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7/2/09 - Market Moving News. Unemployment in U.S. reported 9.5%, stocks down 2%
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The U.S. Bureau of Labor Statistics (BLS) announced Thursday, July 2, 2009 that the Unemployment Rate in the United States increased in the month of June to 9.5% of Americans up from 9.4% in May.
The unemployment report disappointed analysts and economists as non-farm payrolls declined by 467,000 when forecasts called for a decline of 365,000 jobs.
Stock Market futures immediately dropped in reaction to the news, and markets continued lower after the open.
Analysts were hoping that the slowing of job losses is a sign that the economy is turning upward and that a recovery will start later in the year. But today’s gloomier than expected report has caused market participants to question how soon the recovery will come and how strong it will be.
Bill Gross, Pimco’s co-founder and a member of Fixed Income Analysts Hall of Fame, suggests in his Investment Outlook for July 2009, that we may have a weak economy for a generation. Stagnation and possible inflation based on the back up in interest rates due to the government printing dollars to pay for its mounting debt, not inflation based on an improving economy.
Art Cashin, UBS’ Director of Floor Operations on the New York Stock Exchange, echoed those sentiments in his daily commentary on CNBC. Cashin, when asked about the possibility of a 2 nd fiscal stimulus package suggested that the first $787 Billion package “hasn’t been very stimulative”.
At the printing of this note, The Dow Jones Industrial Average (DJIA) is down over -153 points to 8350.57, a decline of 1.785%. The broader Standard and Poor’s 500 Index (S&P 500) is down -18.82 or -2.04% at 904.77. The Nasdaq, often used as a proxy for technology stocks, is down -46.90 points or -2.54% at 1798.82.
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