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Friday, February 5, 2010

Morning Market Report

The jobs report just came out and it was a mixed bag.

U.S. employers unexpectedly cut 20,000 in January, but the unemployment rate
surprisingly fell to a five-month low of 9.7 percent, according to a government report on Friday that hinted at some labor market improvement starting to take root.

The Labor Department said the economy shed 150,000 jobs in December, compared to 85,000 previously reported, but November was revised to a gain of 64,000, up from 4,000. Annual benchmark revisions to payrolls data showed the economy has purged 8.4 million jobs since the start of the recession in December 2007.

The unemployment is, at this point, totally misleading. It went down in large part because a lot of people gave up looking for work and weren't counted. The last three months there is no trend. We've gone from a gain of 64,000 to a loss of 150000 to a loss of 20,000 jobs. That's a choppy and inconclusive job market.

Meanwhile the work week increased slightly. It's now 33.3 hours a week. It was 33.2 hours last month.

Futures are up slightly this morning, however the three indices lost nearly three percent yesterday. Moody's suggested again that the growing U.S. debt is threatening the U.S.' AAA rating. That caused equities to fall. Meanwhile, unlike the first announcement, bonds improved a lot yesterday. The ten year shed nearly 11 basis points.

Bonds are slightly worse this morning. The ten year is up to 3.61% up from just less than 3.60%. The yield spread between the two and ten year U.S. Treasury bond is now at 2.82%. Meanwhile, the three month t bill is holding steady at .081%.

Crude oil is up this morning but has been in a downward trend for nearly two weeks. It's currently trading at $73.38 a barrel. That's up nearly a quarter from yesterday's close but it's shed nearly seven dollars a barrel in the last ten trading days. Gold is now trading at $1063 an ounce. That's even from yesterday but it had another down day yesterday.

All of this has happened as the dollar has strengthened. Today, the Dollar is stronger again. It's up .27% against the Euro, up .51% against the British Pound, and up .56% against the Japanese Yen.

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