Payrolls Report Worse Than Expected, But Market Rallies
Today is another example of how difficult this market has become on a day-to-day basis. Yesterday was a dramatic selloff, and the whispers that today's jobs number could be really bad had many thinking the market could be down again this morning.
So how did it play out? The nonfarm payrolls report showed the economy lost 240,000 jobs in October, worse than the 200k estimates. The unemployment rate rose to 6.5%, which I heard is a 14-year high. But stocks rallied anyway, defying those that likely were betting on a continued market decline this morning.
The auto makers are also in the spotlight right now, as the Big 3 are racking up big losses, and are turning to the goverment for another bailout. The recent drop in monthly sales by the auto makers was breathtaking, down as much as -45% at GM.
I am torn on this one. Normally, I would say giving them money is throwing good money after bad. But if one or two of them fail right now, it could mean as many as 2.5 million people would lose their jobs, and that just isn't what the economy needs right now at all. Tough call.
Asian markets finished mixed overnight, after S. Korea joined the rate cut brigade and lowered interest rates. The dollar is lower today vs. the Euro, and that is helping commodities. Oil is back up above $62, but it has been very hard for oil prices to sustain any strength lately.
The 10-year yield is firm at 3.76%. And the VIX is falling -8% today to 58.6, a welcome sign.