Yesterday was an absolute sloshing of the stock market with every sector falling on its face. We were able to come out
by the skin of our teeth with some gains, but it leaves me wondering how we can get going again in this market. There is going to need to be some type of catalyst now to turn the market’s direction. Today, it could have come from the ADP’s Non-Farm Unemployment Change numbers released at 8:15 AM or productivity or the world markets or anything.
Unfortunately, anything may be too much to ask for today. The Unemployment index numbers came in much worse than expected with another 298,000 non-farm jobs lost in Q2 2009, while analysts were expecting 250,000. It was an improvement from June’s 350,000+, but the numbers were much higher than expected, signalling recovery is going to be slow and new jobs are going to be hard to find.
At 8:30 AM, the Bureau of Labor Statistics announced that the unit labor costs were also worse than expected in the second quarter of the year with the average unit costing 5.9% less than one year ago, a higher drop than Q1 and way above expectations of 5.3%. This means that the average employee is making less money than before.
The silver lining is that the workers we do have in the non-farm field are still being productive even though they are being paid less and there are less of them.
The futures before the first report came out at 8:15 AM about non-farm employment were just slightly negative with the Dow down around three points. After the report, the Dow dropped down to a 27 point lowered opening and the Nasdaq fell to almost seven points lower. The market did not take the news initially well, but I will continue to monitor that.
Asia and Europe also will not be a catalyst. Every major European index is down over 1%. The majority of Asian indices were down 1-2%, but the Shanghai Composite actually was up above 1%.
On another good note, Joy Global, the coal mining equimpment manufacturer and servicer, reported extremely bullish earnings this morning with an EPS of 1.21 vs. 0.95 expectations. The company, additionally, raised its full year outlook. This should be good for the sector JOYG is involved within, but it probably does not have the type of legs to make any major market movements.
With another bleak day staring us in…
