US Job Report:
Yesterday the stock market was up by 150 points in an anticipation that the job report would come out terrific, but it got disappointed. The employment rate came down to 8.6%, with 120k new position added for the month of November. The unemployment rate looked nice to read but the actual fact is 315k were no longer seeking job, reducing the participation rate to 64% (Lowest since 1987) and that's why unemployment rate dropped from 9% to 8.6%. The other thing to notice from the job report is that there was decline in the earning by 0.1% which more people are spending and they are earning less.
Every week jobless claim report is published on Thursday at 8.30 EST. The jobless claim on an average has been coming at 400k. So the total jobless claim for the month of November is 1.6 million whereas 120000 job were added. Another fact is since July 2008 till now, the weekly jobless claim has be coming at 400k or higher.
Non farm payroll in Jan - Nov 2011:
Jan : 36000; Feb: 216000; Mar: 216000; Apr: 24400; May: 54000; Jun: 18000 Jul: 116000; Aug: 0 Sept: 103000; Oct:: 80000; Nov: 120000
Monthly Jobless Claim from Jan - Nov 2011:
Jan : 1.7 M; Feb: 1.6M; Mar: 1.6M; Apr: 1.6M; May: 1.6M; Jun: 1.6M Jul: 1.6M; Aug: 1.6M; Sept: 1.6M; Oct: 1.6M Nov: 1.59M
If you compare the data in August zero job were added while there was 1.6 M jobless claim.
This month job report showed 55k job were added in retailer and transportation. This are temporary job and will be eliminated once the holiday season is over. Anyways it is better then 0 job added during the month of August 2011.
Spain Job report: (This news didn't showed up in media; Mainstream media try to show what people want to hear, since market was rallying upside this news was ignored)
On Dec 1st, Spain's jobless rate hit 15-year high at 21.5 percent, the highest in the eurozone, and the economy posted zero growth in the third quarter. The news was completely ignored as all the market were up.
European bank and ECB: (This news didn't showed up in media)
On Friday morning, the borrowing money by Eurozone bank from ECB reached highest level since March 2009. In March 2009, Dow was sitting at 6600 level, right now its at 12000 level. The market is not ready to lend money to most Eurozone bank. As per the data, the market is willing to lend money to only 1-2 strongest bank as compared to more then 40 largest bank which needs money. They now have to go to ECB to ask for money. Eurozone banks are now borrowing money from ECB at 2% while from marketplace they were previously getting it at 0.75% This was the main reason Eur/Usd started falling and people started taking profit from this market.
Next week is very important for Europe and world economy.
Its time to be cautiously optimistic. Remember this market is not safe for long term investor. The greedy wall street may pull the trigger anytime and you may get stuck in the stocks for long time.
"Sell on rally and buy on dips" and you could easily make lot of money. Be in the right stock at the right time.
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