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02Oct2015 Market Update: Markets Recover From Serious Opening Decline, Oil Prices Climb Back Up To Previous Levels, DOW Up 65 Points, May Be Short-lived Rally

Written by Gary

U.S. markets climbed up from a serious one percent plus decent into the red at the opening bell after the disappointing print in the US jobs market prompts markets to give up hope of a Fed rate rise this year.

Short-term indicators are neutral with a negative slant as many analysts reflect on growing worries regarding global growth and a possible hard landing in China.

Here is the current market situation from CNN Money

North and South American markets are mixed today. The Bovespa is up 2.22% while the S&P 500 gains 0.50%. The IPC is off 0.23%.

Traders Corner - Health of the Market

Index Description Current Value Members Sentiment: % Bullish (the balance is Bearish) 59%
CNN's Fear & Greed Index Above 50 = greed, below 50 = fear 17%
Investors Intelligence sets the breath Above 50 bullish 25.2% Overbought / Oversold Index ($NYMO) anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. -7.14 NYSE % of stocks above 200 DMA Index ($NYA200R) $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. 19.77% NYSE Bullish Percent Index ($BPNYA) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. 30.61% S&P 500 Bullish Percent Index ($BPSPX) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 30.60% 10 Year Treasury Note Yield Index ($TNX) ten year note index value 19.65 Consumer Discretionary ETF (XLY) As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy 74.93 NYSE Composite (Liquidity) Index ($NYA) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors 9,837

What Is Moving the Markets

Here are the headlines moving the markets.

European shares back in the red as US jobs data disappoints

US stocks slipped by 1.4pc and the dollar dropped by 1.4pc against the euro after the disappointing data were released. The yields on 10-year Treasury bonds - which imply the cost of government borrowing - slid below 2pc to their lowest levels since April.

Economists at BNP Paribas said that there was a "decent" chance that the Fed would raise rates even later than March "given weather risks that could distort data over the winter".

Paul Ashworth, chief US economist at Capital Economics, said that "aside from manufacturing, which is getting hammered by the stronger dollar, everything else [in the US economy] looked pretty positive" before the jobs report was released.

Excluding manufacturing, "the slowdown in employment gains is most notable in business services and education and health, which are not the sectors most prone to cyclical swings".

"Accordingly, we would not be surprised if the economy had a stronger fourth quarter," Mr Ashworth said. But as this rebound will not show up in official data for a few months, the Fed is not likely to raise its rates before 2016.

There was one bright spot in the jobs report. While the headline unemployment rate stood still at 5.1pc, the broader underemployment measure fell from 10.3pc to 10pc.

Despite the recent improvement in the domestic economy, the Fed decided to leave its rates on hold at their historic lows of 0pc to 0.25pc in September. The central bank said that "uncertainties abroad" had made it more risky to tighten policy. US rates have now remained unchanged for almost seven years.

Weak jobs report sends US stocks lower; dollar sinks as investors expect no rate hike

NEW YORK (AP) — A weak report on the U.S. jobs market knocked the stock market lower early Friday. U.S. employers cut back sharply on hiring in September and added fewer jobs in July and August than previously thought. The news shot government bond prices up and drove the dollar down against other major currencies. Banks fell more than the rest of the market as investors expected low interest rates to continue to pinch their profits. KEEPING SCORE: The Standard & Poor's 500 index was down 12 points, or 0.6 percent, to 1,911, as of 11:16 a.m. Eastern time. The Dow Jones industrial average dropped 102 points, or 0.6 percent, to 16,168, while the Nasdaq composite declined 19 points, or 0.4 percent, to 4,607. WAY OFF: The government reported that employers added 142,000 workers last month,

Weak jobs report sends JPMorgan Chase, Citigroup and other bank stocks lower

NEW YORK (AP) — Banks were pummeled Friday after weak economic data raised doubts about the timing of a possible interest rate hike by the Federal reserve. The latest employment data shows that employers pulled back sharply on hiring in September. The 142,000 new jobs were far below the 200,000 that economists had projected, according to a poll by FactSet. The Fed, to the surprise of many, held off on raising interest rates at its meeting last month and banks took a hit then, too. The Fed has kept the federal funds rate near zero since the financial crisis struck seven years ago, which has constrained bank profits because it limits how much they can charge for loans and other products. Fed Chair Janet Yellen has said that the job market has almost recovered. But she has also said she wa

U.S. stocks pare drop after jobs report, but eye weekly losses

U.S. stocks rebounded, edging higher on Friday as investors wrestled with implications of a weaker-than-expected jobs report.

The disappointing report, seen as the closest proxy to the health of the economy, comes at a time when financial markets have been reeling on heightened worries about global economic growth, led by China.

The U.S. economy added 142,000 jobs last month, far less than the expected 200,000, while gains in the previous two months were cut, suggesting the pace of hiring slowed over the past few months. The unemployment rate remained at 5.1% and wage growth was flat.

Slack in employment has led the market to now pricing in only a 30% probability of a rate hike in December, according to Fed-funds futures. Meanwhile, economists said the Federal Reserve is now unlikely to raise interest rates year. Before the report, there had been speculation that a move could come later this month or in December.

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