The 162,000 increase in payrolls last month was the smallest in four months and followed a revised 188,000 rise in June that was less than initially estimated. The jobless rate dropped to 7.%4. The S&P 500 is up 152% from its bear-market low in 2009.
Equities: 1701.50 is the key resistance level for the SEP13 E-mini S&P 500 (CME:ESU13), and with the jobs report coming out this morning below estimates, this market is trading down 2 points to 1698.25. We believe that 1700 might just be a short term ceiling level for this market. The market might start to head lower from here, possibly heading back to a key support level of 1680. We believe that with this underwhelming jobs number, the market has lost some of its bullish euphoria with this number coming out.
Bonds: The SEP13 U.S. 30-year bond (CBOT:ZBU13) market spiked higher on the release of the jobs number, trading now up 1’11 points to the 133’15 level. We believe the bond market could start to trade higher over the next few weeks as the stock market potential turns lower on a less than exciting jobs release today. The next big number the bond market will likely be watching is the CPI number released this month. Overall, after the spike, the markets seem to be very quiet today, with the number not coming out significantly higher or lower than forecast.
Currencies: The currency markets have dramatically reversed course from yesterday’s action, when it seemed like they were preparing for a big upside surprise in the jobs report. This morning, the SEP13 USD futures (NYBOT:DXU13) are down 33 ticks to 82.11, while the SEP13 Euro is up 54 ticks to 132.70. It seems as though the Euro has some strength underlying it, and we would not be surprised to see the Euro test the top of its recent range at around 1.34. The SEP13 Aussie dollar is below 89, trading down 31 ticks to 88.80. This currency has been weak recently, and we would not be surprised to see it fall farther.
Commodities: DEC13 gold (COMEX:GCZ13) spiked higher on the jobs report, trading from $1,282 to a high thus far of $1,318. In other words, gold traded up right back into its recent range. We believe the downside of gold has now been tested and rejected, and believe that gold might stay in the low to mid $1,300s in the near term. SEP13 WTI crude oil (NYMEX:CLU13) is down just over $1 this morning, trading below $107 to $106.78. We believe crude is susceptible to upward price movement toward the $110 level.