Poor Jobs Data Fails to Induce Selling

Prior to the opening bell, the highly-anticipated Non-farm Payroll announcement from the Labor Dept. initially sent futures into near free-fall, but, after a modest decline in the first few minutes of trading, stocks stabilized and spent the rest of the day hugging the flat line.

October saw 190,000 jobs lost in the US and the "official" unemployment rate crank up to 10.2%, the highest since 1982. That the jobless rate was so high just 27 years ago must have served as a salve of sorts to investors, because the markets took it in stride. There is also the growing understanding that many of the US firms listed on the stock exchanges do not rely on the United States as their primary markets, one of the myriad hidden factors of globalization. Thus, US employment is not as large a factor in many businesses, plus, due to the largesse of the federal government, many people who are not employed have fairly sizable disposable incomes, allowing those same US markets to function as though full employment was in force.

Of course, the federal punchbowl of benefits is not any way to grow an economy, but equity investors seem intent on pushing prices higher, so long as the Federal Reserve keeps rates at essentially zero and Uncle Sam continues to dole out the greenbacks. Naturally, the dollar continues to decline in value, a condition not lost on the macro-economic crowd.

Nevertheless, Friday was not the day to be selling stocks as the major indices eked out marginal gains. Monday, however, may be another story.

Dow 10,023.42, +17.46 (0.17%)
NASDAQ 2,112.44, +7.12 (0.34%)
S&P 500 1,069.30, +2.67 (0.25%)
NYSE Composite 6,958.29, +8.15 (0.12%)

As one might expect, winners and losers were nearly evenly split, with declining issues taking a small advantage, 3203-3177. New highs, though, soared well ahead of new lows, 209-61, widening the margin for the third consecutive session.

Volume was negligible, well below normal levels, though Fridays are becoming something of an outlier, with trading sluggish at the end of the week.

NYSE Volume 4,999,170,500
NASDAQ Volume 1,845,147,875

Commodities finished mixed, with oil down $2.19, at $77.43, gold ahead $6.70, to $1,096.00, and silver lower by 4 cents, to $17.38. After the enormous move by gold over the past three weeks - a 10% gain - it appears that the yellow metal has found its own market, diverging even from its fellow precious metals. Platinum was lower on the day, and copper was flat. Gold has gone its own way and cannot be counted on as anything but a separate asset class, and possibly a proxy against all fiat currencies.

The cross-currents in the markets lately have been extreme, adding to volatility in some cases, but also prviding significant headwinds to any upward movement in stocks. The indices are settled below recent highs, and it does not appear that there's enough of a catalyst anywhere - outside of the easy carry trade on the back of the declining dollar - to propel equities through their recent highs. Within days the focus will be on the holiday shopping season, and, while many Americans may not be able to luxuriate their friends and families with expensive gifts this season, well-heeled foreigners certainly can take advantage of the prices of goods denominated in US dollars, especially Europeans and Chinese shoppers. International centers such as New York, Los Angeles and Miami may very well see increased traffic from outsiders, while Americans do their holiday purchasing at the various discounters, striking something of a balance.

With 3rd quarter earnings season now nearly complete, the next few weeks may indeed be a true test of the fortitude of US markets and equities. One thing's for sure: it's not going to be dull.