Poor Jobs Report Sends Stocks Reeling

The recovery that wasn't continues to glide along on a path to... somewhere, but probably, for most Americans, nowhere.

It's not like conditions are horrifying for most people, but standards of living are slipping overall, there are still 20 million of so Americans unemployed or underemployed, but the food stamps and welfare checks keep coming like clockwork, so what's the worry?

After this morning's dismal non-farm payroll report showed a net gain of 80,000 jobs - not enough to keep up with the growing labor force (which, recently, according to government statistics - lies, mostly - is shrinking) - stocks set out on a course to the serious downside, where they belong, but, after some thought, investors, or suckers, if you will, dove back in and brought the major indices back to more respectable levels.

The Dow had been down as much as 193 points, the S&P off by 19 and the NASDAQ down 55 before the afternoon crowd came in and hoisted the averages upwards, beginning just after 2:00 pm EDT in a very thinly-traded market.

Bankers and hedgies must be a lot like most people - or sheeple - in that they are so shallow and superficial as to believe that today's sharp decline and manufactured rally will convince anyone with a brain that the miasma of the debt clutch, high unemployment and Europe's special set of problems are not deeper, more profound and long-lasting than the suck-up media would have us believe.

Following last Friday's melt-up on Europe's latest "solution" stocks have clambered about a bit, and, as of today have given back only about a third of those ill-gotten gains. There's a growing apprehension that the lofty levels of equities and insistence by central bankers to keep printing more worthless fiat is going to cause a bust bigger than anyone wants to imagine. However, given that the current scheme of low to even negative interest rates - as Denmark posted just yesterday - has thus far kept the wolf from the door for nearly four years, central bank and government can-kicking may just be able to sustain itself for another two, three or four years.

Of course, there's always the possibility that something could go horribly wrong, like having most of the major global banking firms under investigation for rigging key rates, as is the current case concerning the libor, or that Italians might just give up on the technocratic form of governance that strips away wealth a little bit at a time and decide to go back to an agrarian lifestyle, an epochal event that would surely shatter the Euro for good, but, until such an event or "black swan," the global ponzi of the central bankers and their lieutenants within the banking cartel should continue without much interruption.

One has only to look around a bit, at places like Stockton, California, which recently filed for bankruptcy, or the new Section 8 neighbors in your formerly pristine, peaceful suburb or the dependency of old-timers, poor people and previously middle class folks on government programs to get a feeling that all is not well.

It's a depressing thought to think that our elected leaders and captains of industry have colluded against the best interests of the citizenry, but, that's what seems to have taken place over the past decade or so, or, at least it's become more out in the open during that time.

There aren't many good solutions to global economic crises, and he central bankers of the world have thrown everything, including the kitchen sink, at this one, to little avail. The day is approaching when all of the economists, bankers, politicians and CEOs are proven to be charlatans, their proposals and ideas completely wrong. That day will come; the trick is to know the exact date.

Until then, free houses for everyone!

Dow 12,772.47, -124.20 (0.96%)
NASDAQ 2,937.33, -38.79 (1.30%)
S&P 500 1,354.68, -12.90 (0.94%)
NYSE Composite 7,756.61, -81.17 (1.04)
NASDAQ Volume 1,419,548,625
NYSE Volume 2,650,810,250
Combined NYSE & NASDAQ Advance - Decline: 1708-3841
Combined NYSE & NASDAQ New highs - New lows: 225-36
WTI crude oil: 84.45, -2.77
Gold: 1,578.90, -30.50
Silver: 26.92, -0.75

Trepidacious Trading in Uncertain market Environment

On a day in which most of the economic news was positive - or, could have been considered in that regard - the palpable fear that engulfed Wall Street was nothing short of astonishing.

Even though the People's Bank of China (PBOC) cut interest rates, along with the ECB, and the Bank of England announced a boost in their own version of quantitative easing, adding 50 billion pounds to their asset purchase program, stocks could not get out of their own way throughout a tense, thinly-traded, anxious session.

US data was mixed. The ADP private employment index registered a gain of 179,000 jobs in June, blowing away estimates of a gain of 105,000, but ISM Services declined from 53.7 in May to 52.1 in June, the lowest reading since January of 2010.

Must of the angst appears focused on Friday's non-farm payroll report from the BLS, which is expected to show job growth in June for the US of 100,000 net new jobs. Following May's poor showing of a mere 69,000 new jobs, investors were rightly skeptical of the ADP number, which last month showed a gain of 136,000 jobs, so the consensus is that ADP's figures are skewed to the upside by 50,000, at a minimum.

With the major indices trading at, or close to, their highest levels since the end of May, investors exercised caution ahead of tomorrow's potentially-volatile non-farm payroll number.

The odd occurrence of stocks actually slumping when central banks cut interest rates or offer looser standards is confounding and possibly a signal that the current short-term rally is close to completion. Stocks are trading at levels closer to the highs seen at the beginning of May than the lows experienced at the end of May.

Also adding to the general state of confusion is the advent of second quarter earnings, which will begin to come to market next week. There may be some thinking that this earnings season will not be as robust as prior ones, even though estimates have been lowered for many firms.

There's also the nagging feeling that nothing is really solved in Europe and in America, no meaningful legislative action will be taken with the presidential and congressional elections taking place within four months.

The market is very uneasy at present, and yesterday's - and today's - extreme reading of new highs to new lows may have signaled to some an interim market top.

Of course, everything hinges on tomorrow's jobs' data, which will be released prior to the opening bell, at 8:30 am EDT.

Dow 12,896.67, -47.15 (0.36%)
NASDAQ 2,976.12, +0.04 (0.00%)
S&P 500 1,367.58, -6.44 (0.47%)
NYSE Composite 7,838.39, -63.27 (0.80%)
NASDAQ Volume 1,326,294,125
NYSE Volume 2,925,787,750
Combined NYSE & NASDAQ Advance - Decline: 2494-3070
Combined NYSE & NASDAQ New highs - New lows: 385-22
WTI crude oil: 87.22, -0.44
Gold: 1,609.40, -12.40
Silver: 27.67, -0.61

Short Session, Big Gains

In Tuesday's shortened session, since there was no negative news coming out of Europe and no US data upon which to trade, stocks took the path of least resistance and bolted to the upside, scoring unusually large gains in the 3 1/2 hour session.

Topping the news was the resignation of Barclay's chief executive, Bob Diamond, who has been embroiled for the past week in a scandal involving rigging of the Libor during the financial crisis in 2008.

Diamond, who previously said he would not step down, is at the center of a growing maelstrom which could reportedly involve 12 major banking firms also involved in the rate-rigging scheme.

Also revealed today was news that the Bank of England might have been encouraging Barclay's and others to maneuver the Libor to keep financial firms and the global economy from disintegrating at the height of the crisis.

The British parliament plans to open an inquiry into the matter, which will convene tomorrow, July 4.

One piece of economic data that was released was Factory Orders, which recorded a rise of 0.7% in May.

Auto sales for June were also announced by a number of car makers. Chrysler reported a 20% increase in sales from a year ago. Ford had a 7% increase, while sales of General Motors' vehicles rose 16%.

While down from the pace of May, June's numbers were enough to bolster confidence in stocks overall.

Dow 12,943.82, +72.43 (0.56%)
NASDAQ 2,976.08, +24.85 (0.84%)
S&P 500 1,374.02, +8.51 (0.62%)
NYSE Composite 7,901.59, +69.36 (0.89%)
NASDAQ Volume 976,336,625
NYSE Volume 2,067,057,875
Combined NYSE & NASDAQ Advance - Decline: 4176-1290
Combined NYSE & NASDAQ New highs - New lows: 482-22 (extreme)
WTI crude oil: 87.16, +3.41
Gold: 1,621.80, +24.10
Silver: 28.28, +0.78

Limited Follow-Through After Friday's Euro-fed Bazooka Gains

Like night follows day, Monday's trading followed on the heels of Friday's great Eurozone "we fixed it, again" ramp-job; the pseudo-rally on vapors of Germany "backing down" from imposing terms and conditions on bailout money was an enormous sham, a dickering of the markets which, without doubt will be eaten alive by the short-sellers, profit-takers and high frequency traders in due time.

The retrenchment did not begin at the first possible moment, with the start of trading for the week at Monday morning's opening bell, but, with the 10:00 am EDT release of the latest ISM Index showing a massive decline, from 53.3 in May to 49.7 in June, signifying slight, but actual, contraction, stocks quickly tumbled to what turned out to be the lows of the day.

With extremely light volume, all of the major indices kept to within a very narrow range, with the NYSE Composite and NASDAQ turning positive for much of the session, eventually being joined by the S&P 500 late in the day.

Of course, the markets being what they are, no bad news - such as the ISM report - is taken without swift contrary action via the HFTs, plus this week is shortened by the odd Wednesday holiday, the 4th of July being Independence Day, and the big nugget out there comes Friday, with June's non-farm payroll report, expected to show US job gains of 90,000.

By the end of the day, the only major index not showing a gain was the Dow, though its losses were marginal. Volume was excepted to be low, and it was probably less than expected. All in all, the day was very uneventful trading-wise, though those with a keen eye for data surely did not miss the fact that the ISM numbe was under 50 - signaling contraction - for the first time in three years, and that is, in itself, notable.

However, in what can be called the most perverse trade of the day, the ISM news was so bad that the most cynical traders see it as impetus for more easing by the Federal Reserve, and we all know what that means: No, not free houses for everybody, free money for BANKERS! and, if that's not just the best news of the day, what is?

On a note unrelated to to the day's trading action and other miscellaneous items of high finance, Henry Blodget at The Daily Ticker has a neat summary of what the Obamacare tax is going to cost Americans.

Dow 12,871.39, -8.70 (0.07%)
NASDAQ 2,951.23, +16.18 (0.55%)
S&P 500 1,365.51, +3.35 (0.25%)
NYSE Composite 7,825.02, +23.18 (0.30%)
NASDAQ Volume 1,708,509,750
NYSE Volume 3,267,654,000
Combined NYSE & NASDAQ Advance - Decline: 3768-1838
Combined NYSE & NASDAQ New highs - New lows: 414-32
WTI crude oil: 83.75, -1.21
Gold: 1,597.70, -6.50
Silver: 27.50, -0.11

Another Euro Deal, Another Knock Your Socks Off Rally

Being Friday, European leaders ended their two-day summit on a positive note - to wit: European leaders agreed to create a single supervisory body to oversee the eurozone's banks which could use the single currency area's rescue funds, the European Financial Stability Facility or European Stability Mechanism, to aid banks directly without adding to governments' debt.

Well, that nugget, around which the narrative goes something like, "this is a step closer to a fiscal union," but which in essence only makes it easier to shift money from one bailout fund to another and to respective countries' broken banking systems and still solves nothing in terms of the real debt crisis faced by the EU, was enough to send markets higher around the globe.

Beginning in the Far East, where stock indices rose in unison by 1.11% to 2.59% (except Malaysia, which was up only 0.31%), equity markets had one of their cheeriest sessions in weeks.

Once trading began in Europe, the noise was amplified, with stock indices up hugely. At the low end was the Swiss market, which gained 1.33% on the day, though Germany's DAX and France's CAC 40 were ahead by 4.33% and 4.75%, respectively, at the close. All of the markets were topped by Greece, which saw the Athex Composite bubble up by 5.88%.

By the time US markets were gearing up for their open, index futures were nearly limit up, with Dow futures pointing to a 200-point gain at the outset. Following Thursday's late day ramp-up, a systems pointed to a serious end-of-month short squeeze combined with the usual end-of-quarter window dressing, and the markets surely did not disappoint.

Stocks roared out of the gate and held their strong gains throughout the session, one of the best of 2012, ending a week of turmoil and apprehension with a powerful rally to take investors into the third quarter with a full head of steam.

The "new deal" in Europe, coming in the 19th summit since the financial crisis began, is set to be ratified by the participating countries and ready for implementation by July 9, which should come as welcome relief to Spain and its banking sector, which is in need of between 62 and 100 billion Euros in order to continue functioning and funding government debt.

While the suckers in stock markets around the world had themselves a field day, many know that this is only a day-trading profit environment and that within weeks, there will be more turmoil to roil markets, be it from US shores or the favored European flavor, which has become expert at sending markets lower on fear before propping them up with a summit, statement that all is well and a swift kick further down the road to the economic fiat money ponzi can.

Austerity being too much to handle for most Europeans, and growth a figment of supply-side thinkers' collective imaginations, the only solutiona the Euro-genii have come up with are more bailout funds lending to and from another within a framework of constantly-changing rules and procedures. Naturally, the effect of piling more debt upon already unpayable debt will eventually end in tears and currencies in tatters, but that result is seemingly being pushed as far out into the future as possible, all the while suspending the tenets of traditional economic thinking.

Well, at least the leaders in Europe are looking out for the "little people" by giving them a morale boost on a Friday afternoon... before taxing them into servitude by which to pay off the gigantic debt bubble being created. The people, primarily taxpayers - except in Greece, where tax avoidance is a national pastime - seem to be content with having more time to enjoy their little lives or prepare for the ultimate end of the fiat money regime, which must come, sooner, if not later.

One of the downsides of all this "feel good" economics being parlayed from the Fed to the Europeans and back again is that it is all inherently inflationary, and commodities didn't miss a step in joining into the all-asset-classes-ramp-up-free-for-all. Oil had one of the biggest one day jumps in history, and even the precious metals could not be contained in the short-squeezing euphoria.

But for now, it's all good. As the 1969 Peggy Lee hit, Is That All There Is, penned by the songwriting duo of Jerry Leiber and Mike Stoller, so solemnly intoned, "...let's keep dancing, let's break out the booze and have a ball, if that's all there is..."

Here's Peggy:



Free houses for everybody, eventually.

Dow 12,880.09, +277.83 (2.20%)
NASDAQ 2,935.05, +85.56 (3.00%)
S&P 500 1,362.16, +33.12 (2.49%)
NYSE Composite 7,792.53, +195.02 (2.57%)
NASDAQ Volume 1,780,693,750
NYSE Volume 4,426,005,000
Combined NYSE & NASDAQ Advance - Decline: 4898-809
Combined NYSE & NASDAQ New highs - New lows: 378-35 (WOW!)
WTI crude oil: 84.96, +7.27
Gold: 1,604.20, +53.80
Silver: 27.58, +1.33