US Stocks Lower after NFP Release

US Stocks Lower after NFP Release
by, Mike King, Bullish University

Binary options traders saw a choppy day in the US markets as Wall Street tried to make sense of the weaker-than-expected non-farm payroll report and oil prices that continue to fall.

The Dow Jones fell nearly 120 points at one point to close down almost 30 points. Companies like DuPont and Caterpillar led losers on the day.

There was also the price of oil weighing heavily on binary options trader’s minds on Friday. We have seen a number of bullish days for the black gold as investors are expecting OPEC to cap production at their cartel meeting this month. Some investors, are starting to question whether or not this deal will actually happen. This has caused some intraday volatility which has led to some strategy changing with binary options traders. This volatility has been slightly more pronounced in the international markets. Not even the British Pound was immune as binary options strategy should start looking at consolidating positions in even the Forex markets.

By late morning trade, US crude extended losses to settle 63 cents lower at $49.81. Gold futures were a bit higher in the afternoon before moving lower and recording its worst week in nearly three years.

Crude moved lower, on Friday, as did gold and the Treasuries. We are seeing some reversals in the macro universe and this is spooking some investors. Friday was a thin trading day as the United States is going into a long weekend. The US Financial markets will be closed Monday thanks to Columbus Day. Also, the bond guys were not trading on Friday.

The S&P 500 was a hare lower by 0.3 percent as material lost over 1.5 percent. The tech heavy Nasdaq Composite was down by 0.25 percent. All three of the major stock indices were trading higher, shortly after the morning bell rang.

For the week, the three indices closed lower. This ended a three week win streak for Wall Street. The SPDR S&P Bank ETF (KBE) was up over two and a half percent. This was the best week for this ETF since August 5 when it roe over three percent.

Turning out attention now to the much anticipated US non-farm payroll report. The US economy added a less-than-expected 156,000 jobs las month. The unemployment rate ticked up to five percent. Investors expected the world’s largest economy to add 176,000 new jobs and for the unemployment rate to hold at 4.9 percent. The August number was revised from 151,000 to 167,000.

This was not a good number and it was not a bad number. If you look deep into the report, and below the headline, labor force participation did inch up. This is the good news. However, a print of 200,000 new jobs would have made this report stellar. Average hourly wages did puch higher by six cents to an annual rate of 2.6 percent and the average work week ticked higher to 34.4 percent. An increase of one tenth of a percent.

The NFP was a bit of a disappointment. However not too unexpected as the labor market tends to slow as the second half of the year progresses. The number is good enough to keep things crawling forward. The US Federal Reserve (Fed) will likely not raise interest rates in November. They are likely to raise the benchmark lending rate 25 basis points in December. This should cause some volatility causing binary options traders to change strategy quickly.

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