The market is lower in early trading, but well off its opening lows after a disappointing jobs report before the open.
Nonfarm payrolls for May increased by only 54,000, far less than the 169,000 economists were looking for. Private payrolls increased by 83,000, also less than half of what was expected. And the unemployment rate ticked higher to 9.1%.
After this report came out, the futures market took a big hit, and when I left the house this morning the Dow was expected to open down around 140 points. But that market the low for the day so far, and soon after the market opened, another economic release came out that was fairly positive.
The ISM Services Index for May came in at 54.6, which was better than expected and up from 52.8 in April. Given that two-thirds of our economy is service-based, this is a pretty positive report for the economy.
As such, the market bounced, and currently the markets have recouped about half of their earlier losses. It is still early, so we will have to see how it goes into the close today ahead of the weekend. I wouldn't be surprised to see some short-covering into the close.
The 10-year yield briefly dipped as low as 2.95%, but has since bounced back to 3.02%.
Oil prices have dipped below the $100 level, while gold prices are higher to $1543.
Asian markets were mixed overnight, with some chatter about a possible rate hike in China over the weekend.
Trading comment: The markets are set to post their 5th consecutive weekly loss. I expect stocks to bounce next week, so I am going to buy some things for a trade. But as long as the major indexes remain below their 50-day averages, I will remain in a big-picture defensive mode. The Traders Almanac says that June is the second worst month of the year for stocks historically, and I have my own hesitations about the summer doldrums. So while it's always okay to try to take advantage of the market's trading ranges, now is not the time to get aggressive.
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