Market Alert - Pre-Market

Futures vs FV: SP +13.85; DJ +114.12; NASDAQ +19.72

Futures up modestly ahead of Jobs Report then popped on the news. Fading about half of those post-jobs gains as stocks approach the open. Thus, a solidly upside open, but some questions as stocks struggle to hold all of the post-jobs gains.

Jobs Report termed 'whopping.' While it ws much larger than the 11K from May, sub-300K is not whopping. Again, we have dumbed down our historical perception of what is strong and what is mediocre for the US economy. I wrote over 5 years ago this would be the case and it is exactly what has happened.

Non-farm jobs: 287K vs 175K exp vs 11K prior (from 38K)

3 month average: 147K/month

Unemployment: 4.9% vs 4.8% exp vs 4.7% prior

Avg Hourly earnings: 0.1% vs o.2% exp vs 0.2% prior. Year/year 2.6% vs 2.7% expected as jobs mix remains tilted toward lower pay, hourly.

Workweek: 34.4 vs 34.4 exp vs 34.4 prior

Participation rate: 62.7% vs 62.6%

Household Survey: +347K unemployed versus +37K employed.
Long-term unemployed: +211K
Unemployed: rose to 7.783M

Jobs in lower pay areas again:
Leisure & Hospitality: 59K
Health: 58K
Information 44K (Verizon strike over)
Professional & Business services: 38K
Retail: 30K
Mining: -6K
Little or no change: construction, manufacturing.


OTHER MARKETS
Bonds: 1.42% vs 1.39%. Yields jumping post-jobs report

EUR/USD: 1.1077 vs 1.1061

USD/JPY: 100.31 vs 100.76

Oil: 45.54, +0.40. Off morning highs

Gold: 1346.50, -15.60. Was up pre-jobs. Obviously connected to Fed policy perceptions.


Futures are up heading to the open. Some concern Fed has less power to influence market up so looking at stronger data as a positive? If the Fed is not going to act, then a loose Fed and stronger data is truly good for stocks -- near term. In any event, nothing today changes the narrative, at least on first blush. We will see how the early gains hold as the initial jump higher has, as noted, given some back.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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