D&D Note (4.3.2020) ~ Jobs Report is… Horrible ~
Markets started the day in positive territory but after the first 45 minutes stocks began to drop and continued to fall throughout the day after a horrible jobs report. Traders also don’t like going long into a weekend when clouded with uncertainty. Lows of the day were around 2% but we did see a bit of a lift in the final 10 minutes of trading.
DOW fell 1.67%
S&P 500 fell 1.52%
NASDAQ fell 1.53%
Payrolls fell 701,000 from previous month but this data is already outdated. Forecasts were only for a loss of 100,000. Jobless rate jumped to 4.4% but economists are forecasting 15% soon. The St. Louis FED President James Bullard said it might even hit up to 30% during this quarter.
Oil rallies over 13% after falling overnight in futures trading. WTI has rallied 33% this week for best week ever. Russia and Saudi Arabia are said to be having a teleconference on Monday to discuss Oil production cuts.
Gold rallied on the day 0.69% on the back of the terrible Jobs Report.
The VIX dips below 50 falling almost 8%. While this is a good sign it is still not an all clear sign. Since the gauge was so elevated it has to come back down to more “normalized levels.” We can easily see the market the next couple weeks continue to fall while the VIX also falls. But we do look to have hit peak levels of the Fear Gauge.
Apple announces it will keep all the USA stores closed till May. Morgan Stanley cuts price target to $298 but maintains is overweight positioning call.
The FED today announced is will slow its pace of treasury buying to $50 Billion per day.
Early estimates are showing $4.1 Trillion will be the damage done to the global economy due to the Coronavirus.
~ Dave James / Principal Trader and Market Strategist