Market Alert - Pre-Market

Futures vs FV: SP +1.74; DJ +29.50; NASDAQ +2.11

Holding modest gains with a 3 hour trend higher off morning lows. Futures bounced up and down on jobs numbers but have steadied and are trending higher into the open.

The jobs report was a miss, but the story was the same with low pay, hourly jobs hugely dominating the report.

156K vs 176K exp vs 167K prior (from 151K August). July revised to 252K from 275K
3 month average: 192K/mo

Unemployment: 5.0% vs 4.9% exp vs 4.9% prior

Earnings: 0.2% vs 0.2% exp vs 0.1% prior. +2.6% year/year. Thank goodness for the increased minimum wage -- just before the companies go full robotic. But hey, wages will rise then right? Just as with unemployment, if you reduce the number earning lower wages from the equation, wages rise. Perhaps that is already happening . . .

Workweek: 34.4 vs 34.4 exp vs 34.3. A 'surge' of 0.1. It moved up to this level four months ago. Didn't take.

Participation rate: 62.9% versus 62.8%. More moved into the workforce. The high was 63.0% in March. That didn't take either.

Number employed: +354K
Number unemployed: +90K
Not in labor force: -207K

Same sad story with the jobs mix:
Professional & business services: +67K
Healthcare: +33K
Bar tenders, waiters: +30K
Retail: +22K (+317K over 12 mos)
Mining: 0
Manufacturing: -4K

But all is well. Cleveland Fed President Mester on CNBC said it was a 'solid labor market report' because it only takes '75K to 100K' jobs to maintain employment. But the economy supposedly produced twice the 75K amount and unemployment is still stagnant! Oh, that is because we are at 'FULL EMPLOYMENT' according to Mester. Okay, sorry 94+M out of the workforce; you are at your full employment level, your highest and best use achieved. Oh, don't forget about those full-time workers who are working at half the pay of their prior full time job. No problem there; you have a job so shut up, right?

Odds of November rate hike: 15% versus 30% before the number. Odds in reality: a snowball's chance in hell. Yellen would never, ever, ever hike rates in November in an election year. Ever. Yes, even though Mester said the Fed was populated by apolitical technocrats. Her nose grew 5 inches in the interview.


OTHER MARKETS:
Bonds: 1.764% vs 1.74% 10 year

EUR/USD: 1.1182 VS 1.1151

USD/JPY: 103.12 VS 1004.02

Oil: 50.45, +0.01

Gold: 1264.50, +11.70


Stocks are set to open modestly higher, apparently feeding off a headline jobs miss. Gold is recovering some, bonds are still off, however.

Really watching the DJ30, SP500, SP400 performance today. The market is showing some upside potential and we will see if they can try to crack their bearish patterns. Even then, not too sure you can trust any move today as DB is still out there ready to cause trouble and earnings are starting next week.


Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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