Barack Obama Statistically Helped

Published by Filipe R. Costa on Mon, 08/10/2012 - 10:16
Obama happy

Daily Market Commentary for October 8: Non-farm payrolls report issued last Friday was positively interpreted by investors but came with some caveats. Markets edged higher but couldn't keep the gains as investors preferred to avoid being exposed to risk during the weekend.

NFP showed 114,000 jobs created in September in line with expectations but a huge revision was made in the prior number. Payrolls created in August were revised up from 96,000 to 142,000. When the number was announced last month it was a major deception but now investors had the opportunity to re-evaluate the prospects. The report showed a better than expected number for government jobs. At a time this item was expected to contribute negatively, government created 10,000 new jobs adding to the 114,000 total number. Somewhat worrying is the fact that manufacturing shrank by 16,000 jobs.

The NFP number was in line with expectations but still not compatible with what is considered a number able to induce a drop in the unemployment rate. Interestingly the unemployment rate unexpectedly dropped from 8.1% to 7.8% but it is more a statistical spike than a real improvement in the job market. No matter what it is, it will conveniently help Barack Obama that see in this unemployment rate the best number since he came to office. Unfortunately it does not reflect a US economy in better shape.

US markets couldn’t keep earlier gains and ended in the red. This morning there is further weakness with the FTSE trading at 5,830. Since early August the British blue chip index is lying around, going nowhere, and 5,850 seems to be every bus stop.

Name Last price Close Price % 5-Day % YTD %
DAX (Xetra) 05/10/2012 7397.87 1.27 2.52 25.42
Nasdaq 100 Index 05/10/2012 2811.94 -0.59 0.46 23.45
S&P 500 05/10/2012 1460.93 -0.03 1.41 16.17
Gold (LBM) $ 05/10/2012 178020 -0.54 0.37 13.61
Euronext 100 05/10/2012 661.37 1.47 2.96 11.56
Dow Jones Industrial Average 05/10/2012 13610.2 0.26 1.29 11.4
CAC 40 05/10/2012 3457.04 1.64 3.05 9.41
FTSE 100 05/10/2012 5871.02 0.74 2.25 5.36
Nikkei 225 05/10/2012 8863.25 0.44 -0.08 4.83
GBP/USD - US $ per £ 05/10/2012 1.6135 -0.3 -0.19 3.9
Crude oil (Brent) Composite 05/10/2012 11080 -0.68 -0.53 3.16
AUD/JPY - JPY per Australian $ 05/10/2012 80.087 -0.38 -0.96 2.04
EUR/USD - US$ per Euro 05/10/2012 1.3037 0.18 1.38 0.64
AUD/USD - US$ per Australian $ 05/10/2012 1.0182 -0.57 -1.9 -0.24
EUR/CHF - Swiss Fr per Euro 05/10/2012 1.2117 0.02 0.27 -0.28
USD/CHF - Swiss Fr per US$ 05/10/2012 0.9295 -0.16 -1.1 -0.86
EUR/GBP - £ per Euro 05/10/2012 0.8079 0.47 1.55 -3.04
Crude oil (Light Sweet) Composite 05/10/2012 8990 -1.69 -2.31 -9.19