Tag Archive: unemployment rate

Jobs Data sends stock market to finish lower

by Jeroen van Oostrom

Earlier today, the US Jobs Data was released for September 2011. We needed some good news after the terrible job report from August which didn’t create any jobs at all. For September, everyone expected around 50,000 jobs to be created. But the report was better than expected.

The report stated that 103,000 jobs were created in September. Sure you may think that it’s great, but a large portion of the number is Verizon workers going back to work in September after the strike that we saw over the summer. This is actually not great news. It’s decent news that we are actually creating jobs in the economy, but it’s no where close to getting us out of the high unemployment rate that we seem to be stuck on.

August 2011′s job data was also revised. The number went from 0 jobs created to 57,000 jobs created. Although that’s good news, it’s still no where close to getting us out of the 9.1% unemployment rate that we have been stuck on for months.

The Congressional Budget Office is predicting that the number will get better by the end of the Fourth Quarter of 2011. They are expecting it to drop to 8.9%. It’s not a huge drop but still, it’s below 9%, something we haven’t seen for a very long time.

This will be a big challenge for President Obama when it comes to his reelection. By the 2012 elections, the unemployment rate will still be very high, estimated to be around 8.5%. If President Obama is reelected, it will be pretty historical because it has never been done while the unemployment rate is so high. But we will have to see how things go. If things start turning around this quarter or the beginning of 2012, President Obama may have a good chance of being reelected. But it’s still to early to assume anything.

You would expect the stock market to do some rallying after the better than expected jobs data earlier today. But it wasn’t the case. The mixed jobs report actually sent the stocks finishing lower than yesterday. The economy in Italy and Spain were also downgraded today which added to the reasons for the drop today.

Today, the Dow Jones dropped 20 points, finishing at just over the 11,103 mark. The NASDAQ Composite lost over 27 points finishing at 2,479. The S&P 500 dropped just over 9.5 points, finishing at 1,155. And the NYSE dropped more than 71 points, finishing at 6,925.

Apple recently announced it’s iPhone 4s. But the death of Steve Jobs has left a small impact on the value of the Apple (AAPL) stock.  The value of Apple dropped just over 2% or $7.57 a share. it’s not a big drop and they will bounce back soon. Because of Steve Jobs, Apple is one of the strongest companies in the world and it won’t be going anywhere. It is the legacy Steve Jobs left behind and it will be around for a while. So right now, the 2% drop means nothing for its future.

Sprint (S) suffered a huge loss after announcing financial issues. They dropped nearly 20% today, or $0.60 per share. They finished at $2.41 a share.

Clearwire Corporation (CLWR) suffered a bigger loss when Sprint announced that they will no longer be selling phones that work on the Clearwire network. Their stocks dropped $0.66 per share, or 32%.  And MetroPCS Communications (PCS) also suffered a loss of 7.8% or $0.67 per share finishing at $7.93.

The telecommunication industry took a pretty big hit today. But this would also be a great opportunity for investors to jump in to buy these stocks at a low price. If that happens, it should send all three stocks back up. I believe that we need Sprint to stick around to be able to compete with the two big names of AT&T (T) and Verizon (VZ).

Today was the end of the first week of the last quarter. We are finally back over the 11,000 mark with the Dow thanks to three days of rallying. Although the jobs data today wasn’t great, it was still better than expected. I hope that things do turn out better in the near future. We already have Greece in trouble, hopefully Italy and Spain won’t go the same way.

Earlier today, the government released the report on US Jobs. As some have predicted over the past few days, the data was bad. After my report yesterday, the markets went even lower because of the predicted low quality of the jobs report to be released today. And today, the down market carried over.

The Dow Jones dropped more than 250 points so far and it doesn’t look like it’s stopping. The graph on the right, provided by Yahoo! Finance shows the steep drop the Dow Jones Industrial Average took today. The combined drop of yesterday and today has nearly undone the rally we have seen during the last 4 market days of August. The sight isn’t pretty but we will bounce back! The Dow Jones is currently at 11,239, making the gap between the current price and the magic 12,000 mark even greater.

Dow Jones Huge Drop on September 2nd

by Yahoo! Finance

The NASDAQ Composite dropped more than 71 points and is currently at 2,474. The S&P 500 is at 1,173 after a drop of more than 31 points or more than 2.5% of its value. The New York Stock Exchange (NYSE) dropped almost 200 points so far and is currently standing at 7,244.

The US Jobs Report stated that in August, only created 17,000 jobs, which is almost nothing compared to what was expected. What makes this worse is that they revised the amount of jobs for June and July as well. They found that there were more than 58,000 fewer jobs than what was originally thought. So not only did we barely create jobs in the private sector July, we had the numbers for the two previous months wrong. And even worse than that, the government/public sector also cut more than 17,000 jobs in August. They pretty much cancel each other out so the economy didn’t really see any jobs created last month. This is actually very sad.

The unemployment rate stays at 9.1%. This lowers the confidence investors have in the economy. This could signal that the federal government will come out with another Stimulus to encourage consumer spending. The problem with a stimulus package is getting the money. They would have to figure out where the money would come from because they can’t just take it away from something essential and they can’t just print more money because it just lowers the value of the dollar.

We will have to see where things go from here but for today, we can expect the stock market to stay in the red. I wouldn’t be surprised if the stock market actually goes lower than it has so far. The news today was definitely surprising especially the part about the revisions of June and July jobs data. The government has to be able to do something to turn things around and I am not sure if a stimulus would be the best plan. I’m not an economist so I can’t say what would be best but so far, everything they’ve tried hasn’t worked.

Whenever there is economic distress, Gold seems to always jump in joy. Last week, the price of Gold dropped below $1,800 an ounce and stayed there for some time. But the bad trading sessions over the past few days has given Gold the chance to rally all over again. Today gold has gained more than 50 points. Currently it sits at $1,878 an ounce, well over a $100 gain from last week. If the economic distress continues and the stock market continues to plummet, we can expect gold to keep rallying. It does seem that the Gold bubble isn’t bursting, it has life left. I still believe that it will burst sooner or later because the economy is bound to bounce back. We have seen economic hardships like this several times in our history and every time, the economy recovers. We have no reason to believe that this time is any different.

We just have to keep a positive outlook. Hopefully the economy turns around soon and hopefully the job data for September is better when it’s released next month.