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Wall Street Shrugs Off Poor US Jobs Report

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Nonfarm payroll employment data

On Friday, October 2, 2015, The U.S. Bureau of Labor Statistics released its report on the employment situation in the United States. The report presented the nonfarm payroll employment data for the month of September 2015. According to the report, there was an increase of 142,000 nonfarm payroll jobs in September. The unemployment rate remained consistent at 5.1%.

However, the number of jobs created missed expectations of 203,000. According to the Labor Department, the participation rate fell to 62.4% for September 2015. This implies that many US citizens stopped looking for jobs and were no longer counted as unemployed.

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The data on employment, a key economic indicator, pointed toward a delay in the Fed’s decision to raise rates in the near future. This anticipation led traders to turn to the US stock markets, where the SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P 500 Bull 2X ETF (SPUU) climbed by 1.49% and 2.53%, respectively, on October 2, 2015.

The above graph shows the performance changes in various aspects of the market that took place on Friday, October 2, 2015.

Wall Street turned bullish in many aspects

Friday, October 2, saw the US market turn bullish over stocks and bonds. The day also witnessed a rise in the prices of commodities such as oil and precious metals such as gold. The volatility index, Volatility S&P 500 (^VIX) fell by 7.14% on the day. Despite the fall in the volatility index, there was an increase in gold prices.

Gold, represented by SPDR Gold Shares (GLD), gained 2.12%, since a rate hike seems unlikely in near future. The VanEck Vectors Gold Miners ETF (GDX) went up by 8.05%. Oil, represented by United States Oil (USO), gained 1.3% on October 2. Bonds, represented by the iShares 1-3 Year Treasury Bond (SHY) and the Vanguard Total Bond Market ETF (BND), yielded 0.14% and 0.38%, respectively, on October 2.

The Vanguard Total Bond Market ETF follows performances of investments in a broad, market-weighted bond index. The jobs report released on Friday missed employment expectations and is anticipated to delay the rate hike in the United States. On this ground the US dollar, represented by the PowerShares DB US Dollar Bullish ETF (UUP), weakened by 0.24% on the day.

The mining companies that rose on October 2 were Newmont Mining (NEM) in gold mining, Freeport-McMoRan (FCX) in diversified metals mining, especially copper, and Alcoa (AA) in aluminum mining.

Let’s take a look at the gains of mining companies as well as the performances of other sectors.

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