Stock futures took a hit Friday due to disappointing news on the nation’s unemployment front.
According to the Department of Labor, employers added 431,000 jobs in May. However, the large majority of those jobs were temporary U.S. census positions. Otherwise, the net job gain from the private sector was only 41,000.
On Friday afternoon, the Dow Jones Industrial Average was down more than 200 points, due in good part to the news. Still, the outlook wasn’t completely bad.
The Department of Labor also reported that the unemployment rate has fallen to 9.7 percent, down from 9.9 percent the previous month. Also, manufacturing, temporary help services and mining industries all experienced job creation.
A report by CNBC quoted Todd Schoenberger of LandColt Trading as calling the latest jobs report “extremely disappointing,” while also citing several previous weeks of rising first-time unemployment claims. CNBC also noted that economists had been expecting a figure closer to 500,000 jobs created last month.
Despite overall optimism about the direction of the economy, many companies are depending on increased consumer spending to rebuild their profitability in the aftermath of the recession. However, that will be far more difficult to accomplish if unemployment remains as high as it has been.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.