By Nicholas Santiago on July 2nd, 2010 10:01am Eastern Time
This morning the non-farm payroll report was released and it was not a good report. However, it looks as if the market had already priced the poor job number into the cake. Therefore, as long as the job number was not a shocking disappointment it may just be a “sell the rumor buy the news event”. The real test for the market today will be at the close of the day. Does the market sell off at the end of the trading session before the long holiday weekend? Should the market close flat to positive this could be considered a small victory for the major indexes.
Many stocks in different sectors are trading slightly higher at the open. The weak U.S. Dollar Index is helping to inflate the markets higher. However, yesterday the market indexes still traded lower as the dollar declined. This is a sign of deflation which is very strong when it grabs hold. So far leading commodity stocks such as Cliffs Natural Resources (NYSE:CLF), Freeport McMoran Copper & Gold (NYSE:FCX), and Devon Energy Corp (NYSE:DVN) are all positive to start the day. Should these leading stocks reverse the markets indexes are likely to decline as well.
Follow the leaders and everything else will fall into place. Right now there is no secret that the markets are walking on fragile ground. One rule of thumb that traders and investors should follow is if Goldman Sachs Group Inc (NYSE:GS), and Exxon Mobil Corp (NYSE:XOM) hold up, the market is likely to hold up. If these two leading stocks fall the markets will likely decline as well.
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