No Conviction After Jobs Report

Although highly-anticipated, the June non-farm payroll report landed upon Wall Street with less than a thud, but hardly more than a whimper.

The BLS reported a loss of 125,000 jobs across America during the month, though the overwhelming bulk of the losses were temporary Census jobs - 225,000 in all - while the private sector gained a reported 85,000 new hires. The remainder - 15,000 - were attributed to added temporary positions in the private economy.

While that number was not as bad as feared, it still was not good enough to lift Wall Street's dour spirits. A half-hour into the trading session, another dose of reality struck, sending stocks to their lows of the day by 1:00 pm. May factory orders declined by 1.4%, reversing 9 straight months of gains. Full Report [PDF]

Stocks quietly ended one of the worst weeks in a year which has seen stock prices and indices improve significantly off the bottoms reached in March, 2009, but worries persist that the recovery has lost its footing and the global economy is beginning to drift back towards a prolonged period of either slow growth or another recession.

The major indices recovered during the afternoon, briefly registering positive numbers for the day, but a bout of late selling sent the Dow and other indices to their seventh straight down day and fresh closing lows. Each of the major averages have settled well below their 200-day moving averages, a definitive signal of a turn in fortune for the economy.

Dow 9,686.48, -46.05 (0.47%)
NASDAQ 2,091.79, -9.57 (0.46%)
S&P 500 1,022.58, -4.79 (0.47%)
NYSE Composite 6,434.81, -27.22 (0.42%)

Decliners beat down advancers once again, 3909-2534. New lows exceeded new highs for the fourth straight session, 248-95. Volume was extremely light, owing not only to an unwillingness to institute new positions, but also to the upcoming Independence Day holiday.

NASDAQ Volume 1,647,075,750
NYSE Volume 4,676,019,500

Commodities didn't fare much better. Crude oil continued its descent, losing 81 cents, to $72.14. Just a week ago, oil was approaching $80 per barrel, but the supply-demand scenario has worsened considerably. Also, many hedge funds operating in the commodities space have unwound positions in order to raise cash. It's a fearful trade.

Gold was about the only gainer, rising $1.10, to $1,207.40, but it wasn't much of a bounce off the dramatic pull-back midweek. Silver lost another six cents, settling at $17.70.

The three-day Independence Day holiday could not have come at a better moment for stock traders, who need to clear their heads and develop strategies for dealing with a resumption of the financial crisis which - in reality - is now closing in on three years running.

While there are still bulls a-plenty, the argument between those who see another recession and more optimistic appraisals of just slow growth are more compelling. Hardly anyone can discern a silver lining within the seas of red data that was dumped upon the markets over the past three weeks.

The next major hurdle will be corporate second quarter earnings, which begin in earnest right after the break. It's almost certain that there will be an inordinate share of hits and misses and surprises on both sides of the ledger.

Until then, remember what the 4th of July is really all about: Independence. For a people and a nation.