Major Market Movers

Spare the AGONY!

Enough is ENOUGH! The race is almost over as two of the three contestants passed the finish line and what a dreadful moment it was! The data revealed today again showed uncertainty in the markets making us think once more on the validity of the information we are given. Are the resources trustworthy enough?
Opposing all expectations, the ADP figures surprisingly showed an incline of 189,000 jobs in the market compared to last month's revised reading of 119,000 from 106,000. Projections were only for a growth of 53,000 but as we see, the actual number is more than 3 times as much. The biggest contributor to this figure was topped by the service sector, and since it accounts for nearly 80% of the U.S. economy, it weighs a whole lot. Although the goods-producing sector declined 8,000; it was offset by the massive gain of 197,000 in service-providing jobs. Most of losses were in the manufacturing sector which dropped by 5,000. This marks the 12th monthly decline in a row in the goods producing sector.But still, the ADP is a fairly good indicator for the jobs report due this Friday so does this mean we will see a positive reading in the Non-farm payrolls? Well first thing's first, concerning the labor market; data released was quite contradictory since the employment sub-index coming from the ISM-manufacturing showed a decline. We now have one determinant which weighs the most in the market…Friday's Jobs report! Great revisions have been witnessed over the past couple of months in that report which only leads to one question; can we actually trust the Job's report as an indicator to the economy? Especially with it being the number one indicator for the performance of the labor market?Non-farm productivity in the third quarter soared to 6.3% but this makes sense since the GDP for the third quarter climbed to 4.9%. The productivity reading marked its best reading in four years also showing that inflationary pressures from the labor market is not as bad as once seen. This gives an edge to the Feds that if they do decide to cut interest rates, they can do so without baring the burden that inflation could spike higher despite the fact that the CPI had slightly increased but remains within containment. High productivity growth means an economy can grow quickly without inflation which will most likely raise living standards. However, what was witnessed today proved the contrary since unit labor costs fell 2% indicating lower wages reflecting the slip in spending and incomes.Factory orders also shot up to 0.5% in October from the expected flat reading of 0.0% as it was supported by defense goods and orders for primary metals and electrical equipment. Defense goods soared 16% recording a three month high as primary metals and electrical equipment rose 3.2% and 2.9% respectively.The ISM non-manufacturing index declined to 54.1 from 55.8 in October however still signaling expansion in the non manufacturing sector. Adding to the misery and confusion of the labor market and inflationary pressures, both employment sub-index and prices index showed horrible figures. The employment component decline to 50.8 in November from 51.8 in October as inflationary pressures supported the rise in prices to 76.5 this month from the previous reading of 63.5. Also new orders fell to 51.1 from 55.7 which might show slowing demand as the U.S. economy poorly performs.It is safe to say that all the readings for the third quarter indicated strong performance for the economy during that time and faded away fears of entering a recession. However, the start of the fourth quarter and what is expected still to come might take all this happiness and upbeat away and revive the fears. As mentioned before, Friday's report might lead to the Feds to actually reconsider cutting interest rates only if the labor market shows a strong reading. But again is it trustworthy? Or will there be another revision? The ship is sinking with no time left! The clock is ticking now waiting for the final contestant to cross the finish line and save the day; hopefully not making Friday another BLACK one!