Jobs Report Quells Taper Talk

Maybe the Fed was on to something when it made those slightly dovish comments in its recent statement.  While some folks thought yesterday's strong ISM data raised the specter for a September taper, today's weaker than expected jobs report likely quells those fears.

Nonfarm payrolls rose 162,000 in July, well below estimates for 184,000 jobs.  Private payrolls also came in below expectations.  The unemployment rate ticked down to 7.4%.  But the lighter than expected jobs report probably means the Fed isn't in a huge rush to scale back its asset purchases.

In other economic news, personal incomes rose 0.3% while personal spending rose 0.5%.  Those higher spending figures hopefully bode well for stronger GDP figures in the second half of the year.

Asian markets were mostly higher overnight.  Japan spiked 3.3% while India registered its 8th straight loss.  Indonesia's GDP rose 5.8% yr/yr, but that was below expectations.

Europe's markets have moved lower after the weaker than expected US jobs report.

Stocks rising on earnings: MELI, LNKD, AIG, EAT, SEE, PSA

Stocks falling on earnings: ETN, CVX, IT, CHD, SIRO

The dollar index is lower today and commodities are mixed.  Oil prices are down near $106.75.  Gold prices are up a bit to $1315, but probably should be higher.  Silver and copper prices are also higher.

The 10-year yield has faded back to 2.61% after closing at 2.72% yesterday.  And the VIX is down another 4% to 12.35 so far.

Trading comment: I think many people were geared up for a stronger jobs report today.  So stocks are being sold and bonds are being bought, at least at the margin.  Stocks had a big day yesterday, so today's mild pullback is normal.  But if fears about the Fed tapering in September are diminishing, that should embolden the bulls to come back to stocks next week .  Interest rate sensitive sectors are mixed so far today, with REITs bucking the overall weakness but utilities lower.  Rest up.