The Good Side Of Bad Jobs Report - Markets This Morning

  • A bad jobs report started the day with stocks off about 1.5%.
  • But the good sign was soon seen and most finished up over 1%.
  • Battered miners and oil companies were the stars, as traders sought bargains.

Friday started with a very disappointing jobs number, 142,000 jobs created in September and August’s number reduced to 136,000, at a time when everyone was predicting upwards of 200,000.  But as the trading day wore on people started looking on the good side of that, the idea that the Fed won’t be raising interest rates and other countries might start stimulating their own economies.

Thus what started as a miserable, horrible, terrible, and really bad day, with the averages losing 1.5%, turned gradually into a pretty good one, the averages moving up by 1-1.5%, with the Nasdaq Composite (INDEX:COMPX) having the biggest gain by day’s end. For the day the Dow Jones Industrial Average (INDEX:INDU) finished up 1.23%, 200.36, to finish at 16,472,  the S&P 500 (INDEX:SPAL) finished up 27.34, or 1.43%, to finish at 1,951, and the Nasdaq finished up 80.69, 1.73%, to finish at 4,707.

All these numbers are still near correction territory from the highs achieved in July, but they’re now down just 9-10% from those highs, which will be seen as a positive side by technicians.

Why Did It Happen?

Two things made it all possible. First, other global markets had started off very well. Second, the bad jobs number caused the dollar to fall in value, and that is what has been causing slower growth in the first place.

Japan finished nearly even, up just .02%, but Shanghai rose .48% and when Hong Kong rose 3.17% we were off to the races. The good news moved straight into Europe, where the German DAX rose .46%, the English FTSE rose .95% and the French CAC-40 rose .73%. Things were so good that even the Brazilian Bovespa had a rally, up 3.52% on the day. 

Then there were the currencies. The Euro rose .07% against the dollar, to $1.12. The British pound rose .32% against the dollar to nearly $1.52. The Japanese Yen also rose, by .10%, to finish at 120.  It all adds up to maneuvering room for the Federal Reserve, which is now not expected to raise rates until next year.

Another Good Day for Tech

It was another good day for technology shares, as Microsoft (NASDAQ:MSFT) rose 2.15%, or 96 cents, to finish at $45.57, Amazon (NASDAQ:AMZN) rose another 2.27%, $11.82, to $532.54, and Google (NASDAQ:GOOG) finished up 2.33%, 14.99 per share, to $656.99. As has been the case for some time, these big tech issues have weakened less on downdrafts, and shot back up further on updrafts, than most other stocks.

But it was also a good day for biotechs. Eli Lilly (NYSE:LLY) was up 2.75%, $2.34, to finish at $87.52. Celgene (NASDAQ:CELG) rose 3.17%, or $3.58, to $116.44. Amgen (NASDAQ:AMGN) rose 1.6%, or $2.24 per share, to finish at $142.27. In all these cases the stock chart looked similar, a sharp plunge at the open followed by a climb back up to even, then a pause like a groundhog looking for its shadow and finally an afternoon rally toward the high for the day.

The Stars Were Commodity Stocks

It was commodity stocks who were the stars of the day. $GLEN was up another 4% to finish at 95 pence, which is still 40% from where it was in early September but about 25% up from where it was at the end of Monday. Freeport-McMoran (NYSE:FCX) also rallied, by 80 cents, but that represented a gain of 8.15% to $10.62.

Even the oilpatch looked better. Kinder Morgan (NYSE:KMI), the pipeline company, rose 5.33% or 1.50 to 29.93. At that price buyers are getting a yield of 6.6%, Enterprise Products Partners (NYSE:EPD), another pipeline operator, rose 5.21% or $1.37 to finish at $27.69. The sun even shown on oil drillers, with Anadarko Petroleum (NYSE:APC) rising 5.18%, or $3.18, to $64.11, and Marathon Oil (NYSE:MRO) up 8.82% or $$1.35 to $16.66.

With oil production continuing to fall, investors are on the hunt for bargains, and all these companies are trading at prices 25-50% below where they were even a few months ago.

So What Happens Now?

The flip answer is I don’t know, I’ll be in Ireland all the week on vacation.

Do Russia’s moves in Syria mean to end the war there, or simply end it on Bashar al Assad’s terms? Is China going to do what it takes to re-accelerate growth? Will a firm bottom be found in scandal-soaked Volkswagen (OTC:VLKAY)? And does Hillary Clinton really mean it when she threatens to control health care costs on the backs of drug producers?


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