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Jobs Data Ugly But Spin Keeps Markets Flat (NYSE:SPY) (NYSE:UUP)

Posted by Aadil on February 4, 2011 at 9:31pm
The Non Farm Payroll Report was down right ugly. 36,000 jobs were created in January, far lower than the 150,000 expected. While this was a poor number, the markets barely sold off. The spin came in when the Unemployment Report was released, coming in at 9.0%. This was a significant drop from the previous month. In addition, last months Non Farm Payrolls Report was revised higher.  The combination of these two, canceled out the negative new Non Farm Payrolls Report and kept the markets around the flat line.  The SPDR S&P 500 ETF (NYSE:SPY) is trading $130.72, -0.06.

The Unemployment Rate is one of the most hyped economic releases each month. However, it is one of the most false indicators of true unemployment.  When calculating the Unemployment Rate, if you worked one single day during the month you are counted as employed. If you work a part time job because that is all you can find but want to work full time, you are considered employed. If you could not find a job for months and stopped searching, you are not counted as unemployed. There are many more screwed factors that the average citizen has no idea about. The real Unemployment Rate is estimated to be about 18%.

The Dollar is advancing for the second day in a row. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $22.43, +0.08 (+0.36%). This is actually more a bounce on a short term oversold Dollar.  To gain more market guidance, analysis, swing trades and education, join the Research Center. Take a free trial today.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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Egypt, the Dollar, and Bernanke (NYSE:FXE) (NYSE:UCO) (NYSE:CLF) (NYSE:SCCO)

Posted by Aadil on February 3, 2011 at 5:23pm
There is a lot going on this morning as far as geopolitical events are concerned. The Egypt protesting by the people continues to escalate. Protesters are now demanding the removal of Egyptian President Mubarak. It now appears as if there is similar protesting taking place in Yemen. Many reporters have made comments that this movement could stem throughout the Middle East and Africa and eventually effect Saudi Arabia. Saudi Arabia is the worlds largest oil producer and this could cause a further increase in energy prices around the world. Spot crude for March delivery is trading higher by just 0.27 cents to $91.12 a barrel. The highly popular United States Oil Fund(NYSE:USO) is trading higher by 0.13 cents to $38.31 a share ahead of the opening bell at the New York Stock Exchange.

The U.S. Dollar Index is rallying higher ahead of the market opening. The U.S. Dollar Index is trading higher by 0.44 cents to $77.60. When the U.S. Dollar Index rallies higher this will generally put pressure on the major stock indexes around the world. The rising U.S. Dollar Index will also put pressure on the CurrencyShares Euro Trust(NYSE:FXE). This morning as the European markets are all declining. The S&P 500 e-mini futures are trading lower by 1.50 points to 1298.50 before the opening bell. Should the U.S. Dollar Index decline after the opening bell it would prudent to watch for a stock market bounce. Remember the U.S. Dollar Index and the major stock market indexes will often trade inverse to each other.

This afternoon , the Federal Reserve Bank Chairman Ben Bernanke, will be taking questions from the press. This new format by the central bank is likely due to the pressure from Congressman Ron Paul and his mandate to audit the Federal Reserve Bank. Many investors are blaming the Federal Reserve for the recent spike in inflation around the world. High inflation has recently sparked food riots in Tunisia, and Algeria. The central bank currently has the benchmark fed funds rate at zero percent since December 2008. The central bank has also pledged to buy $600 billion in U.S. Treasuries dubbed QE-3. There is even chatter that the central bank will expand it U.S. Treasury purchasing program further past its June 2011 completion. Quantitative Easing 3 could be on its way as hinted from the other Fed presidents.

This morning it would be wise to expect some commodities to be under pressure. Stocks such as Cliffs Natural Resources Inc(NYSE:CLF), Southern Copper Corp.(NYSE:SCCO), could be directly effected by the rising U.S. Dollar Index. Traders should look for all commodity stocks to trade higher should the U.S. Dollar Index decline.
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