Market Morning Huddle – Jobs Data Disappoints – 5 Feb 2016

News Driver: (8:40am) Today is all about the jobs data. Nonfarm Payrolls missed with a 151k jobs print vs the forecast of 190k. The Unemployment rate came in at 4.9% vs an expected 5%.

The monthly data set is seen as one of the most important economic updates. It indicates the strength of the labor market and helps the Fed determine whether the economy is strong enough to cope with an interest rate increase.

Oil is lower after the jobs data. It been higher earlier in the morning due to a weaker US dollar but that has also reversed -0.2%

S&P Futures -0.2%
Nasdaq Futures -0.2%
Dow Futures -0.2%

Into the open this morning with the pre-Non-Farm-Payrolls data we see the market as highly mixed. The market’s initial reaction has been “risk-off” to the news, suggesting a mild “loss-of-faith” in the US economy; odds for a March rate hike are now even lower but that is mostly priced in.

2016-02-05_sp-futures

MID-LONG TERM (Weeks-To-3Months+): Bearish

(STILL IN FOCUS) Yesterday the S&P closed at 1915 as expected still below the 1928-1921 resistance structure but above the 1880-1870 support floor. If the S&P 500 breaks back below 1,880-1,870 (a key support floor), and if the Crude Oil (WTI) reverses back below $30 aggressively. This market has more downside risks than upside potential in the mid-to-longer-term. Look to De-risk long positions with rallies unless you can stomach the volatility. We may very well look back at this time as the start of the Bear market. Be ready for anything.

SHORT TERM (Days-To-Weeks): Bullish

We enter the week with a HOLD on short term Swing and Positions trades. If the S&P 500 breaks 1928-1921 and HOLDS below that a move closer to SELL for shorter term positions is a good idea. A break below 1880-1870 for the S&P 500 suggests the “bounce” is in jeopardy and likely over and a move to de-risk is the better option.

S&P 500: As the market settles down from the news (8:40am EST), we see the S&P 500 off the pre-market lows -0.5%, Nasdaq -0.6%, Russell 2K -0.7%

TSX: With Oil flattening out versus yesterday likely to turn negative and Gold now in mildly negative territory combined with a weak-form risk-off tone to equities globally, we anticipate the TSX to remain under resistance of 12,810-12,755 into the open with better odds to under-perform and print mildly negative into the close.

Bonds/Gold: Defensive assets heading back to flat or slightly negative versus yesterday’s close (TLT -0.15%, Gold -0.2%).

Oil: $31.63(8:51AM): Levels to watch are $31.50 -$31.00 support and $32.80 resistance

Economic Calendar: Nonfarm Payrolls (Jan) missed with 151k vs the 190k forecast. However the Unemployment rate is now at an 8 year low with a 4.9% reading vs the expected 5%

For a review of the rest of today’s economic data visit the economic calendar here.

Earnings: Stocks to watch include Estee Lauder $EL, Moody’s $MCO and Tyson Foods $TSN which has already reported a strong beat and is up pre-market.

For a complete list of today’s earnings visit the earnings page on our site.

 

About the Author Dave Gagne

Founder of MarketInsidersClub.com. President and CEO Dynamic Wealth Financial Inc. Author of Trading Master Plan Subscribe to the MarketInsidersClub Youtube Page here

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