Morning Look: Surprising Bounce After Weak Jobs Report
The much anticipated jobs report was weaker than expected, with nonfarm payrolls falling by -63,000 (vs. +20k consensus). The S&P 500 broke below the 1300 level soon after the market opened, but the selling didn't last long.
The market bottomed and began to move higher, quickly erasing all its losses. There is still a lot of time left in the session. Either the shorts will cover into the weekend and keep the markets elevated, or this early rally could still fade.
There was some speculation that the Fed could step in on a weak jobs report and cut rates again. Instead, the Fed announced it was increasing the size of its TAF auctions to $100 billion to help improve liquidity.
It remains to be seen how much this will help, but improving liquidity should be the highest priority for the Fed right now. This is the worst credit crunch I can ever remember.
Asian markets were down big overnight, from -1% to -4% in India. The Yen is lower today, but needs to be down for more than just one day. The CBOE put/call ratio was very high again this morning, at 1.33. And the ISEE was depressed at 78.