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T3's Take 3: Big Volatility on NFP Day


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

Today on T3 Live

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Jobs Jobs Jobs!

The highly anticipated August nonfarm payrolls report was released this morning. The headline change in nonfarm payrolls number came in below expectations, showing an increase of 173,000 jobs vs. the 217K consensus.

Last month's numbers were revised upward from 215,000 to 245,000.

The unemployment rate dropped to a 7-year low of 5.1%, while wages were ahead of consensus.

Despite the modest increase in nonfarm payrolls, it is unlikely that the Fed is going to change course over the report, given the strength in wages and the upward revision from last month.

World Equity Markets

Asian markets experienced a sell-off despite the lack of Chinese market volatility. Chinese markets have been closed since yesterday for holiday celebrations.

Still, ongoing concerns about China's slowdown weighed in on markets.

The Nikkei closed down 2.15%, the Hong Kong Hang Seng fell 0.5%, Taiwan's TAIEX dropped 1.2%, and the Korean Kopsi lost 1.5%. 

Europe also finished the week lower. The nonfarm payrolls report boosted investor fears that the Fed may increase interest rates this month. The German DAX slid 2.71%, while the French CAC declined 2.81%. 

US equities followed suit. All major indices opened lower and continued to fall slowly throughout the day. The aforementioned jobs data weighed down equities as investors are still gearing up for a potential rate hike. Treasury yields climbed higher as investors moved in anticipation. 

The VIX jumped 8.6%, while the S&P 500 finished down 1.5%.

Oil Slump

Oil prices slipped down again today post-NFP.

Yesterday, the European Central Bank had cut its growth forecast for the year and even stated that the euro-zone may see deflation causing investors to question demand prospects. And China is still a concern, as is the Fed.

While an increase would help the dollar rally, that would likely weight on commodity prices down, especially oil as it is quoted in US dollars.

The Baker Hughes rig count showed a cut for the first time in seven weeks as the slump in prices has forced oil produces to cut back once again.

The drop didn't seem to help prices at all though.

Tuesday's Financial Outlook

US economic news for Tuesday will include NFIB small business optimism, labor market conditions index, and consumer credit.

Overseas, economic data will feature Japan's GDP, German industrial production, and China's trade balance on Monday, and Tuesday will feature Japan's bankruptcies, Swiss unemployment rate, the German unemployment rate, and euro-zone GDP.

Casey's General (CASY) will release its earnings report after the close on Tuesday. 
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