the result of their $787 billion in taxes spent on the recovery package.

Where would we be without the trillions of dollars in government intervention?

Wall Street finished mixed on Friday after positive signs from the employment situation competed with rising yields in the bond market. The Dow rose 12.89, or 0.2 %, to 8,763.13. The Standard & Poor’s 500 index fell 2.37, or 0.3 %, to 940.09, and the Nasdaq composite index fell 0.60, or less than 0.1 %, to 1,849.42. Stocks look to keep the momentum heading into the next trading week as the blue chips introduce two new components, replacing the bankrupt GM and Citigroup.

The Dow Jones industrial average closed the week up 262.80, or 3.1 %. The Standard & Poor’s 500 index rose 20.95, or 2.3 %, while the Nasdaq composite index rose 75.09, or 4.2 %.

May Employment Situation

The Labor Department said employers cut 345,000 jobs in May, far less than the 520,000 economists predicted, a hopeful sign for the job market. But the report also showed that the unemployment rate surged to 9.4 % from 8.9 % in April. Estimates ranged from declines of 450,000 to 600,000. Job losses peaked at 741,000 in January, the most since 1949.

Including those who’ve stopped looking for work because they are discouraged by employment prospects and those working only part-time who prefer a full-time job, the real unemployment rate jumped to 16.4 % in May.

Cramer’s Take…Yes he is Still Allowed on the Air

The Lehman Brothers collapse was an eye-opener for everyone, not just the financial sector. When that comet hit, CEOs across the entire economic spectrum adopted a bunker mentality and started to make massive cuts in preparation for a worst-case scenario. The first and most obvious target was the workforce, and companies slashed jobs big and deep.

Thanks to responsive governments the world over, though, a second round of layoffs wasn’t needed. Stimulus programs spared us that trouble, and President Obama’s decision to save General Motors and Chrysler – and as a result, their suppliers – was a big help, too. This prevented the U.S. unemployment rate from reaching Great Depression levels, which were 33%, and instead kept us under 10%. All this despite the near collapse of the entire financial sector, a bursting housing bubble, retail’s decline and those problems in Detroit.

Not bad, right? At least that’s how the market saw it. And that’s why stocks finished the day in positive territory. But overall there are now fewer people in danger of foreclosure, though more are able to spend money and pay taxes.

Jim Cramer talks so much out of both sides does he really even know if he is coming or going? The employment reading was positive news, but what is going on in the bond market is much more worrisome as the bond vigilantes are calling out the Fed and administration.

Markets soared on the surge in consumer confidence, however there is still a large disconnect between an increase in confidence and the action of spending money.”Consumers are not likely to spend just because they think things will get better,” said Mark Vitner, senior economist at Wachovia. “They will actually have to see them get better.”

The economy may have to grapple with a new natural rate of unemployment and a shift in consumer attitudes after this Great Recession. Much of the improvement in confidence came from the Expectations Index, which measures shoppers’ outlook over the next six months. That barometer climbed to 72.3 from 51.0 in April. Consumers’ assessment in the present situation, however, was still weak, rising to 28.9 from 25.5 last month. It also showed that shoppers were less pessimistic about the job market, even though it remains grim.

A lasting effect of the recession may be a “markedly higher” natural rate of unemployment, said Edmund Phelps, a professor at Columbia University in New York and winner of the 2006 Nobel Prize in economics. The natural rate is one that neither accelerates nor decelerates inflation. “It was 5.5 percent,” Phelps said. “Maybe it will be 6.5 percent — maybe 7 percent.” We could in fact be facing an unemployment rate greater than 8% for the next 5 years or so, and as a result the economy will face growth challenges while consumers live within their more modest means.

The U.S. financial crisis and recession have produced lasting shifts in consumer spending and savings reminiscent of the 1950s that may crimp profits and productivity, said David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto and former chief North American economist at Bank of America Corp.

“This is going to be a new era of frugality,” Rosenberg said. “This isn’t some flashy two- or three-quarter deal. This is a secular change in household attitudes.”

Slower growth in the economy will dampen equity prices. Behavior by newly ascetic U.S. consumers, whose spending drives more than two-thirds of the economy, will translate into “less return to capital and less-remarkable equity returns,” said Milton Ezrati, senior economist at Jersey City, New Jersey- based Lord Abbett & Co., which manages $70 billion. “The whole picture is muted.”

Where does this picture of stunted growth with possibly high inflation leave the average investor? Don’t be average and make sure you sign up over at InvestorsUnderground!