Friday, December 4, 2009
Equity Markets Flat Ahead of U.S. Employment Report
The U.S. Dollar and equity markets traded in a relatively tight range overnight ahead of this morning’s U.S. employment report. Traders are looking for an improvement today from the
November report. Guesses are for a job loss of “only” 125,000 and for the unemployment rate to hold steady at 10.2 percent. There is some debate as to whether this is the low for the unemployment
rate. At this time the consensus agrees the rate will stay the same this month, but is likely to rise to 10.5 percent by the end of the first quarter 2010.
Equity markets are expected to drop sharply if the jobs loss figure comes out well above the guess or if the unemployment rate rises. Yesterday there was evidence that the Dollar and
the stock market were decoupling. In my opinion, a better than expected jobs number will trigger a rally in the Dollar but not necessarily the stock market.
Ask most economists if the unemployment rate is a lagging or leading indicator, and they …
