– BOOM, 204,000 jobs created in the United States in October, according to Friday night’s much bigger than expected non-farm payrolls which the punditry had guesstimated would come in at 125,000. Stocks soared and rates rose aggressively as the strong economic data flow continued.
– The Dow was 168 points higher at 15,762 for a gain of 1.08%, the Nasdaq rose 1.6% and the S&P 500 reversed the fall of the previous day, rising 24 points or 1.37% to 1771. The technicians suggest that the S&P 500 is still stalling at the top of a multiyear uptrend and Henry Blodget from BI US wrote a great piece on valuation over the weekend which is a must-read.
– In a cake-and-eat-it trade, bonds rose sharply along with stocks, which is somewhat incongruous if bonds are worried about higher rates (and maybe even Dectaper), but stocks are not. Anyway, at the end of play, US 10’s were up 15 points to 2.75%, Gilts rose 10 points to 2.61% and Bunds were 7 points higher at 1.76%.
– On the Sydney Futures Exchange, as a result of bond market sell-offs, overseas 3-year bonds were 9 points lower, 10’s fell 13.5 points while the 90-day bills were up 5 points-plus from the June 2014 contract and out. SPI 200 contracts ended the week up 55 points at the close on Saturday.
– European stocks missed most of the US stock rally and will likely rally tonight, but the US rally had reversed serious early losses in European markets and at the close, the FTSE was 0.16% higher, DAX was largely unchanged down 0.03% and the CAC slid 0.49%. Stocks in Madrid and Milan fell 0.52% and 0.07% respectively.
– On Forex markets, the US dollar got a solid lift on the back of the stronger-than-expected non-farm payrolls, with the USD Index ending the week with confirmation that the break last week of the down trend from July was not a fluke, at least technically. At the close, euro sat at 1.3370, Glenn Stevens got his wish and the Aussie fell to 0.9383, GBP was relatively strong – all things considered – at 1.6015 and USDJPY broke higher to 99.06 by the close. That’s a big technical break, so watch for the Nikkei to see if it can do likewise in Asian trade today.
– On commodity markets, Bitcoin continues on its tear, making a new high at 395 over the weekend as the bubbleish trade continues – it is around 350 at the moment. This is an amazing juxtaposition with Gold’s big selloff back to $1283 over the weekend, down 1.83%. Nymex Crude was 0.42% higher, Copper remained at $3.26 lb, while over in the Ag pits, Corn was 1.49% higher, Wheat fell 0.50% and Soybeans fairly roared, up 2.13%
Besides the non-farms, China released some important data over the weekend as well, with CPI inflation only rising 3.2% year on year, slightly below the 3.3% expected. Industrial production was 10.3% from 10% expected and retail sales undershot by a smidge at 13.3%. Reasonable data and it shouldn’t detract from any US-induced rally in Asia today.
In the next 24 hours however, it should be fairly quiet given it is Veterans Day in the US and Armistice Day in France. Don’t forget to buy a poppy.
We’re still pressing on here on Remembrance Day, with home loan data out and a speech from German Bundesbank President Weidmann tonight.