After a nice rally yesterday, stocks are retreating in
early trade as investors digest a disappointing US nonfarm payrolls
report. According to the report, the US
private sector added 162,000 jobs in July, well short of Wall Street’s
expectations of an 180,000 gain. The
unemployment rate ticked down to 7.4% from 7.6% in June, but downward revisions
to May and June’s jobs numbers dampened investor mood. Reactions to the jobs data and its impact on
the Fed’s “tapering” strategy have been mixed.
Some analysts are saying the disappointing jobs growth supports the
Fed’s plan to continue its asset purchase program while others suspect the Fed
will begin tapering at its September FOMC meeting. While the market continues to look for clues,
one thing is certain…uncertainty. And as
we’ve said many times before, the market does not like uncertainty. Today’s jobs data has sent European stocks
lower, while Asian markets closed mixed.
Gold prices are finding some support above $1300 per oz., while treasury
prices surged sending interest rates lower.
Expect a quiet day on the markets as investors digest this jobs number
and set their course for the remainder of the summer.
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