“Hey US economy, we were expecting better jobs numbers for June, man”
Dow 12,773 (-0.96%) S&P 1,355 (-0.94%)
The finish to this holiday-shortened week was only fitting - just like the arc of Wednesday’s 4th of July festivities, Monday and Tuesday enjoyed a positive Budweiser-infused buzz of optimism that sent stocks up, but Thursday and Friday brought them crashing back down like a bad hangover. This morning’s disappointing official government employment report – the marquee event of the week – was the primary market mover. Concerns over the US recovery sent the Dow down 124 points.
Labor Department reports 80,000 jobs added in June
The Labor Department reported at 8:30am this morning that only 80,000 non-farm jobs were added in the US in June, notably below the 100,000 that economists expected, and the unemployment rate stubbornly remained at 8.2%. After gaining only 77,000 jobs in May and 68,000 in April (both those numbers were revised from their original announcements), the government’s monthly assessment of the economy has failed to meet forecasts since this past winter, signally a sluggish shift that analysts are viewing as “a soft spot.” Investors look to the report at the end of the first week of every month as a critical indicator for the nation’s employment status and will now shift their focus to how the central bank (the US’ Federal Reserve) will react to spur the economy.
Poor jobs report hits industrial stocks and commodities
A disappointing jobs report usually affects most stocks (as happened today), but certain sectors get hit below the belt. And for that reason, we hope industrial and manufacturing firms were wearing a cup. The Dow tracks key blue chip stocks and today’s news sent big equipment firm Caterpillar (CAT) and mining company Alcoa (AA) both down nearly 3% as the index’s worst performers. Certain commodities are similarly sensitive to news that affects or reflects global economic growth. Futures contracts for crude oil and copper, both considered by investors to measure economic growth since they’re so critical to production and manufacturing fell notably on concerns there will be less demand with less growth.
Next Week:
- Alcoa and JP Morgan will be kicking off the corporate earnings season
- As usual, look for MarketSnacks’ “Best Damn Week In Review” coming out Sunday to get your week started right….
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