Jobs Numbers Under Estimates But Strong Enough to Maintain Risk-on Sentiment

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Estimates for new jobs added in the month of October came in around 315,000, far above the numbers that were actually revealed this morning. The Labor Department’s jobs report showed that employers added 261,000 new jobs last month, the most workers added in a year. The fact that October’s numbers came in well below estimates had little negative effect on U.S. equities as the actual numbers clearly demonstrated strong economic growth.

It was also reported that the jobless rate fell to the lowest level since 2000. As such, the CME’s FedWatch tool predicts that there is a 96.7% probability that the Federal Reserve will raise interest rates in the month of December to 1 ¼ - 1 ½%.

With little information gleaned from Wednesday’s statement following the conclusion of this month’s FOMC meeting and the appointment of Jerome Powell as the new Fed Chairman, market sentiment continues to see one last rate hike implemented this year.

This economic data along with proposed tax cut continued to support a risk-on environment, and optimism, taking US equities to new uncharted territory as both the Standard & Poor’s 500, the Dow Jones and NASDAQ composite closed, or traded to new record highs. This data also was supportive of the US dollar and a negative influence on the precious metals complex.

According to Bloomberg Markets, “U.S. stocks headed for the longest string of weekly gains since 2013 as Apple Inc. results and strong services sector data added to optimism in the economy. The dollar rose, while Treasuries fluctuated as the latest jobs report did little to alter views on the timing for higher interest rates.”

Today’s report, along with other economic events this week, continues to weigh heavily on both gold and silver pricing. As of 330 EDT, gold futures are currently trading at $1270.10, with a net loss of eight dollars (-0.63%) on the day. Silver closed under dramatic pressure losing $0.30 to close at $16.83 today, which is a net drawdown of over 1.8%.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer