More signs that the U.S. economy is not as bad as everyone thought. But, big downgrades in Europe bring us back to reality.
First, the scoreboard:
S&P 500: -10
And now, the top stories:
- The highly-anticipated September jobs data came out with a bang. U.S. companies added 103k non-farm payrolls. Economists expected just 60k. The July and August figures were both revised upwards.
- However, the unemployment rate was unchanged at 9.1%, which wasn’t a surprise. Also, the jobs recovery remains painfully slow.
- Fitch downgraded Italy and Spain in the middle of the trading day. Italy was cut from AA- to A+ with a negative outlook. Spain was cut by two notches to AA- and its outlook is also negative.
- The Euro dived against the dollar after the two downgrades.
- U.S. banks also sold off, as uncertainty remains regarding Eurozone exposure. Everyone’s new favourite punching bag, Morgan Stanley got, banged up, even as their biggest competitor Goldman Sachs made a bullish call on the stock. Morgan Stanley fell 6%. Goldman Sachs lost 5%. Bank of America and JP Morgan declined 6% and 5%, respectively.
- Sprint shares dived after a rough investor day.
- Late in the day, the Federal Reserve said consumer credit unexpectedly shrank by $9.5 billion in August, the first contraction in 11 months. Economists expected growth of $8 billion. However, markets rallied after the news came out.
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