(As of 7:15 am PST)
The equity markets appear disjointed today after the
Labor department released an impressive October jobs report that surprised most
investors. According to the nonfarm
payrolls report, the US economy added 204,000 jobs in October, nearly double
Wall Street’s forecast. Immediately,
stock futures declined, as concerns of an early Fed taper returned to the
markets. Shortly after the opening bell,
markets recovered, but now are slipping off the highs of the day. The street is having a hard time trading this
report. On the one hand, the jobs report
surge is a great sign that the economy continues to strengthen despite the
October government shutdown. On the
other hand, the strengthening of the labor market favors an early taper of the
Federal Reserve’s bond purchase program, which means less stimulus and an
increase in interest rates. Talks of a
December taper have returned to the lips of investors and analysts alike. In other news, European and Asian markets are
lower. Interest rates on the 10 yr.
treasury spiked and the US dollar also strengthened while gold shed
$20/oz. All these moves reflect the
markets fear of a “sooner than later” Fed taper.
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