Category: News

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.

The Increase in the Stock Market

By jscreationzs

After the Market Tumbled After 3 Days of Rallying yesterday, we saw a great positive sign today. As we had all hoped, Federal Reserve Chairman Ben Bernanke made a positive announcement today saying that he predicts US Growth in the coming future. He said that the US Economy is on the right track for a long term economic growth and I hope he is right. It’s about time the US economy bounces back from the recession we have been seeing lately. Just this past month alone made the markets almost unbearable.

Bernanke hasn’t mentioned anything about any plans the Fed may take to boost further the US Economy. It may be because he believes that the economy does not need any more catalysts in the mix. If the economy grows in the future on it’s own, then that’s the best thing any investor can hope for. Bernanke admitted that the recovery has been slower than expected but he also said that it is happening and any growth is better than no growth at all.

As a result of the announcement, the stock market has been rallying so far. Currently the Dow Jones Industrial Average is up more than a 140 points and the NASDAQ Composite up more than 56 points already. The S&P 500 is up more than 17 points and the New York Stock Exchange (NYSE) up more than 92 points so far.

I think this announcement will keep the markets on a positive side for the rest of the day. The announcement has put hope back into the minds of investors after the sell offs that occurred yesterday after some worries of the announcement. I believe that the momentum will carry over to the markets next week and we will get ever so much closer to the 12,000 mark in the Dow Jones, a mark we haven’t seen all month.

Even though the stock market has been rallying today, the Price of gold has increased as well. Yesterday I reported that the price of gold was at $1,769 an ounce. So far today it has seen some gains. Currently gold is at $1,781, about $12 more than what it was yesterday. It seems as if the price of gold has almost stabilized around this point. It hasn’t been as Volatile  as it has been over the weeks prior to the market’s rallies of this week. If the markets keep rallying next week, I believe that gold will go down. It may not go down to the level it was at the beginning of this year that quickly, but it will go down. We expected gold to get past the $2,000 an ounce mark but the markets have kept it at bay. The $2,000 mark isn’t very impossible. All we”ll need is another incident in the global economy and I’m sure we’ll see gold sky rocket again.

But for now, the markets are doing very well, and gold price is steady. Certain stocks have been doing great as well. Apple Inc. (AAPL) has been going down for the past few days, but today, Apple stocks have risen more than 2%, or just over $8. It is a result of the Bernanke announcement as well as investors getting used to the fact that Steve Jobs is gone and Tim Cook is in charge.

There are still more than 3 hours left until the markets close for the day (unless you’re gold), so anything can happen. I believe we will stay in the “rally” zone and hopefully by the end of the day, we will see bigger gains.