International Trading

The S&P 500 Index perform well on the back of a much better than expected payroll number caught market participants off sides as many traders did not believe the strength of economic data points earlier in the week (ISM, Jobless Claims, Pending Homes Sales), and are now forced to cover short positions.  The employment data was better than expected.  The overall headline Non-farm payroll report was a loss of 54,000 jobs.  The private sector added 62 thousand jobs, while the government sectors lost 113 thousand jobs.  The July data was revised up to 107 thousand private sector jobs from 71 thousand initially. The unemployment rate ticked up to 9.6% from 9.5%.   Manufacturing lost 27 thousand jobs and this was disappointing.  The market had expected a 10 thousand increase.  This is consistent with the moderation in the manufacturing sector seen recently.  It points to a soft industrial output report.   Construction added jobs (19 thousand) for the first time in a few months.  Average hourly earnings rose a healthy 0.3%, which is favorable for income and consumption, and was definitely a position surprise.  The U.S. economy has shed jobs for three straight months, though the losses in August were about half the 110,000 predicted by economists.  July was revised to show overal layoffs to 54,000 followed an original estimate of a 131,000 drop in payrolls.  A break above 1130 will see continued momentum enter the market.