(As of 7:10 am PST)
Stocks are surging this morning on the heels of a
positive jobs report that exceeded expectations. The US nonfarm payrolls report showed the
private sector added 203,000 jobs in November, much higher than analysts expected. Meanwhile the unemployment rate dropped from
7.3% in October to 7% in November, the lowest it’s been in 5 years. Perhaps more surprising than the reports
themselves is the market reaction. The
past 5 trading days have played to the tune of “good news is bad news” as
positive economic reports over the last week have spurred talks of an early
Federal Reserve taper. Many analysts were
calling for a positive jobs report today as a catalyst for further
correction. Today’s report certainly
supports the notion that the economy is improving enough to argue for a
December Fed taper, but the positive reaction by the market has caught many by
surprise. Perhaps, as some analysts are
now suggesting, the market will take the taper in stride, favoring a return to
fundamentals over a liquidity dependent market. Adding to the optimism this morning was a
positive reading of the Univ. of Michigan/Thomson Reuters Consumer Sentiment
index which showed consumer sentiment in November surging to its highest level
since July. It’s too early in the
session to tell if this rally has some legs.
The question for most investors remains – will the taper jitters get the
best of this market?
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