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Weak Jobs Already Priced into Market?

Futures were flat as June nonfarm payrolls posted a decline of 125,000 jobs, slightly higher than expected, with an unemployment rate of 9.5 percent (less people looking for work, apparently). Average workweek declined to 34.1 hours from 34.2 hours.

Private sector job growth up 83,000 was a bit below expectations.

The stock market anticipated weaker numbers and trading all week reflected that sentiment. The market is trading at notably lower levels than two weeks ago.

The data in the past week clearly indicates economic growth is below forecast: ISM, initial claims, ADP, consumer confidence, new & existing home sales for May as well as pending home sales (contracts) have all been below consensus.

Analysts will now begin taking down GDP and earnings estimates — yesterday (Thursday), JPMorgan dropped their Q3 GDP estimate from 4 percent to 3 percent — but the stock market has already been pricing this in during the past two weeks.

What will likely happen from here: flat. Summer starts in earnest next week. The VIX, currently trading at 32, is pricing in volatility of roughly 2 percent a day in the S&P 500.

While you can argue that we are only one headline away from another drop, a 2 percent move every day is more volatility than we are likely to get: we are going into a light economic news week, with several weeks ahead of us before Q2 earnings start.

Elsewhere:

1) Downwards momentum: Dow down 6 straight days, while the S&P and Nasdaq are down 8 of last 9 days.

Australian miners BHP Billiton and Rio Tinto rise 2 percent following a positive developments on the proposed Australian mining tax. The new tax will apply to far fewer companies than originally expected (320 vs. prior target of 2,500), and will be at a lower rate than initially proposed (30 percent vs. 40 percent originally).

Only iron ore and coal companies will be subject to the new tax, while the existing offshore oil rent tax will also be levied on onshore oil companies.

2) Blockbuster announced it came to an agreement with some of its noteholders to postpone the repayment of debt. The interest payment extension will help the video rental chain avert bankruptcy for the time being.

However, after shareholders failed to approve a reverse stock split proposal, the company revealed that it will be delisted from the NYSE due to a continued share price of under $1.

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