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Bulls Get Smoked on NFP Day


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

The S&P 500 (INDEXSP:.INX) and Dow Jones Industrial Average (INDEXDJX:.DJI) made new all-time highs this morning following the mixed March employment report, but the bears quickly claimed victory on one of the ugliest days in recent memory.

The Bureau of Labor Statistics reported that nonfarm payrolls grew by 192,000 last month, which was a hair under the consensus forecast of 200,000. The unemployment number was 6.7%, just above the 6.6% consensus, while personal income growth was flat month-over-month. Economists were looking for a 0.2% increase.

On the plus side, February's headline NFP number was revised up to 197,000 from 175,000.

The S&P peaked exactly at 9:31 a.m. as profit-taking immediately set in following the open. US stock futures had been modestly higher in early trading, and the major indices had been stair-stepping higher since last Thursday's interim low at 1842.11, indicating fairly low worry levels among market participants heading into the jobs numbers.

Traders very quickly bid up safety plays like US Treasury bonds and utility stocks. The Utilities SPDR ETF (NYSEARCA:XLU) was up 0.5%.

But on the risk spectrum, we saw a sea of red.

Once again, biotech took a lot of heat, with the iShares Nasdaq Biotechnology Index ETF (NASDAQ:IBB) turning negative on the year after rallying over 20% through February 25.

Social media stocks like Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB) were slammed, as were key momentum names like Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX). That contributed to a 2.6% decline in the Nasdaq Composite (INDEXNASDAQ:.IXIC), while the S&P fell 1.3%.

Emerging markets, which had been red-hot around the turn of the month, looked weak for the second straight day. Brazil allied hard in early trading but finished the day on the lows, and China did the same.

Over in Europe, German newspaper FAZ reported that the European Central Bank modeled the possible impact of a 1-trillion-euro quantitative easing program in a bid to boost inflation. This came one day after ECB President Mario Draghi said the bank would maintain an accommodative monetary policy.

Tomorrow's Financial Outlook

There are no major earnings reports scheduled for Monday. The February Consumer Credit report will be released at 3:00 p.m. ET, but is unlikely to impact the market.

From overseas, we'll see Japan's leading index and monetary base target, Switzerland's CPI, Germany's industrial production, and eurozone investor confidence.

Traders will be looking to see if the high-beta weakness spreads into the broader indices. Despite today's ugliness, the trend is not yet broken as safety stocks are holding in fairly well. 

Twitter: @Minyanville

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