The markets had a lot to digest this morning in terms of economic data, starting with the U.S. Labor Department’s Non-Farm Payroll report. This report turned out to be a disappointment, with unemployment inching up to +9.8%.  There was an expectation for much better results – so the stock market took it in the chops immediately at the open – BUT gradually recovered to close mostly positive in the afternoon.

The time to purchase stocks is when you know everyone is pulling to make things better.  And that is what we have right now – led by the Federal Reserve, we have the U.S. government trying to find out how the tax cuts can be maintained, and possibly cut spending and we have the European Central Bank re-energizing its stimulus efforts.

At 10:00 am, U.S. factory order data was released which showed that orders FELL in October.  OK.  Orders fell by less than 1%, so it’s good to keep things in perspective.  It was however the first time that orders hadn’t advanced in the last 4 months.

Then came the Non-Manufacturing  ISM report on Business, which showed GROWTH in the services sector.  Here is what surveyed businesses in various industry groups are saying –

  • “Business remains steady; outlook for fourth quarter is good.” (Information)
  • “Trending favorable — see more activity toward additional staff and capital expenditures for 2011.” (Finance & Insurance)
  • “Business is stable. Customers are exerting a lot of pressure to lower prices.” (Agriculture, Forestry, Fishing & Hunting)
  • “Slight uptick in orders, but nothing to indicate sustainability.” (Professional, Scientific & Technical Services)
  • “This business cycle is cause for continued caution for the foreseeable future. We would like to see some settling of unemployment, retail and home sales — none of which appear to be either forthcoming or predictable. We anticipate continued uncertainty and retrenchment.” (Retail Trade)

The markets closing positive in the face of the disappointing employment numbers give us a taste of positive market developments that may be ahead.   North Korea could however stir things up a bit and cause the markets to shake a bit.

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