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Traders See Ugly Jobs Number and Buy the Dip


Today's financial recap and tomorrow's financial outlook.

On Friday, when US markets were closed, the Bureau of Labor Statistics reported the smallest monthly increase in nonfarm payrolls since December 2013.

The economy created 126,000 jobs in March, missing the 245,000 consensus by a wide margin. Additionally, January and February's numbers were revised lower.

The unemployment rate was in-line at 5.5%. On the positive side, average hourly earnings rose 0.3% month-over-month, beating the expected 0.2% gain.

The Markit US Composite & Services PMIs  both beat expectations.

US equity futures fell sharply following the release of the NFP report, but traders aggressively bought the dip on Monday.

The S&P 500 finished up 0.7% today.

While the job numbers may signal weaker economic growth, traders may be anticipating an even more dovish Fed policy as a result.

For example, JP Morgan pushed out its forecast for a 25 bps rate hike to September from June.

The US dollar initially sold off but rallied back Monday afternoon.

Commodities were strong today courtesy of the weak job numbers, with gold and silver extending their recent winning streaks.

Crude oil also impressed, powering above $50 today. Saudi Arabia raised prices for crude sales to Asia for the second straight month as demand continues to improve. Additionally, traders widely expected oil to sell off on last week's Iran nuclear deal, indicating that the news may have been priced in.

Tesla (TSLA) was up 6.3% today after the company announced a 55% increase in car deliveries for the first quarter. Investors have been concerned about Tesla sales slowing in China, so the news eased worries of an earnings miss.

SanDisk (SNDK) shares were up 4.2% after research firm Susquehanna suggested that Western Digital (WDC) should buy out the flash memory maker. SanDisk recently cut guidance, sending shares sharply lower, but the mere suggestion that a deal would make sense was enough to send the stock higher today.

Tomorrow's Financial Outlook

The Bank of Australia will announce its rate decision overnight. Economists expect no change.

In the US,  the latest IBP/TIPP Economic Optimism, JOLTS Job Openings, and Consumer Credit numbers will be released tomorrow.

Twitter: @T3Live

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