Summary
The equity markets continued to retreat as disappointing US economic news lead the markets lower. The week was capped off with a lackluster non-farm payroll report, which showed a contraction in jobs, and showed less than expected private section job growth. For the week, the S&P 500 was down nearly 5%.
Tomorrow's Events
EUR
M 6:00
German Retail Sales
May
1%
GBP
M 8:30
UK PMI Services
June
55.4
EMU Sentix Confidence
July
-4.1
M 9:00
EMU Retail Sales
-1.5%
Trading Opportunities
USD Index
The dollar index continued to falls, as disappointing US economic news continued to hit the market. Nonfarm payrolls fell by 125,000 in May, as 225,000 government workers that were hired for the 2010 census in recent months lost their temporary jobs, according to the U.S. Labor Department. 83,000 private-sector jobs were added last month. In May, nonfarm payrolls had surged by 433,000, boosted by the census hiring. The May figure was revised slightly from a previously reported 431,000 increase. Economists were expecting payrolls to drop by a more modest 110,000 in June. Taking into account revisions to prior months, the U.S. economy added an average of around 150,000 jobs a month in the first half, a level that is still not strong enough to bring unemployment down significantly. The unemployment rate fell to 9.5% from 9.7%, but this likely reflects people dropping out of the labor market. The workweek fell 0.1%, which is the equivalent of about 30 thousand job loss. The private sector 83k jobs and the May data were revised to show only 33 thousand from 41 thousand. Hourly earnings fell 0.1%. Bottom line then is few man-hours of work, fewer jobs and less income. The dollar index broke through trend line support and is likely to test the 83.00 level.
OIL
Weaker than expected manufacturing data earlier in the week, combined with a weak US outlook has weighed on the petroleum complex. Oil, gasoline and heating oil has all had a tough week and continue to move lower. The 20-day moving average is approaching the 50-day moving average and a crossover will be negative technically.